Tag Archives: arena

Milwaukee Bucks ink 30-year lease for arena

The Milwaukee Bucks have signed a 30-year lease with the public entity that will own the team’s new arena.

The Bucks will pay at least $1 million annually to rent the arena from the Wisconsin Center District. Those lease payments will total $45 million over the term of the lease. The district board approved the terms of the lease agreement Wednesday.

Construction can now begin on the $524 million arena that will be located just north of the Bucks’ current home, the BMO Harris Bradley Center. Groundbreaking is set for June 18, with the arena expected to ready for the start of the 2018-19 season.

The arena will also host Marquette University basketball games, concerts and other events.

A new ownership group bought the Bucks from former U.S. Sen. Herb Kohl two years ago. The NBA had said that the team would need to build a new arena or run the risk of having the franchise moved.

“Personally I know we’re very proud to fulfill the commitments that we made to Sen. Kohl when we bought the team, to keep it in Milwaukee, to the people that are here,” co-owner Wesley Edens said before the Bucks’ season finale on Wednesday night against Indiana. “It’s an amazing day.”

The team will be responsible for operating, maintenance and capital repair expenses. The agreement called for the Bucks to deposit $60 million into a capital improvements fund for the arena during the term of the lease.

A public financing package approved last year covered $250 million toward arena construction, while current and former Bucks owners have already committed $250 million. The Bucks have agreed to pay for any cost overruns during construction.

The agreement also includes a non-relocation clause. Asked about a roughly $550 million penalty that the Bucks would pay if the team did move during the lease, Edens said, “I think it’s fair to say we’re not going anywhere … They built it with a financial penalty that is so punitive it would be not something you would consider, so it’s a firm commitment.”

Year in Review: The Bucks buck political gridlock

Democrats and Republicans in Madison seldom agree on anything, but one proposal in 2015 drew cheers and jeers from both sides of the aisle: a massive new arena for the Milwaukee Bucks and an adjacent “entertainment complex” filled with bars and a public courtyard where drinkers can congregate. The three billionaire Bucks owners from outside the state who drew up the proposal had more than an admirable charm offensive, which was filled with promises of unimaginable riches for one of the nation’s poorest cities. They had the assistance of the NBA, which threatened to move the team to another city unless the project won approval.

They also spent a ton of money lobbying — more in the Wisconsin Legislature than any other organization during the first half of the year, when the NBA team was pushing for the project’s approval. The state elections board, which oversees lobbying, reported the Bucks spent just over $482,000 on lobbying through June. 

The lobbying effort was richly rewarded. The Legislature, on bipartisan votes, ultimately approved spending $250 million in taxpayer money on the scheme. Gov. Scott Walker, who cut higher-education funding by the same amount, signed the measure into law.

The amount spent by the Bucks on lobbying doesn’t include efforts in July, which is when the bill passed both the Senate and Assembly. Those figures will be reported in January.

And it doesn’t include the cost of lobbying Milwaukee city and county officials, who also put their taxpayers on the hook  for millions of dollars.

Similar downtown arena complexes have proven to be boondoggles in other cities. In editorials, Wisconsin Gazette disapproved of the scope of the project as well as the terms. WiG hopes to be proven wrong. The complex is scheduled for completion by the start of the 2018–19 season.

Supper club-themed concession stand opens at Kohl Center

Cheese curds, fish fry and open-faced prime rib sandwiches are now available at a stand at the Kohl Center modeled after a vintage Wisconsin supper club.

The unique concession stand includes a reclaimed red oak counter top with a red vinyl upholstered front, a cedar shake shingle roof and mood lighting.

There’s also a mounted fish and deer rack for decorations, along with a neon “Travel Wisconsin Supper Club” sign.

State Tourism Secretary Stephanie Klett said “Where else on the planet will you find a supper club inside a sports arena?”

On the Web…

Travel Wisconsin news on the Kohl Center supper club.

Reject taxpayer subsidies for Bucks ‘entertainment’ mall

The law that provides state funding for the Milwaukee Bucks arena also gives the team owners the right to build arena “public plazas,” which would be used to generate revenue exclusively for the team.

The city proposes spending $20 million to create these misnomered “public spaces” to enrich the Bucks, not to serve public interests. They would help expand a Bucks-controlled entertainment monopoly, as mandated by the NBA.

According to State Bill 209, Section 229.46, “The professional basketball team or its affiliate shall be entitled to receive all revenues related to the operation or use of the sports and entertainment arena facilities, including, but not limited to, ticket revenues, licensing or user fees, sponsorship revenues, revenues generated from events that are held on the plaza that is part of the sports and entertainment arena facilities, revenues from the sale of food, beverages, merchandise, and parking, and revenues from naming rights.”

Among the alarming implications of this clause is that no festival or market could be held on these plazas by any vendors except the Bucks or their affiliates. “Free” concerts and other events would be hosted solely to increase revenue streams for the Bucks.

The now-public spaces to be co-opted are Fourth Street between Highland and Juneau and the city-owned Fourth Street garage. The city would hand over the well-kept garage to the Bucks, pay to raze it and forgo nearly $1 million a year in parking revenue. Then the city would pay $35 million to build a new garage and split the income with the Bucks. (At first, the Bucks demanded all income.)

This proposal really creates a third tier in our beleaguered park system. In addition to different calibers of parks for haves and have-nots, we are starting to have privately controlled public spaces. Who in fact owns and controls these pseudo-public parks? 

The state, county and city are already giving 30 now-public acres to the hedge-fund moguls who own the Bucks. Thus far, no government entity has mandated the creation of anything to benefit taxpayers in return — nor has public input been sought. 

“BucksTown Plaza” will have nothing in common with Chicago’s Millennium Park, where people are free to carry in food and drinks and enjoy a wide range of free programming for all ages, 365 days a year. Brave New World Fourth Street will serve other gods.

The Common Council can hold the line on how many more public assets taxpayers will hand over to the Bucks. Instead of these extravagant giveaways, alderpersons can reject this proposal and push to start over and renegotiate a better deal. They can support only the arena and not the pseudo-public spaces, which will house strip-mall chain restaurants. That will only help to destroy downtown Milwaukee’s unique charm and compete unfairly with nearby local businesses.

Call to action

You can help prevent this from happening by lobbying officials before the final vote is taken, possibly as soon as Sept. 22.

Contact your alderpersons at 414-286-2221. You also can call Mayor Tom Barrett’s office at 414-286-2200 or email

In addition, you can attend the public hearings in Room 301-B of City Hall, 200 E. Wells St. Citizens will be allowed to speak briefly. The schedule is:

4 p.m. Aug. 31: The comptroller’s report on subsidy costs and other information will be presented.

9 a.m. Sept. 15: The Zoning, Neighborhoods and Development Committee will consider the proposal.

9 a.m. Sept 16: The Finance and Personnel Committee meets.

What to tell city officials:

1. Do not tear down the city-owned Fourth Street garage and forego nearly $1 million a year in revenue by giving the site to Bucks’ owners for their privately owned “entertainment” mall. If we don’t tear down the garage, we won’t need to build a replacement two blocks away at a cost of $35 million.

2. Do not accept the 50-50 split in revenue from the proposed new garage after paying 100 percent of its building costs.

3. Do not give the Bucks public assistance to over-saturate the local tavern market. The Bucks mall would siphon business from about 60 restaurants and bars near the arena, especially on Old World Third and Water streets.

4. Do not hand over for free the 1-acre Sydney Hih lot, appraised for $1 million, to Bucks owners to do with as they please. Instead, sell it for full market price to a developer with an immediate, viable plan.

5. Reject this mall plan and so-called public plazas designed to exclusively generate revenue for Bucks owners. Designate that city subsidies support only arena construction.

— Virginia Small

News analysis | Scott Walker won’t raise gas taxes, insists on borrowing $1.3 billion for bogus highway projects

Gov. Scott Walker, for the second time in less than a week, said Monday that he won’t agree to raise the gas tax or vehicle registration fees to break a legislative impasse over how to pay for highway projects.

“I’m going to keep my campaign promises,” said Walker, who didn’t specifically promise not to raise the gas tax or vehicle registration fees, but did say he wouldn’t let the overall tax burden go up in his second term.

Most of the highway projects proposed by the Wisconsin Department of Transportation are actually pork for road builders, who are generous campaign donors. A federal judge recently recently ruled that WisDOT used vastly inflated projections to justify a major widening project on Highway 23, where traffic is way below WisDOT’s figures.

Fleecing taxpayers to keep road builders happy is an ongoing pattern in Wisconsin, said Steve Hiniker, executive director of 1000 Friends of Wisconsin. He said money for bogus construction projects are the primary reason that local roads in the state are in such disrepair.

When Walker was re-elected to a second term in November, he promised swift action on the budget given a larger Republican majority in the Legislature.

But the process is taking just as long this year as it did in 2013. That year the budget committee finished its work on June 5 and Walker signed it on June 30.

Figuring out how to finance all the unnecessary highway projects is one of the last pieces of the state budget puzzle to fall into place this year. The Legislature’s budget-writing Joint Finance Committee had hoped to finish its work on Friday, but couldn’t get it done. It has yet to set its next meeting date, which was expected to be its last.

Once the budget clears the committee, it heads to the Senate and Assembly — both controlled by Republicans — for votes later this month. Walker has said he won’t announce a presidential run until after he signs the budget into law.

Republicans lawmakers are balking at Walker’s proposal to borrow $1.3 billion for roads by issuing bonds, but they haven’t been able to come up with an alternative the governor will back.

“We need to come to an agreement with the governor,” Rep. John Nygren, co-chairman of the budget committee said Friday. “He’s pretty much taken all of our options off the table and we don’t see the bonding out there as a great option.”

Walker didn’t budge Monday.

“I made it clear that while I support a vibrant transportation system, I don’t support raising revenues be it a gas tax or a vehicle registration fee without an offsetting reduction in taxes somewhere else in the budget,” Walker said. “And so far that hasn’t been in any of the proposals.”

Another sticking point in the budget is a financing deal for a new $500 million-plus arena for the Milwaukee Bucks. The Milwaukee Journal Sentinel, citing unidentified sources, reported last week that the deal would include $250 million from taxpayers and $250 million from current and past owners of the Bucks.

Progressives view the arena deal as yet another fleecing of taxpayers, who will shoulder for far more of the costs than its supporters have revealed. Nearly every day, buried costs to taxpayers are uncovered by reporters examining the deals’ details.

Walker said he hopes to have a deal on the arena by the end of the week.

Money ball | Public financing for the Bucks arena entails hidden costs

Polling shows that voters strongly oppose public funding for a new Milwaukee Bucks arena complex. Yet elected officials forge ahead with the project, which could put taxpayers on the hook in myriad ways that lie buried beneath piles of hype and denial.

New Bucks owners Marc Lasry, Wesley Edens and Jamie Dinan have pledged $150 million to the project and former owner Herb Kohl has pledged $100 million. The new owners now are pressuring elected officials to contribute at least $250 million from taxpayers to complete the complex, which will cost at least $500 million, according to estimates.

But throw in financing costs, tax incentives, property-tax exemptions and other freebies, and the public could be on the hook for up to $1 billion in subsidies.

While the owners promise Milwaukee residents pie-in-the-sky rewards in the form of  increased economic activity and more jobs, the payoff equation is lopsided. The new venue would handsomely reward the Bucks, a for-profit business, with free rent and a large percentage of every dollar collected from all enterprises located within the expansive proposed complex (in 2014, the Bucks received 41.6  percent). But the taxpayers, who would bear the lion’s share of expenses, would receive no ownership stake in the team — a detail that belies the project’s billing as “public-private partnership.” This “partnership” entails  taxpayers investing in a rapidly depreciating asset (a building) that supports a greatly appreciating asset (a major-league franchise). 

City, county costs

The Bucks want the city and county to kick in from $50 million to $100 million in direct cash, free land and buildings and other subsidies. The county has indicated it would donate vacant Park East land. The proposed arena site, which is due north of the Bucks’ current home, is on vacant BMO Harris Bradley Center land, which already is owned by the public. (The Bradley Center owns almost all the land between North Fourth and Sixth Streets and State Street to Juneau Avenue.)

Mayor Tom Barrett recently proposed giving the Bucks additional land — the former Sydney Hih site — at Third Street and Juneau Avenue, valued at $1.1 million. He’s also proposed providing infrastructure support worth $17.5 million through a tax-incremental financing district and a block-long, multi-use parking complex.

That 980-space parking structure generated $920,000 in parking revenue last year for the city. It’s in a prime location — directly across from the new arena site and next to the tony Moderne residential high-rise and a dining/nightclub district. It includes two large storefronts. The city built the structure in 1988, reportedly for $25 million, and officials say it’s meticulously maintained and debt-free.

But a proposed Bucks plan shows the parking complex demolished and redeveloped. Replacement parking facilities would be built elsewhere, adding to arena costs.

The city would forgo the nearly $1 million in annual income that it currently receives from the existing facility.

The parking garage offers an excellent case in point of how ever-increasing taxpayer subsidies have crept into the project. The Bucks proposal encompasses 27 acres, nearly twice the Bradley Center’s current footprint. But the city-owned parking complex is not needed for an expanded arena footprint, when there’s vast undeveloped acreage both west and north of the proposed arena site, much of it already publicly owned by the Bradley Center. The value of that public land is not even mentioned as part of taxpayers’ contributions.

Gov. Scott Walker wants the new arena to follow the model of the Bradley Center — a state-owned facility managed by a  tax-exempt authority. That would cost an estimated $450 million over 30 years in  lost property taxes, according to a report by Bruce Murphy in Urban Milwaukee. The public also may well end up covering ongoing management costs and maintenance shortfalls. The city currently pays the Bradley Center $175,000 annually for its upkeep and state taxpayers have paid $10 million for arena repairs since 2009.

Lease terms give the Bucks a share of every concession, along with catering, suite leases and merchandise sales for all arena events, not just Bucks games. In fiscal 2014, the Bradley Center paid the Bucks $4.7 million on gross revenues of $11.3million. The Bucks also receive any Bradley Center surpluses, while the public authority struggles to cover deficits (and has not kept up).

As a mechanism for funneling state money into the project, Walker has proposed issuing $220 million in state bonds. Legislators believe the governor’s plan ultimately will cost $380 million after tacking on interest. They propose limiting bonding to $150 million.

‘Stars in their eyes’

Even when subsidies are disguised and direct taxes avoided, economists say that public financing is nearly always a losing proposition. Nonetheless, for myriad reasons, municipalities continue the handouts. 

Hope and hype that an arena will spur more nearby development were expressed when the Bradley Center was built in 1988. Mostly, that did not happen, although downtown development has been booming since the recession ended. 

Now Lasry and Edens, who are big-time real estate developers, say they will invest in private development, including a nearby team practice facility. A 2013 City of Milwaukee report noted that sports economist Andrew Zimbalist warns “professional sports have been historically unreliable when it comes to making such local investments.”

Although cities often provide tax incentives to businesses to encourage redevelopment, subsidies often take many years to be recouped. In contrast, huge sports-venue footprints exempted from property taxes deplete a budget permanently. And, it’s not uncommon for taxpayers to pay much more for a sports venue than is initially negotiated (as, famously, with Miller Park). Some cities are still paying for sports palaces when they’re being pressured to replace them.

Journalist Neil deMause, co-author of Field of Schemes, a book and website about sports-venue funding, reports that one reason governments keep giving sports teams sweetheart deals is that public officials are completely outmaneuvered when negotiating with pro-sports reps. Basically, teams ask for the moon, knowing they can always backtrack.

However, public officials often simply acquiesce, surprising even hard-bargaining owners. Jim Nagourney, a 30-year negotiator of sports-venue deals, told deMause that cities are “always poorly represented” and often “get stars in their eyes.”  In the “most scandalous” deal Nagourney helped negotiate, he told deMause, “We put in all these ridiculous things and the city (St. Louis) did not have the sense to say no to any of them.” Nagourney says this always happens, because cities use in-house attorneys to negotiate these deals. Team officials understand all the issues and where the money is — concessions, advertising, TV rights and so on — while city attorneys do not. 

Teams threatening to leave town has become a routine bargaining chip, even though teams rarely follow through with the threat, according to deMause’s decades-long research of sports venues. DeMause calls it extortion and says the gambit works very effectively, since cities do not call team owners’ bluffs.

In Milwaukee’s case, Bucks owners keep dangling the NBA’s threat of relocating the team. Seattle is reportedly eager to get another NBA team. DeMause says that politicians’ fear of losing a team usually trumps public opposition and empirical data by economists.

Politicians often go to great lengths to get new sports venues financed. For example, in a deal negotiated in 1996 by former Brewers owner and MLB Commissioner “Bud” Selig, the City of Milwaukee agreed to give $1 million annually to Miller Park. This payout continues, even though the city receives no property taxes from the stadium, the Brewers or any ancillary enterprises, including parking and franchised restaurants. 

Many economists assert that team owners should finance their own new digs. The owners of several teams, including the San Francisco Golden State Warriors, are doing just that.

Some NBA teams are now valued at $2 billion and stratospheric TV deals will reportedly make every NBA team worth at least $1 billion within a decade. With those numbers, why aren’t government leaders demanding that Bucks owners invest much more, if not the full freight? And why not ask Herb Kohl to donate more? He bought the team for $18 million in 1985 and profited from free rent and eye-popping revenue shares before selling it last year for $550 million. Other arena tenants, including Marquette University and AHL’s Admirals, pay hefty rent — in MU’s case, it’s $20,000 per game.

Mayor Barrett has offered to relinquish at least $1 million a year in parking and ownership of prime real estate. However, that lost revenue may soon be forgotten (out of sight, out of mind), and thus not become a source of annoyance to city officials who have to make up for it. As long as public subsidies are not paid outright in cash, they’re easier to rationalize and accept. But the public costs are the same.

A 2013 report by the City of Milwaukee’s Legislative Reference Bureau noted “proponents of public financing for sports venues have often abandoned the ‘economic impact’ argument and contended the value of sports venues is the added prestige gained by the host city from having a professional sports team in town.”

Just don’t try to take that warm-and-fuzzy feeling to the bank.

Thumbs-down on state arena funding

Only 17 percent of Wisconsin voters back proposed state funding of $150 million to support a new arena complex for the Milwaukee Bucks, according to a recent Marquette University Law School poll. In the Milwaukee metro area, opposition to the funding stands at 67 percent, compared with 88 percent of residents outside of Milwaukee.

For the record

“The highest-cost (stadium) deals include Indianapolis’ Lucas Oil Stadium, where the National Football League’s Colts play; Paul Brown Stadium in Cincinnati, home of the Bengals; and the Milwaukee Brewers’ Miller Park in baseball. In those cases, the public share of costs, once ongoing expenses are included, exceeds 100 percent of the building’s original price tag.”

— Aaron Kuriloff, quoted in Bloomberg News reviewing Public/Private Partnerships for Major League Sports Facilitiesby Judith Grant Long.

U2 announces 19-city tour

U2 says it will hit the stage in Vancouver next May to open a 19-city tour, playing indoor arenas after a decade of larger outdoor shows.

Promoter Live Nation announced the rock band’s “iNNOCENCE + eXPERIENCE” tour last week. Tickets go on sale today. The tour swings through North America next summer before heading to Europe in September 2015.

U2 is obviously hoping for a complete recovery by lead singer Bono, who was hurt in a bicycle accident in New York City last month. During a surprise gig in New York’s Times Square this week, Bruce Springsteen and Chris Martin filled in for the vocalist.

The band will play two nights in each city, with four dates in New York, Los Angeles and London.

The band also will play two dates in Chicago in June.