Guest Column from Assembly Majority Leader Jim Steineke - New Bucks Arena Brings Increased Tax Revenue and Jobs
April 16, 2015
As the Milwaukee Bucks head into the playoff season, there’s a lot going on to make sure they remain a Wisconsin team in the future. As anyone who has been to a Bucks game knows, the BMO Harris Bradley Center is in need of restoration. What the NBA is demanding is an entirely new arena. With that new arena projected to cost $500 million, there has been vigorous debate among stakeholders to identify the best route of funding.
Understandably, legislators are hesitant to direct state dollars to a project without convincing evidence that taxpayers will be protected. However, it is important to remember that either way, state investment will be inevitable whether there is a new arena or not. The state owns the Bradley Center and would be responsible for over $100 million in maintenance and debt service costs.
The latest financing model for the new arena is a public-private financing package that includes $250 million from the Milwaukee Bucks’ current owners and former owner Herb Kohl. And while Governor Walker proposed $220 million in state financing, legislative leaders have made it clear that the state’s commitment won’t exceed $150 million. That leaves a hole of around $100 million for local units of government to fill.
Under the Governor’s “Pay Their Way” plan included in the biennial budget, the state releases the bonding money after all other funding for the arena has been secured. Once the bonds are paid off, the tax growth would return to the state. In an effort to protect tax dollars, Assembly Republicans wanted a provision included that if the Bucks were ever sold, the revenue from that sale would first go to pay back these appropriation bonds. As an added benefit, if the new arena is built, the state will no longer own the Bradley Center or the new arena, taking taxpayers off the hook for future maintenance and improvement costs.
It’s unclear what the finalized funding model will look like, but it is clear that we must do something. Without a plan for a new arena, the NBA has stated that they will buy the Bucks franchise and move them to another market, costing the state nearly $10 million a year in lost income tax collection. So while the easy political answer is to do nothing, we cannot let the politics cloud our vision.
The Milwaukee Bucks and their design team have unveiled their plans for the new multi-purpose arena which also includes a mixed-use development area to help stimulate the downtown Milwaukee economy. The goal of the owners is to create an arena designed for maximum flexibility and year-round use that creates a ripple effect of growth, development, and transformation for the entire community and state. According to an analysis by the Metro Milwaukee Association of Commerce (MMAC), the economic benefits of a new stadium are estimated to be $95.8 million in yearly revenue with 2,350 jobs supported. This kind of economic development is desperately needed in a city that has chronic unemployment among minorities, serious crime on the rise, and a growing concern that the city is on a downward trend.
Legislative leaders will continue to call on the city and county for more funding for the proposed project since they will see the most direct economic benefits. Leadership from the local level is critical. We need the Mayor and the County Executive in Milwaukee to show they are all in to get the arena project done. After all, if they aren't all in at the local level, why should people from the other three corners of the state be? Moving forward, it’s my hope that we can find a funding plan that all Wisconsinites can support.