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Bang From Our Bucks: An Update on the Milwaukee Arena Project

One of the biggest issues the State Legislature faced last session was the debate about including public funding for a new basketball arena for the Milwaukee Bucks. As I described in a column at the time, it was a difficult decision but it made fiscal sense to keep the team, and the resulting tax revenues, in Wisconsin. The trade-off is that the state agreed to pay $4 million a year for 20 years to help fund the stadium, in order to continue receiving $6.5 million a year in tax collections – a net $2.5 million per year win for Wisconsin. Now that we are two years down the road, let’s take a look at how the new arena is progressing.
In 2015, Wisconsin was at a crossroads with the Bucks. Without a new arena, the National Basketball Association (NBA) promised to move the team to another state. Under that scenario, Wisconsin would have been left with an aging Bradley Center (on which we owed $20 million in debt service) without a tenant, and incoming tax revenue to offset costs. If you travel on 43 North through the heart of Milwaukee you will notice a much brighter picture today.
Construction on the new arena is well underway. The building is now completely enclosed and is on track to open next year in time for the 2018 NBA season. One major initiative during the construction process has been workforce development and providing training opportunities for young people to enter the skilled trades. Since construction began a little more than a year ago, 3,200 workers completed safety training and 800 of those were apprentices. Building the Bucks arena is giving these individuals an opportunity to build their careers.
Across the street from the new arena, the Bucks also just built a $31 million, state of the art practice facility. The arena district has also drawn new development to the area, such as Froedtert Hospital and the Medical College of Wisconsin who just unveiled a new $10 million health clinic and walk in facility on the Bucks campus. Both of these buildings were paid for entirely by the Bucks. As of September, around 2,000 people have participated in work related to the new Milwaukee Bucks arena. The allure of the new Bucks arena and revitalized downtown stadium district made these development projects possible.
The impact of keeping the Bucks in Milwaukee extends past Southeast Wisconsin. The Bucks recently added a “G-league” development team in Oshkosh, The Wisconsin Herd. The team is playing in the brand new Menominee Nation Arena and has already sold more than 1,100 season tickets for their inaugural season.
The Bucks have also increased their role in the surrounding community. As part of their pitch to the state, the new ownership team of the Bucks stated their goal to have the organization become a more active part of the surrounding community and state. So far they are walking the walk. Last year, the Bucks started “The Bucks Foundation”, a non-profit arm of their organization to focus on giving back and improving the community.
In just over a year since its creation, the Bucks Foundation has donated $1 million in grants to 15 non-profit community organizations. Other early achievements of the Bucks Foundation include: partnering with local schools, hosting youth basketball clinics, distributing thanksgiving dinners, starting a reading incentive program and more.
The added benefits of the Bucks staying in Wisconsin are definitely a welcome bonus, however my decision to vote for the arena deal came down to the fiscal impact. The state agreed to pay $4 million a year for 20 years towards the new arena. When the arena deal was being debated, we knew that Wisconsin received $6.5 million from NBA players’ income taxes the previous year. That was the minimum amount we could expect to receive each year moving forward. However, last year the state received a check from the NBA for $9.3 million. Trading $4 million for $9 million is a good deal for Wisconsin taxpayers. That’s income we would not receive had we allowed the Bucks to leave Wisconsin.
It’s important to note, while the state’s costs are fixed and capped, the money we take in from taxes NBA salaries can continue to climb. In the last three years alone, the NBA salary cap has grown from $63 million to $101 million this season. The NBA signed a nine year, $24 billion TV deal which went into effect this season. Player salaries are expected to continue to rise. More money for players means more income taxes for the state of Wisconsin, and more revenue to contribute towards roads, public schools, etc. We will see the total impact of the latest increase after players file their 2017 taxes.
While I am not an NBA fan, and I haven’t been to any Bucks games this year, I am a fan of economic development, job opportunities and increasing tax revenues. For those reasons there is no reason to “Fear the Deer” deal. The arena deal was the best fiscal option for the state at the time and we have already begun to see the dividends of that decision. I will continue to update you on these issues.
For more information and to connect with me, visit my website http://legis.wisconsin.gov/senate/17/marklein and subscribe to my weekly E-Update by sending an email to Sen.Marklein@legis.wisconsin.gov.  Do not hesitate to call 800-978-8008 if you have input, ideas or need assistance with any state-related matters.