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Bucks president softens criticism of Milwaukee as ‘racist’

Milwaukee Mayor Tom Barrett said he’s eager to work with Bucks president Peter Feigin to improve the city’s race relations after the NBA executive last week called the city the “most segregated, racist place” he has seen.

However, Feigin said this week in a statement that he didn’t intend to characterize the city as “overtly racist,” that it’s “a terrific community with wonderful people” and he is “proud to be a part of it.” according to the Milwaukee Journal Sentinel.

Barrett and Feigin, who is from New York City, had a “good conversation” on Monday, the mayor said.

“I hope we can change his feelings, but to do that, we’ve got a lot of work to do,” Barrett said.

Last week, the Wisconsin State Journal reported that Feigin called Milwaukee the “most segregated, racist place I’ve ever experienced in my life” during a speech in Madison.

“It just is a place that is antiquated. It is in desperate need of repair and has happened for a long, long time. One of our messages and one of our goals is to lead by example,” Feigin was quoted as saying.

In his statement on Tuesday, Feigin said the comment came as he was “addressing a question about the social, economic and geographic divides that exist and how we can help address them.”

Barrett said that Feigin and the Bucks’ ownership team “seem to be a willing partner” to address the racial disparities in the city of 600,000 along Lake Michigan, which a 2012 Manhattan Institute analysis of census data found is the country’s most segregated metropolitan area, surpassing Chicago, Cleveland and Detroit.

Feigin has said the team is committed to helping Milwaukee. In May, the Bucks’ owners agreed to pay workers at the new $500 million downtown arena at least $12 per hour by next year, and at least $15 per hour by 2023. The agreement also includes provisions to protect workers’ ability to unionize and ensure that the team hires workers from Milwaukee’s poorest neighborhoods.

The deal is expected to apply to about 1,000 employees, including full- and part-time workers at the arena and the team’s practice facility and parking garage.

Wisconsin Republican Gov. Scott Walker signed bipartisan legislation in August 2015 that committed taxpayers to paying half the cost of the arena over the next 20 years in exchange for the team remaining in Milwaukee. The new arena is expected to open in 2018.

2015: Another eventful year for Wisconsin

A failed presidential bid, a new job for Rep. Paul Ryan and a capital city on edge were some of the most notable stories in Wisconsin in 2015. A look back at those and others:

SCOTT WALKER: The Republican governor spent the first half of the year hop-scotching across the country laying the foundation for his presidential run, visiting early primary states and courting Republican donors. He officially jumped into the race in July but floundered in a crowded field that included real estate mogul Donald Trump. Less than three months later, with poor poll numbers and the prospect of dwindling donor support, he was out.

PAUL RYAN: Wisconsin’s other national political figure found himself under pressure to take over as House speaker after John Boehner announced plans to quit the job. Ryan appeared to want nothing to do with the job before relenting and being elected in October.

MADISON UNREST: Wisconsin’s capital city was on edge for weeks after Tony Robinson, a 19-year-old biracial man, died in a confrontation with a white police officer in an apartment building in March. Robinson’s death sparked waves of street protests, but District Attorney Ismael Ozanne ultimately decided that no charges were warranted against Officer Matt Kenny.

WISCONSIN DRIVERS: The state’s drivers got the green light to hit the gas _ on some roads, anyway _ after Walker signed a bill giving state transportation officials the power to bump the speed limit from 65 mph to 70 in some places.

JOHN DOE INVESTIGATION: For nearly three years Walker endured ugly headlines as the state Government Accountability Board and Milwaukee prosecutors pursued a John Doe investigation _ a procedure similar to a grand jury proceeding where information is tightly controlled _ into whether his 2012 recall campaign illegally coordinated with outside conservative groups on issue ads. The state Supreme Court finally halted the probe in July, ruling such coordination is legal. Three months later, Walker signed a bill prohibiting prosecutors from using the John Doe against politicians.

YOUTH PRISON INVESTIGATION: Word broke in December that the state Department of Justice has been investigating allegations since January of misconduct at the facilities housing youth prisoners in Irma. Allegations at Copper Lake/Lincoln Hills School included sexual assaults, physical confrontations and child neglect. A top corrections official and the Copper Lake/Lincoln Hills superintendent were relieved of their duties.

MILWAUKEE ARCHDIOCESE BANKRUPTCY: A federal bankruptcy judge approved a reorganization plan for Milwaukee’s Roman Catholic archdiocese in November that called for distributing $21 million to hundreds of clergy sex abuse victims. The plan splits most of the money among 355 people. Another group of 104 people will get about $2,000 each. Archbishop Jerome Listecki apologized to victims in court shortly before Judge Susan Kelley approved the plan, saying he believes the archdiocese has turned a corner.

TOMAH VA MEDICAL CENTER: Wisconsin Veterans Affairs Medical Center Chief of Staff David Houlihan was put on leave in January while the U.S. Department of Veterans Affairs investigated allegations of overprescribing narcotic pain medications and retaliatory behavior at the Tomah facility. In August the VA’s inspector general said deficiencies in care led to the death of 35-year-old Marine Corps veteran Jason Simcakoski in 2014. Houlihan was fired in October, a month after the center’s director, Mario DeSanctis, was dismissed.

UNIVERSITY OF WISCONSIN SYSTEM: A tough year for the UW system included a $250 million budget cut and a tuition freeze. State lawmakers also removed tenure protections for UW professors from state law, though system regents were considering restoration of some protections in a process expected to last into the spring.

LABOR UNIONS: Not a good year here, either, as Walker signed a bill making Wisconsin a right-to-work state. That means workers can’t be required to join a union or pay union dues, a change likely to erode membership. The state AFL-CIO is suing, arguing the law is unconstitutional.

MILWAUKEE BUCKS: The NBA team is getting a shiny new $500 million arena, with taxpayers committed to half that under a bill signed by Walker. The new building may open for the 2018-19 season.

SUPREME COURT UPHEAVAL: Longtime Chief Justice Shirley Abrahamson was bounced from that post by the court’s conservative majority after voters approved an amendment letting the justices pick their chief rather than going by seniority. Justice Pat Roggensack was made the new chief. Separately, 77-year-old Justice Patrick Crooks died in his chambers in September, giving Walker an opening to appoint conservative-backed Rebecca Bradley to finish his term. She’ll have the advantage of incumbency in the spring election for a full 10-year term.

MARTY BEIL: The often brusque leader of the Wisconsin state employee labor union died in October at age 68. Beil was the face of the union for years and was at the center of the losing fight against Walker’s signature public union restrictions.

RUSS FEINGOLD’S RETURN: After losing the U.S. Senate seat he’d held for 18 years to Republican Ron Johnson in 2010, the Democrat announced in May that he would run against Johnson in 2016.

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.

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

Packers debut development plans for new ‘Titletown District’ near field

The Packers unveiled plans this month for a new business district west of Lambeau Field, a development that will feature a four-star hotel, brewery and restaurant and a 10-acre public plaza.

It has been dubbed the “Titletown District,” borrowing on the nickname assigned to Green Bay for being home of the 13-time world champion Packers.

The Packers said they would invest about $65 million into the project. When adding in estimates from other organizations involved, the total initial investment could be as much as $130 million.

Packers president Mark Murphy said the team doesn’t plan to seek public money for the project, though it might look into some tax credits normally associated with such developments.

“We continue to build on Lambeau Field as a destination, and to bolster economic development in the area,” Murphy said at a news conference at Lambeau Field.

“And with the way we continue to acquire land around Lambeau Field, we continue to have an eye on the future and trying to further regional economic development in this area.”

Like other NFL teams, the Packers are flush with cash, bolstered in part by the windfall from the league’s massive broadcasting deals. The Packers last month reported that revenue from the 2015 fiscal year topped $375 million, up 16 percent from the previous year.

The perennial NFC contender has a national fan base and one of the league’s most popular players in MVP quarterback Aaron Rodgers.

But they’re unique from the 31 other NFL franchises in that they are a publicly owned team in the league’s smallest market. That creates bonds with the community that most NFL towns don’t have with their teams.

Plans for the plaza call for a “park-like setting” with year-round programming including fitness-related activities and cultural opportunities. There would be an ice-skating rink in the winter.

Future phases of the project could include residential buildings. Groundbreaking will likely start this fall with the goal of completing the project by fall 2017.

“Now as I look to the future, developing Titletown is an important factor to further (the) game day experience for our fans, which will always continue to be priority,” Murphy said.

But the driving force, he said, was to make sure the space was used year-round by the community as it evolved into an “authentic Wisconsin neighborhood.”

The Titletown district has been in the planning stages for years as the team bought up land. Thursday’s announcement ended months of speculation.

The three anchor tenants will be the 150-room Lodge Kohler hotel, run by the plumbing-and-hospitality company Kohler Co.; Hinterland brewery; and Bellin Health, a major Packers sponsor.

Herbert Kohler Jr., chairman of Kohler, said signing up for Titletown was “almost a no-brainer.”

“This is the first time for the Packers, a big development district like this,” Kohler said. “So they’re new to the game, and we knew we would have to design a special hotel for this particular location.”

Anchored by Lambeau Field to the east, the district already has a tenant to the far west with a Cabela’s retail store.

A similar commercial district is near the New England Patriots’ home in Foxborough, Massachusetts, called Patriot Place. Murphy said Titletown would be different because it would include residences and the public plaza.

On the Web …

Visit “Titletown.”

Wisconsin Assembly approves $250 million in public funds for Bucks arena deal

The Wisconsin state Assembly voted on July 28 to spend $250 million in public funds on a new arena for the Milwaukee Bucks.

No one spoke against the measure, which passed on a bipartisan 52-34 vote as Bucks coach Jason Kidd and team president Peter Feigin watched from the gallery. They made the rounds before and after the roughly hourlong debate, posing for pictures with both lawmakers and members of the public.

“The Bucks will not only remain home in Wisconsin, but we’ll soon begin a transformative economic development project that will help revitalize our community and region,” Feigin said in a statement issued by the team.

The bill, which passed the Senate on a bipartisan 21-10 vote earlier this month, now heads to Gov. Scott Walker for his signature. Walker, a Republican presidential candidate who was campaigning in Philadelphia at the time of the vote, has been working with lawmakers to reach a deal and was expected to sign it.

Walker called it a “good deal all the way around” while speaking with reporters at Pat’s King of Steaks, one of two Philadelphia cheesesteak institutions he visited Tuesday.

“For us, it’s what we’d hoped for,” Walker said. “A good, bipartisan vote. It had strong votes in both the Assembly and the Senate. A lot of hats off.”

Both Republicans and Democrats said the deal was good for Wisconsin because it would keep the Bucks and the income taxes paid by NBA players and staff in the state. Under the plan, taxpayers will be on the hook for $250 million initially, but that commitment will grow to $400 million with interest over 20 years. Current and former Bucks owners are contributing another $250 million.

There is also a $2 ticket surcharge.

Opposition crossed party lines just as did support. Opponents argue taxpayers should not subsidize the cost of a private arena, especially just weeks after the Legislature passed, and Walker signed, a budget that cuts funding for other public assets, including a $250 million reduction to the University of Wisconsin.

“Government shouldn’t subsidize professional sports facilities, particularly state governments,” said state Rep. Dean Knudson, of Hudson, one of 20 Republicans who voted against the plan.

Fourteen Democrats also voted against, but all of the opponents were silent during debate that came in an unusual summer session of the Legislature called specifically to pass the Bucks bill.

“I’m ready to go home,” Knudson said. “We’re here in the summer. It wasn’t going to change anything.”

Supporters said the deal would help Milwaukee and the state’s economy, while also ensuring the team doesn’t move elsewhere. Feigin told the Legislature’s budget committee earlier this month that if construction on a new arena didn’t begin this year, the NBA would move the team, possibly to Las Vegas or Seattle.

“It is cheaper for us to pass this bill than defeat it and have the team leave,” Republican Assembly Speaker Robin Vos said. He noted that there is no long-term commitment from the state to operate and maintain the arena and the Bucks and team owners are responsible for maintenance and cost overruns.

The $250 million initially coming from taxpayers includes $47 million from the city of Milwaukee in the form of a parking structure and tax increment financing. The rest of the $203 million comes from bonds to be paid off by state taxpayers, Milwaukee County and the extension of existing local taxes on hotel rooms, rental cars and food and beverage.

Several backers of the plan said it was better than Walker’s original proposal, which called for the state borrowing $220 million.

“This is really a very proud day, not only for Milwaukee but for Wisconsin,” said Democratic Rep. Christine Sinicki. “This will really, truly help put Milwaukee on the map.”

Does Milwaukee need the ‘biggest outdoor sports bar’?

Wes Edens’ vision for Brew City goes beyond a tricked-out new downtown sports arena and a winning NBA team. The Milwaukee Bucks co-owner wants to create an entertainment destination on Fourth Street between Highland and Juneau Avenues — a complex with several floors of bars and restaurants that he thinks would really put Milwaukee on the map.

“People in Wisconsin are plenty hardy,” Edens said in an   April 9 interview with the Milwaukee Journal Sentinel’s Don Walker. “Keep the rain and snow off their head. Get them out of the wind. People will sit and drink beer and watch (the Packers or) a World Cup game. I want that space to be the biggest outdoor sports bar in the country. That’s how I think of it. It gives people a reason to come down there.”

The enclosed mall would be located across from the new arena, with a courtyard featuring giant video screens á la Times Square or Las Vegas and cozy fire pits like those at Bar Louie on Water Street.

Urban entertainment destinations of the type embraced by Edens are sprouting up — and often withering — across the country. Edens was especially inspired by seeing Kansas City Live! and LA Live! (exclamation points not added for emphasis). Cordish Companies of Baltimore has developed about 10 projects with “Live!” names. Assuming Cordish has a trademark, Milwaukee would have to invent its own perky moniker.

Ten-syllable phrases are a mouthful, so just call them “bar malls.” Open-container policies often allow patrons to tote beverages from venue to venue, like at roving frat-house parties (or Brew City’s countless festivals).

WiG sought out stats and stories about these growing urban phenomena. Their websites feature smiling revelers and punchy text. WiG also unearthed some sobering bar-mall sagas.

Edens’ plan for Milwaukee begs a key question: Does the city lack entertainment destinations? Don’t the “City of Festivals” and “Best Bar Town in America” (as dubbed by Bon Appetit) epithets suggest the city is an entertainment destination? Maybe we’re not New Orleans or Nashville, but Milwaukeeans know how — and where — to have fun.

There are about a dozen “entertainment zones” in or near downtown (plus Summerfest park). The term “EZ” refers to streets with many “naturally occurring” bars and restaurants, as opposed to “created-overnight” bar malls, known “urban entertainment districts.” Milwaukee’s Water Street is cited nationally as a model of an “authentic entertainment zone.” 

Milwaukee has been famous for beer since Chicago’s 1871 Great Fire destroyed that city’s many breweries. We’ve got the drinking thing down pat. Milwaukee once had more bars per capita than any major U.S. city. Infogroup, a national stat-tracker, reports that now we’re merely fifth, with one bar for every 1,052 people. We trail Pittsburgh, St. Louis, Cleveland and Cincinnati.

Despite Milwaukeeans predilection for bars, packaged entertainment districts, such as the one proposed by the Bucks, often go bust. In fact, since these districts became part of the urban renewal trend that began in the mid-’90s, many have come and gone, or died and were reborn under new ownership.

Urban planner Nathaniel Hood says these often-bland “single-use monocultures” harbor many pitfalls.  Most feature national chain businesses, making them feel like Anywhere USA. The Bucks have assured city officials that 25 percent of mall vendors will be local, which means 75 percent will be franchises.

In “Urban Entertainment Districts: Blocks Where No One Has Fun,” Salon columnist Will Doig notes that even well-tenanted malls, such as Kansas City Live!, can feel like “a very enthusiastic ghost town” when no big event lures patrons.  Hood advises looking before leaping:  “Instead of asking how we could fund an entertainment district, we should be asking ourselves: Do we even want an entertainment district?”

Doig points to Boston’s Fenway Park as an example of a sports venue within “a neighborhood that’s very vital,” the “wildly diverse” Kenmore Square. Doig says Fenway shows such districts work better without all the bureaucratic attachment and parenting.

Wrote Doig: “In Cincinnati, rather than busting in with relocation plans and a branding scheme, the city designated five neighborhoods as Community Entertainment Districts, where aspiring restaurateurs can get a liquor license directly from the state for about $1,500, rather than on the open market, where they cost up to $30,000.” 

Local bar impact

The Bucks’ mall will not exist in a vacuum. How might suddenly adding 280,000 square feet of bars, restaurants and retail stores impact existing nearby nightlife? Diverse venues on Water Street and Old World Third Street now sizzle every weekend. Arena-adjacent Old World Third Street has historic cachet and daytime traffic to boot. No one has bothered to explain why we also need a Bar-Mart and no one has explored whether it would cannibalize existing businesses.  

Destination consultant Rob Hunden cautions against adding too many venues downtown at once. Ald. Bob Bauman raised similar concerns at a Common Council hearing.

WiG asked barkeeps on Third and Water streets about the proposed mall. Responses were mixed.

They welcome a new arena, since games and concerts bring crowds. But most said it’s hard to form an opinion until a specific plan is presented.

Or maybe a plan won’t be presented — since this mall is considered a private development, albeit one with strong government support. Gov. Scott Walker’s draft bill on the project would have made arena-related ancillary development tax exempt, including a bar mall. However, the mayor won a fight to ensure mall businesses would pay property taxes.

Some businesses on Third Street fear a mall might decrease now-robust post-event traffic. Across the river, some Water Street entrepreneurs are confident they’ll out-compete any mall. Given that scene’s longevity and cool cred, that could be true. If it is — if a block-long new mall flounders — we’ll end up with another white elephant located just blocks from the long-struggling Grand Avenue Mall.

Unlike spontaneous entertainment zones that evolve independently, entertainment malls often get public funding. The Bucks’ arena and bar mall project is seeking a massive (but largely hidden) city subsidy (if the Common Council approves it) worth more than $90 million.

The mayor has pledged to give the Bucks — essentially for free — a paid-for parking structure on Fourth Street, built for $30 million, plus a 1-acre lot worth $1 million. The city would forgo at least $15 million in net parking revenue over 30 years. Officials say the city also would pay about $1.5 million to raze the parking complex and spend $12 million for infrastructure inside and outside the mall.

The city would then build a new parking garage for $35 million on Park East land that the Bucks hope to get from the county for free. The city would share 50 percent of parking income with the Bucks. The mayor talked the Bucks down from the original demand for all the parking revenue.

So, does Milwaukee really need an urban entertainment district enough to warrant all the proposed giveaways? Edens seems like a gifted pitchman, but can we afford to bet such high stakes on the New Yorker’s insight into Milwaukee’s local culture, particularly in light of the failures of similar projects in other cities.

The Bucks’ owners are masters of real-life Monopoly. Politicians at all levels have agreed to give these recent Milwaukee visitors about “30 acres and an arena.” A bar mall would be thrown in as a beer chaser. It’s enough to drive anyone to drink. 

Public hearing on Bucks arena plan set for July 2

A public hearing will be held next month on a plan for the city of Milwaukee to spend $47 million as part of the $250 million public financing package for a new Milwaukee Bucks arena.

Mayor Tom Barrett tells the Milwaukee Journal Sentinel that the city plan won’t be implemented without the Legislature’s approval of the state’s larger share of that public financing package for the $500 million arena. Bipartisan opposition has stalled that state proposal.

But he said it’s important for the city proposal to undergo public review. The first hearing is July 2.

Under the plan, the city would spend $35 million to develop a parking structure downtown and $12 million for public improvements near the arena, including a plaza space.

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.

Fair play vs. corporate welfare in Milwaukee

Amid the fall political campaigns, a dynamic grassroots movement for justice in Milwaukee made headlines, reminding us that change does not necessarily come from politicians but from people working together in their communities.

The organization Common Ground is providing much-needed pushback to the steam-rolling effort by business leaders to get hundreds of millions in taxpayer dollars to build a new arena for the Milwaukee Bucks. The BMO Harris Bradley Center is just 25 years old but is said to lack the latest technology and luxury boxes necessary to make a sufficient profit and satisfy the NBA.

Wall Street titans Marc Lasry and Wes Edens recently bought the Bucks for $550 million. The NBA laid down an ultimatum for a new arena to be built in Milwaukee by 2017, and Lasry and Edens offered to kick in $100 million. Former Bucks owner Herb Kohl said he’d throw in another $100 million. It’s the remaining $200 or $300 million that taxpayers might be asked to contribute.

In the midst of an aggressive campaign to woo support for this latest corporate welfare scheme, Common Ground made waves with its own proposal, “Fair Play: A Campaign to Foster Greatness in Public Spaces.”

The basis of “Fair Play” is a devastating report about the crumbling, hazardous conditions of parks and recreation facilities in Milwaukee County and a detailed proposal for revitalizing them. That report, “Envisioning Fair Play,” is available at www.fairplaywi.org. Read it and weep. It dramatizes through quantitative data and photographic evidence the disgraceful neglect of Milwaukee’s public spaces.

In the report, architectural and landscaping plans show how improvements can be made at different sites, with startling cost comparisons. The new Bucks arena will have 18,000 seats at a cost of $27,777 per seat. Comprehensive improvements at Vincent High School will cost the equivalent of just 320 Bucks seats. Lincoln Park’s makeover can be done for only 221 Bucks seats.

Common Ground demands that if hundreds of millions of public dollars are spent to subsidize the privately owned Bucks, at least $150 million must be allocated to repair Milwaukee’s parks and recreation facilities. If you agree, tell your alderman or county supervisor ASAP.

It’s infuriating how politicians continually privilege private interests with tax breaks and subsidies while ignoring neighborhoods and public spaces — the places where most of us actually live. When owners can slap down a half billion dollars for a team at the same time that team members are paid millions annually and game tickets are unaffordable for half the people in the city, why should the public be expected to pay up?

But what about the economic impact?! 

Most studies of publicly funded sports venues — including those by the libertarian Cato Institute and the conservative Heartland Institute — reveal exaggerated impact projections and little or no economic boosts for local economies.

But Milwaukee’s image!

What kind of blinders must people be wearing to worship the image of a luxury, high-tech playpen while streets, housing, schools and parks decay around them?

I applaud Common Ground, a coalition of groups that is doing focused, effective work on this public funding issue and other fronts like rehabbing foreclosed properties and establishing the Common Ground Health Cooperative, an affordable insurance option.

Get involved

Common Ground meets the third Monday of each month at 2375 N. 25th St. For more, go to www.commongroundwi.org or call  414-751-0755.

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