How Will NBA Arena Benefit the City?
NBA Commissioner Adam Silver promises a new arena will launch a Downtown renewal. Is he right?
The BMO Harris Bradley Center, Milwaukee Theater and UW-Milwaukee Panther Arena.
The Adam Silver show came to town just before Thanksgiving holiday and the NBA Commissioner did his best to sell Wisconsin taxpayers on giving the Milwaukee Bucks a Christmas gift of about $200 million or so. This is a challenge akin to the proverbial selling ice to eskimos.
Here was Silver, who has an estimated net worth of $20 million and earns $10 million annually as NBA Commissioner, telling us we need to dig into our pockets to help out Milwaukee Bucks’ owners Wesley Edens and Marc Lasry, who have a combined net worth of some $3 billion, and the team’s players, whose average salary is about $3.9 million.
In an age when the wealth gap in America is the greatest it’s been since at least the 1920s, and greater than in any developed nation in the world perhaps nothing personifies this ugly gulf more than the taxpayer bailouts of pro sports teams, wherein low and middle income taxpayers pay most of the money to subsidize a business that is often a glamorous recreational sideline for the plutocrats who own sports teams.
The idea that a new pro sports arena or stadium will have spin-off economic benefits for a community has been disproven by countless studies and may be the only issue on which the liberal Brookings Institution agrees with the right-leaning Heartland Institute. Both conclude that new pro sports facilities have little impact or even a negative impact on net personal income of residents in the surrounding area. Given that the plans largely work through a broad tax that all pay to help the wealthy, perhaps that’s not so surprising.
Silver, however, insists the league is not looking for a handout, as he told Walker. As proof, the commish also trotted out the thread-bare argument that replacing the Bradley Center would be about “far more than NBA basketball” because “the vast majority of the events in the area will be non-NBA related.”
Yes, the Marquette Golden Eagles and Milwaukee Admirals play in the Bradley Center, but it works just fine for them. Only the Bucks have demanded a new arena. Ah, but what about those concerts the Bradley Center books? Walker offered Silver some help with that argument, noting that the Bradley Center, built in 1988, “is viewed by new-arena boosters…as an aging and antiquated arena” which Bradley Center officials say “is getting increasingly difficult to attract top names in entertainment to perform there.”
Yes, Bradley Center officials do say this, but they are also the ones leading the charge to get more revenue and a new arena for the Bucks, which you might want to mention to readers. As for the idea that a 1988 facility is too old for entertainers, why are the Pabst Theater (built 1895), Riverside Theater (1928) and Turner Hall (1883) so successful at attracting top entertainers to Milwaukee? Maybe the Bradley Center is too new.
Salesman Silver also lauded the proposed state “jock tax,” which would take the amount in income taxes paid by NBA players, and devote that to subsidizing the new arena, the argument being that without an NBA franchise, this tax revenue could be lost. Warming to the task, Silver noted that with new TV contracts taking effect in 2016 and 2017 and a higher salary cap for NBA players, the amount of income taxes that could be diverted toward paying off bonds would increase significantly. Mayor Tom Barrett agreed, noting that the potential taxes paid by players, estimated at $10.7 million in the 2012 tax year, could rise to $25 million a year in the future.
But if the players are paying nearly two-and-a-half times more in taxes, that would mean their salaries have risen to nearly $10 million per player, which makes a tax subsidy for them more than twice as indefensible.
This suggests the Bucks owners want a lot of land, and seek to build a big complex. The logical ancillary development might include various Bucks-themed retail: bars, restaurants, a sports apparel store. I have also heard they might build some residential housing — apartments or condos. All of which raises lots of questions that need answers for the taxpayers:
-Do they want the Bradley Center torn down? I’m guessing the answer is yes; otherwise, there is another arena out there that could compete for concerts, Marquette Golden Eagles and Milwaukee Admiral games. Currently the MU and Admirals teams subsidize the Bucks and I’d think the new owners would want to continue this. So who pays for tearing down the Bradley Center, the Bucks or city taxpayers?
-Will the Bucks absorb the remaining $27.5 million in debt from the cost of turning the old Auditorium into the Milwaukee Theatre, or will the taxpayers?
-Will taxpayers pay for the costs of tearing down the newly renamed UWM Panther arena? And will they have to make up any net revenue it may contribute to the Wisconsin Center District and convention center? WCD Board Chair Frank Gimbel has insisted the loss would be significant; certainly the taxpayers deserve a full accounting of this.
-Will the Bucks pay any property taxes on their new arena? In the case of Miller Park, the majority of the facility was paid for by taxpayers so most of the facility is exempted from taxes. That’s a double whammy for taxpayers: they pay to subsidize a stadium or arena and then pay again to make up for property taxes lost on it. It sounds like taxpayers could pay for as much as 40 percent of the new arena; will that percent be exempt from taxes?
-Will the Bucks pay any property taxes on the ancillary development, whether its a bar, restaurant or residential housing? If not, that’s not only a loss to taxpayers, but means you will have tax exempt retail competing with other downtown retailers.
-Will the ancillary retail be enclosed within the Bucks complex or built as part of the city proper? The former captures all revenue for the Bucks, the latter could add to the urban fabric of Downtown and give other restaurants and bars (all of which pay taxes) a chance to compete for spending by Bucks fans.
-Will the Bucks pay for any environmental costs associated with the Journal Sentinel building (which some believe could be significant for a building that long housed a huge printing press) or will the taxpayers?
I should note that the Bucks owners say they are still keeping their options open as to the final location for an arena. But wherever they build, some of these questions will still be relevant and others will also arise. And the press generally declines to raise them.
If this is truly a good deal for the Bucks, as Silver maintains, there should be no fear of a full transparency. As Silver put it, “ultimately for the citizens of Milwaukee and Wisconsin, they have to decide if a new state-of-the-art arena is in their interest… I would be asking the same question if I was a taxpayer here.”
More about the New Bucks Arena
- Back in the News: Bucks Owners Continue to Cash In - Bruce Murphy - Nov 28th, 2022
- Murphy’s Law: Bucks Subsidy An Issue in US Senate Race - Bruce Murphy - May 9th, 2022
- Murphy’s Law: Bucks Franchise Worth $1.86 Billion - Bruce Murphy - Jan 25th, 2021
- Op Ed: County Parks Lost Funding to Bucks Arena - Patricia Jursik - Jul 7th, 2020
- Eyes on Milwaukee: Fiserv Forum Workers to Get $15/Hour - Jeramey Jannene - Jan 29th, 2020
- Eyes on Milwaukee: Bucks Beat Hiring Targets on Fiserv Forum - Jeramey Jannene - Nov 20th, 2019
- Murphy’s Law: Taxpayers Make Bucks, Brewers Rich - Bruce Murphy - Apr 16th, 2019
- Eyes on Milwaukee: Bucks Unveil Master Plan for Park East - Jeramey Jannene - Mar 15th, 2019
- Eyes on Milwaukee: Bucks Plan Massive Arena Signs - Jeramey Jannene - Feb 12th, 2019
- Eyes on Milwaukee: Bucks’ New Bar Is “The MECCA” - Jeramey Jannene - Feb 7th, 2019
Read more about New Bucks Arena here
Political Contributions Tracker
Displaying political contributions between people mentioned in this story. Learn more.
- December 28, 2017 - Tom Barrett received $400 from Frank Gimbel
- June 29, 2017 - Tom Barrett received $1,000 from Herb Kohl
- March 3, 2016 - Tom Barrett received $5,000 from Herb Kohl
Murphy's Law
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Tear the Bradley Center Down. Bucks pay off the debt of WCD and write it off as land acquisition costs. Sacramento spent $38 Million on land acquisition. Institute a TIF and City uses it for demolition of Panther Arena and remediation of JS site. Kick Frank Gimbel out of WCD, fold new arena into new WCD which now has financial flexibility to expand the convention center the extra 110,000 square feet needed. New arena is untaxed but all other development is on the tax rolls. Instead of UWM building their tiny practice facility for the BB teams they should partner with the Bucks and build a larger facility. The Bucks could get out of St. Francis and practice at UWM and then the team could play smaller games on campus and high profile games at the new arena. Follow the Milwaukee Comprehensive plan and extend Kilbourn Ave to the Courthouse and open up land at MacArthur Square for development. Anything I miss?
Yes, Jeremy, you did miss something – link the whole thing to mass transit/light rail/trolley system so downtown is accessible to the whole community and we can begin to join other big league cities with their light rail/trolley systems. And then link it to the airport and amtrak so one can actually get into and out of the city without a car.
Terrible bait and switch on the article headline.
Bruce,
Thankfully you’ll be asking these questions because the rest of the media is all in on the new arena and they won’t be asking any of these kinds of questions.
I agree Andy, the title of the article has very little to do with the actual article. I’m exhausted. I’m not sure I care anymore.
Bruce, I am surprised you are not commenting on the Journal Sentinel’s glaring omission of a Journalism 101 ethical requirement: the “financial interest disclosure” statement that is has long been considered mandatory when the author or publisher of a story stands to gain (or lose) from its outcome. This should have accompanied every story.
The Bradley Center (a deteriorating wreck due to the NBA’s insatiability) will definitely be torn down. So why is the city being asked to demolish 3 venues of various, scaled sizes, in exchange for just one big arena? The answer lies in the fact that southeast Wisconsin is among the smallest, and, more importantly, poorest, TV markets in the NBA – too small & poor, according to national sports business experts, to financially support even two major league teams – and yet we support three!
The Bucks owners’ understated but unwavering focus on demolishing the Bradley Center, the UW-Milwaukee Panther Arena AND the Milwaukee Theatre demonstrates they are well aware of this markets’ fatal weakness. They therefore need to scorch the earth of as much competition for entertainment spending as they can.
Here’s another kicker: if the “scorched earth” plan succeeds, no large (2,500+) graduations or convention assemblies could EVER take place in May or June, peak months for both activities in Milwaukee. Conventions draw new money into the city, and book years in advance, but those May/June dates would have to be held on the off chance the Bucks make the playoffs. When they don’t, the dates will go unfilled.
The obvious, easy and cheap solution lies to the north of the Bradley Center, which already owns two adjacent blocks, and the next two (in the Park East corridor) are already cleared. Is right next door really “too far” from downtown? Smells like bullshit!
Bruce, I hate to admit it but this is brilliant article. Match it with my obvious points and no one will ever vote for this disaster for these guys. I will expand later but let us have a real debate in this community. If these things make for so much development where is the development around Bradley center and if Bradley is so bad why did NCAA vote to have games her in 2017. These guys are NY hustlers and have stampeded some people into believing that they are going to leave unless we hand them hundreds of millions of dollars. And kick out UWM who does mean much more to the community? Where are the taxpayers return on the dollar? We are giving all the money to them. let us help UWM and Marquette build their programs up and we will be far better off.
Not only do we support three professional teams, but we also support major college athletics. We do all of this very well. No one is clamoring to run off to Louisville or KC. Outside of seattle, the other available markets are lateral moves. Our TV market is small but that doesn’t mean you build the arena in a dumb location. I think north of the BC is a terrible spot and I also believe the arena can be built without tearing down the Milwaukee Theater.
Urban Dweller, NBA just signed big 10 year contract for whole league to be split up. Market size is now meaningless. Only baseball does not split up TV proceeds between teams.
Do any of you ever research anything? Google NBA/TV and you will see all the new contracts and deals cooking up. These things are gold mines. Think Ballmer paid 2 billion for LA for nothing. Not only are they big boys toys but huge profit makers and the state is supposed to ahnd them 250 million or so and get ngthing back fro Granny in Crandon. What kind of stupid business people are you guys???
“The idea that a new pro sports arena or stadium will have spin-off economic benefits for a community has been disproven by countless studies and may be the only issue on which the liberal Brookings Institution agrees with the right-leaning Heartland Institute.”
The studies you cite are from 1997 and 2000. You not mentioning that in implying that there are these myriads of studies is what is called in debate circles…. bullshit.
This story is from 2012: http://www.theatlantic.com/business/archive/2012/09/if-you-build-it-they-might-not-come-the-risky-economics-of-sports-stadiums/260900/
And 2011: http://www.thenation.com/article/162400/why-do-mayors-love-sports-stadiums#
And 2014: http://www.mintpressnews.com/stadium-frenzy-ignores-economics/190351/
Bruce, you rock. Great piece. Can we please set it in 36-point type and send it to every politician and sports journalist in the metro area?
PMD, as much as I’d love to use journalist’s opinions as canon, there are actual studies that refute the notion that all sports stadium’s and arena’s economic impact is overstated. A 2005 study in the Journal of Urban Affairs (a peer reviewed journal, not a news story) demonstrated that the economic impact, positive or negative, is very contextual and varies greatly depending on the situation. Our own Miller park, while not in the study, is one such venue that has had a positive economic impact (Cubs games alone bring in more dollars to the region than is spent in the sales tax all year).
The idea that arenas and stadiums are not worth a subsidy because none of them provide any real positive economic impact is patently false.
The economic impact of sports stadiums: recasting the analysis in context
Santo, Journal of Urban Affairs 27.2 (2005): 177-191
PMD, good articles. Many of us have read these studies over the years.
Why does Bruce rock…. Mom? If the Bucks were asking us to pay for 100% of the new arena, I would agree with the “countless economists” that we shouldn’t move forward. But its a third and I believe that drastically changes the math. Not to build based on principle seems awfully short sighted. Furthermore, the funding mechinism is reasonable. The Bucks will leave without a new facility. That tax revenue will go away.
I strongly backed the Miller Park cause Milwaukee is big baseball town and draws big money into our area from all around, 150 miles or so. We go not as often as I like but many people come here and visit to see Brewers.
Why do you think that the bucks will leave if no new arena? They can still draw big crowds at Bradley when fixed up. More than enough money to fix up. Money is in TV, google NBA?TV contracts. Why does everyone think that these guys will give up this toy?
David, what’s “reasonable” about a funding mechanism that asks taxpayers to come up with ANYTHING for an arena for immensely wealthy people? The new Bucks owners didn’t get rich by being stupid. They’re just demonstrating the same talent here: threaten long enough to take the toys and go home, and odds are people will be cowed into handing over their wallets. For more data on this point, go take a look at FieldofSchemes.com, or read Neil deMause’s excellent book of of the same title.
Andy, you argue that economic impact of sports venues is context-driven but then immediately note that Miller Park wasn’t in the study you cite to, and then ask us to believe your bare assertion that the park brings positive economic impact. Good grief, you couldn’t even find a JS story to back that up? Give me a break.
I can only add that the devil must be chilly tonight, because I’m agreeing with Wisconsin Conservative Digest about something. Wow.
DSMom… did you just criticize me for not finding a JS story to back up my statements and instead used a peer reviewed journal and an additional local example?? Good grief… is this the level of thinking we have to deal with in the discussion of whether we should contribute to a new arena??
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Not quite, Andy. To be precise, I criticized you for citing a study that did NOT include Miller Park, and then for making an unsupported assertion that the park brings economic benefit exceeding the sales tax to the area.
And if by “this level of thinking” you mean “thinking that isn’t characterized by sheep-like devotion to the Sports Good, Taypayer Must Pay” mantra, I certainly hope so. A girl can dream, can’t she?
Seriously? The Miller Park anecdote was just additional evidence that the context matters and that the lack of positive impact is not absolute.
Here’s your JS story… http://www.jsonline.com/news/milwaukee/new-study-distant-brewers-fans-have-263-million-annual-economic-impact-vm94jgd-197535861.html
I’m with David, the “jock tax” is one good example of how we can leverage a way to pay for this in a way that would be no worse than if the Bucks left town. I’m not completely sold on the idea yet, but I’m open to having a real discussion about it.
Well, I see that the JournalSentinel has everyone completely convinced that the only place to put a new arena, regardless of how it’s paid for, is on their, UWM’s and the people’s property. As Urban Dweller points out, destroying three scaled venues to build a single facility scaled to fit and profit the Bucks at everyone else’s expense is nonsense and that Journal Communications doesn’t disclose in every article they run that they have a financial interest in this decision is beyond all journalistic ethics. They went from “a source says” Bucks management prefers this site to presenting it as a fact with no corroborating statement from the Bucks amply demonstrates that they are campaigning to dump their under-used building at public expense.
Consider this: the only reason the Bradley Center is deemed outdated is because the Bucks (and the NBA) can’t control every dollar of their attendees. Talking about ancillary community development is ridiculous as is arguing studies and when they were made! Exactly why would a new arena at the the same site as the Bradley Center attract business or residential development that the Bradley Center didn’t attract? The entire purpose of building a new arena for the Bucks is so that they can absorb any money spent at neighboring businesses as well as building additional luxury boxes for the wealthy at the expense of the taxpayers. Urban development? C’mon. This is 100% absurdist bullshit.
I don’t attend or follow the Bucks yet I believe they are important to MKE and won’t mind paying my share as a taxpayer. I support paying for public schools though I’ve never had children using them (which doesn’t mean I support public support of private schools that, statistically, really is just a financial gift to those already sending their kids to christian schools). But, god damn it, the people should have the primary say in where the thing is built. This process as presented by the JS and the NBA is nothing less than extortion and community rape.
The Grand Avenue was purchased by an undisclosed NY financial concern. My guess is it’s closely associated with the Bucks’ owners (and please don’t forget Jaimie Dimon) and their possible backup plan at the 4th-5th and Wisconsin + Grand Avenue site would be a site that actually might generate some ancillary benefit to the city, particularly if someone like Mayor Barrett would demand that rehabilitation of the old Warner Theater as a Symphony Hall was added to the project as a condition of public funding support.
Children in Milwaukee go to schools that are 130 years old. No way we should pay to replace a 30 year old play palace for the 5%. While the 95% shell out brats and beer for minimum wage.
Wisconsin Conservative Digest (re 3:42 p.m. post):
You’re a publication, right? There’s a little feature in your e-mail program called ‘Spell Check’. Spell Check also flags obvious grammatical and punctuation errors and missing words, all of which examples are present in your brief 3:42 pm post. You might think of employing this handy feature (not ahndy as you might type) next time as a first line of defense against any literate human beings concluding not only that are you a mad man rambling, but that your ‘publication’ would naturally be riddled with similar errors and oversights and therefore not worth reading. Things such as ‘publications,’ ‘digests,’ ‘compendiums,’ ‘newspapers,’ ‘newsletters,’ ‘advertisements,’ ‘magazines,’ ‘periodicals,’ ‘anthologies’ . . . . even ‘blogs’ and ‘commentaries’ comprise a category known as ‘communications.’ Use of any of the above terms carries with it certain expectations of widely-accepted conventions employed–quaint as they may be–as well as an assumption that the typist is at minimum making a sincere attempt to be comprehensible.
It’s highly unlikely I would waste my time reading a publication with the term ‘conservative’ in its name, for the reason that I fear I know too much already, and life isn’t getting any shorter, is it? However, those less committed to the Progressive side of the spectrum–and perhaps me, in a weaker moment–might be persuaded to sample a small offering if the subject seemed interesting, or the writer appeared ‘thoughtful’ or ‘compassionate’ in the diminished significance of those words as applied in ‘thoughtful conservative’ or ‘compassionate conservative.’
Sadly, nothing appears digestible in your post that would entice a literate reader to order the entree.
Go screw yourslef.
Sorbonne several hundred years old, Notre Dame centuries. Harvard several hundred years. Wrigley field 100 years. They can do quite well with some remodeling and TV money.
Andy, not sure why you think I am taking the word of journalists. Those stories quote economists and reference books written on the subject by said economists. So what if none is a study? Also, I never said no stadium or arena has ever generated a positive impact.
PMD, I was looking to give a rebuttal to the general idea that public money for professional sports facility is not always bad. Often it seems to portrayed in the media that way. Also, I was using the study to offset those cited earlier.
Anyway, this discussion has gone down hill. Ill catch you after the next arena article!
For those of you who are pointing to the BMO Harris Bradley Center regarding the lack of nearby development, one only has to look at the North and South walls of the building. Walls like a castle. The design is everything.
Additionally, there are many mentions on this website about how much better Minnesota does things than we do here in Wisconsin. They are building a new football stadium with incorporated park space, office and residential. Progressive or idiotic?
Other than the Jock Tax issue, Milwaukee is currently capable of going this alone. It’s a chance at a generational catalytic project. An opportunity to fold multiple projects (Wisc. Center expansion, Kilbourn Ave extension, upgrade MacArthur Square garage AND park) into a positive future for the city. Finally, a healthy and growing downtown is an ATM machine for the rest of the city. No one is here to visit 53206 but every visitor to downtown puts a deposit into that neighborhood.
Nice post Jeremy. I would include the BC west wall as well. This is a no brainer.
I hope to goodness that the riverfront/park is not polluted with this monster facility. Of course that is the spot they would want. Why wouldn’t they? Park West is best, and redevelopment should happen where the existing facility or facilities are, Downtown. A Park West location can help revitalize Schlitz Brown Bottle area night life, if oriented correctly, and also help downtown without drowning it out with a large mostly dead space during the day and most evenings.
And please save the Auditorium, a great historic space that needs better marketing and networking for better utilization, as has happened with Turner Hall.
Hahaha WCD’s perfectly succinct response to Water Lily.
Wow. When Wisconsin Conservative Digest and Bruce Murphy agree on something, maybe the center should start listening.
I remember back in the ol’ student government days, the Athletics Department tried to unsuccessfully sell us on paying their structural deficit by raising seg fees (ie student taxes). Their rationale: sports were an investment in the community, and there would be a great benefit to the average student. Also, sports are awesome, they said. Growing debt with no tangible benefit is not awesome, we said.
Have yet to see that department raise any above-cost revenue for the school. Or really win at anything.
The Federal Reserve Bank of Kansas City published an interesting take on this. Some quotes to share:
“Few fields of empirical economic research offer virtual unanimity of findings. Yet, independent work on the economic impact of stadiums and arenas has uniformly found that there is no statistically significant positive correlation between sports facility construction and economic development.”
“The overriding conclusion of this discussion is that the economic case for publicly financed stadiums cannot credibly rest on the benefits to local business, as measured by jobs, income, and investment.”
Their conclusion? If the aim of the new stadium is an increase in economic activity and tax revenue collection, then it’s not worth investing public funds. But if the issue is quality-of-life, they say it’s a different story. They say an argument can be made for using public funds if the aim is improving metro area quality of life.
http://kansascityfed.com/publicat/econrev/PDF/1q01rapp.pdf
They really do have an interesting take. They acknowledge that there are economic benefits to these venues, just not usually as much as is touted. So that shows me it really depends how much the community puts into it that decides whether that alone is worth it.
However, more interestingly, they say sports franchises add what they call “quality of life” benefits to the city that can’t be directly measured. Their conclusion: “Quality-of-life bneefits are rarely explicitly included int he debate on using public funds to attract and retain a major league sports franchise. Acknowledging that the main benefit from hosting a team comes from improved metro-area quality of life should help to value this contribution. Doing so does not require impact studies. Residents and elected officials who understand that the benefits of a sports team are the same sort that flow from parks, zoos, museums, and theater can decide on their own how much hosting a major league team is worth.”
It seems that the consensus is that the economic benefits do not justify the use of public funds. So in this instance, in Milwaukee, is a potential improvement in quality of life benefits reason enough?
I don’t think there is a consensus at all. Especially if we’re talking about using a “jock tax” to fund financing of which the public will see no loss of funds relative to a situation where the bucks leave town. Then clearly there is a net economic benefit.
But to answer your question, yes.
Those two quotes I shared from the Fed report sure indicate a consensus Andy.
Common Ground says the jock tax is a tax increase. “The Legislature and the Joint Finance committee will have to vote on new legislation in order to divert the income from NBA player. If the Republican controlled Joint Finance Committee, Governor Walker, Assemblyman Vos and Senator Fitzgerald go along with this idea, it is nothing more than a Republican tax increase on all tax paying citizens in Wisconsin.”
Regarding quality of life, do you think people’s happiness will decrease if Milwaukee loses the Bucks? I don’t get that impression at all, but maybe I’m wrong.
Great analysis, Bruce! And great comments from others.
The big question the arena issue raises is why do sports venues and the needs/desires of Jock Culture’s uber-rich (who stand to gain the most) trump all else? Milwaukee’s Common Ground coalition is insisting on “Fair Play” for the “ordinary citizens who just want a decent field for kids to play ball or parks that are not crumbling after decades of budget slashing. Milwaukee’s obsession with sports palaces and “princes” has a fairy-tale quality (captured by NYT’s Michael Powell in his recent article about visiting Milwaukee–Bruce recapped it well.) But do MKE’s “leaders” really care about “fair play”?
The Journal Sentinel has two vested interests: selling their HQ for an arena, and also selling newspapers. The sports pages are half of many editions. JS also wants O’Donnell Park, built by and for ALL taxpayers on land owned by taxpayers, to be sold to Northwestern Mutual to extend a corporate enclave at the public’s expense. NM already owns billions just in real estate. They sure know about the real estate adage: Location, location, location. Why settle for the number-two site in downtown Milwaukee when you can get Chris Abele, a billionaire’s son, to offer you a public park for $12.7 million (and it was built for $36 million on land fairly valued at $40 million)?
Only peons might care, once an invisible gate goes up and you have to worry about “trespassing” and “loitering” on NM”s private property. Where are the civic defenders of democratic ideals and equal access to parks? Does anyone remember Charles Whitnall? There’s a park named for him and anyone can still enjoy it for free, for now.
PMD, you are making sense, will have to get sober and read again.
The Bucks do have an economic impact on downtown Milwaukee. It is not even open for debate. All one has to do is walk or drive around downtown Milwaukee when the Bucks or MU are in town. The games bring 15,000 to 19,000 people downtown 55 times a year. We don’t need a study to measure economic impact, especially for a city like Milwaukee. One could argue that Racine would not benefit, and I would agree. The real impact is felt within downtown and the county. No one even argues anymore about whether Miller Park was the right decision. I remeber the same arguments then; we’re not a baseball town we’re a football town, the Brewers are terrible, blah, blah blah. They may have been the worst franchise in sports. The Bucks were incredible for most of the 70s, 80s, and part of the 90s. Lets not be shortsighted. And I’m talking to you people in the metro area, outside of the county. You’ve been absorbing Milwaukees culture for decades and not paying for it. So…. I think you guys need to clam up.
People live in cities for economic reasons as well as unique opportunities and attractions that only cities can provide. Otherwise, what’s the point? We can make the same argument about the Domes, all of our parks, the art museum, museum, etc. These attraction are only possible due to a large number of people living in a goegraphically small area. We can argue all day about this study or that one, but the bottom line is that we have one of thirty NBA teams in the world. Arguably, basketball is second only to soccer in its global appeal and growing – that means something. Marketing and branding are hard to measure.
I for one am happier with pro sports. The last thing we need is one les thing to do in the winter. Finally, we need to look at this specific deal. The private sector is coming to the table with $300 + million. The jock tax revenue will go away without the Bucks so whats really lost? For our conservative friends, look at it this way, we’re merely allowing a private company to keep more of their hard earned dollars to reinvest in their business. Wait….. isn’t that what Walker is doing for all those companies along the Illinois border? I seriously doubt Amazon needed a state subsidy.
Ha hey miracles can happen WCD!
This definitely sounds like a consensus: “No matter what cities or geographical areas are examined, no matter what estimators are used, no matter what model specifications are used, and no matter what variables are used, articles published in peer reviewed economics journals contain almost no evidence that professional sports franchises and facilities have a measurable economic impact on the economy.” (economists Dennis Coates and Brad Humphreys writing for Econ Journal Watch in 2008; econjwatch.org/file_download/222/2008-09-coateshumphreys-com.pdf)
Where are those people coming from David? Are the Bucks the only reason they come downtown? Would they never come to Milwaukee for any other reason?
No PMD…. they wouldn’t come downtown on a Tuesday night in February or a Monday night in January. And maybe its just me, but I would probably be at home. Like I said, the real winner is downtown and the county. The Bucks have more of an impact on Milwaukee than the Knicks have on New York. Do the Packers have an impact on Green Bay? What about the study that determined that Miller Park adds $267 million annually to the region? I believe Andy cited ithat article. What do art museums bring? The Domes? Where do you draw the line? What about the fact that most of the arena costs are privately financed?
Another great report, Bruce. No, the beautiful historic Milwaukee Theatre should not be town down after taxpayers invested millions in restoring it. It’s bigger than most MKE performance venues and the Pabst Theater Group is starting to collaborate with them on programming. Do more of that.
Gary Witt, head of the Pabst Theater Foundation, has been hugely successful in promoting downtown and its economic development through sustained audience building and by caring about what people of all incomes want and can afford. (Some ticket prices in the Pabst-Riverside-Turner venue network are very affordable, as low as $10 or $15.)
UWM has “invested” in downtown Milwaukee by leasing the Panther Arena. There are already numerous institutions and corporations, other than out-of-town NBA folks, working to revive downtown Milwaukee and enhance quality of life here. They deserve some respect and to have their ideas heard. And so do all the taxpayers being asked to foot this bill.
Another great report, Bruce. No, the beautiful historic Milwaukee Theatre should not be town down after taxpayers invested millions in restoring it. It’s bigger than most MKE performance venues and the Pabst Theater Group is starting to collaborate with them on programming. Do more of that.
Gary Witt, head of the Pabst Theater Foundation, has been hugely successful in promoting downtown and its economic development through sustained audience building and by caring about what people of all incomes want and can afford. (Some ticket prices in the Pabst-Riverside-Turner venue network are very affordable, as low as $10 or $15.)
UWM has “invested” in downtown Milwaukee by leasing the Panther Arena. There are already numerous institutions and corporations, other than out-of-town NBA folks, working to revive downtown Milwaukee and enhance quality of life here. They deserve some respect and to have their ideas heard. And so do all the taxpayers being asked to foot this bill.
PMD, the quotes you cite are not actually from that report, they’re cited in the report. No matter, if you read on you see that they say the average DIRECT benefit of an NBA arena at the time of the report was $50 million and the average public money spent on NBA arena’s was $84 million. So on average, it doesn’t pay off. It doesn’t mean all of them do not pay off.
The great thing with the Jock tax is that if the Bucks leave town the state loses $10+ million a year in payroll taxes minimum and the jock tax uses that money to finance the public portion of the arena. This means there is a net zero cost to tax payers. Calling that a tax increase is extremely misleading. That would be like saying if the bucks left town it would be a tax increase. You’re taking money that would not exist otherwise and using it to finance the arena.
I go downtown on weeknights in winter, but not for Bucks games. I can’t imagine I’m the only one.
So in this case Andy, you are all for taxing the rich?
Here’s an anti-jock tax argument. It’s from the Shepherd Express, so please don’t hold that against me. Just curious what you make of their stance.
http://expressmilwaukee.com/article-24487-saving-the-bucks-is-important-but-the-jock-tax-is-not-the-answer.html
“I go downtown on weeknights in winter, but not for Bucks games. I can’t imagine I’m the only one.”
This is a horrible argument PMD. No one is saying that Milwaukee will become a ghost town if the Bucks leave. There are certainly other things. The question is, will the 552,967 people to who came to see the worst season in Bucks’ history still come downtown to spend their $47.64 average ticket price (plus parking, plus concessions, etc.)? ( http://basketball.ballparks.com/NBA/MilwaukeeBucks/ )
It looks like we offered Mercury Marines somewhere in the neighborhood of $123 million to stay in Wisconsin and not relocate. Why is it so much different this time? ( http://wtnnews.com/articles/6781/ )
It’s just an anecdote Kyle. Settle down. David said that without the Bucks no one would go downtown on a weeknight in winter. I’m saying that is just not true.
AHHH! Shepard express! My computer is going to blow up now that I clicked that link!!! j/k
It’s a valid argument, but like Kyle said, tax breaks to keep companies in state are nothing new. It’s interesting, because this is the general argument that the anti-tax crowd uses and now the people on the opposite sides of this argument are reversed.
I agree…. that ship has sailed. There are many different funding mechinisms that state and local municipaliries utilize. This is just one. No different that a tif that diverts property taxes.
Ha. Well, I typically would not cite the Shepherd. And yeah I do feel like people are coming down on the opposite side of where they’d normally fall. For the record I am on the fence about the use of public funds. I used to be all for it, but now I’m not so sure.
The way I read that, David was talking about Bucks ticket holders. You acknowledged that at the time by calling them “those people”. And he’s not wrong. If you would have gone downtown on a Tuesday for a Bucks game, you probably aren’t going downtown on that random Tuesday without the sporting event. Just like if you cancelled Summerfest, the Summerfest grounds probably wouldn’t fill up in late June and early July.
You are really quibbling Kyle.
Anyway, I guess it depends on how many people are attending a Bucks game in winter because they are diehard Bucks fans who would never ever come downtown otherwise, and how many are just attending because it’s something to do in winter. The latter would probably just do something else.
The reason that the billionaire owners and the insanely profitable NBA are pushing for a new arena is so they can squeeze more money out of attendees… who they also want to pay for the arena. They want to fully control food sales, parking, and retail, take over whatever city blocks they want, jack up ticket prices, and squeeze in more skyboxes. This isn’t some secret conspiracy – this is what happens with new NBA arenas. So we are being asked to fund a bunch of rich guys’ massive business venture, only to see our access to the arena become controlled and curtailed by their profit motive. Even more, the NBA is such an inequitable league that there’s almost no way a team like the Bucks can be built into serious championship contenders. I find it hard to believe that a new arena will lead to us celebrating in the streets of downtown with the Bucks as NBA champs.
Yes, I understand that pro sports teams can provide a boost to quality of life in the cities they’re in, but this is something that is difficult to quantify. That’s because the impact they provide to us is negligible – the Bucks are not some incredible presence who provide huge intangible benefits that make Milwaukee amazing – very few in Milwaukee care for the Bucks, they have little draw for people in the rest of Wisconsin, and a lot of people outside of Wisconsin don’t even know they exist. So when ticket prices go up and the number of non-VIP seats goes down, it’s hard to say that the quality of life increases just because we have a small-market NBA team playing downtown in a massive, fancy sportsbox. Professional sports teams are not a true public good, and it is deceptive to act like they should be funded as one.
And who’s to say that the Bucks won’t threaten to leave in another thirty years? We need cities to stand up to the millionaires who want to siphon public funds for their own gain, without providing anything in return to the public except for “revitalization” and “economic growth”. Are we so desperate for economic growth that we will kowtow to billionaire investors just to have it? So if they build it with our money, there needs to be stipulations attached – part ownership, a commitment to stay in Milwaukee for decades to come, a limit on the number of VIP seats, and a negotiation over the site of the arena that isn’t just manna for billionaires who have no real love for Milwaukee aside from making money off it.
Here’s an article really worth reading: https://www.jacobinmag.com/2014/10/fanfare-without-the-fans/
I take the point that the economic benefits of a new stadium generally do not warrant public subsidy. But I think there is less quantifiable reason for doing it anyway. The fact is, Milwaukee is in competition with other communities for new businesses and for young, talented employees. If you were a college educated 20-something, and had an offer from Harley or NML or JC, would not the existence of a pro sports franchise figure in your decision? It would for me. It would not be determinative of course, but it would matter. What if you had two offers, one from Columbus and one from Milwaukee, and you were a sports fan? Would the existence of the Bucks and the Brewers, and their two new facilities, not impact your decision regarding which job to take? I seriously doubt that it would not. Hard to quantify, of course, but that does not mean it is a non factor.
Chris, that’s such a bizarre and misleading hypothetical. In a down economy where many new college graduates cannot find career employment, I don’t see any way that having the Bucks will significantly impact the number of or quality of employees at NML, Harley, JC, or wherever. Few if any would base their decision on an NBA franchise over pay and career advancement – which seems counter to the idea that these people are incredible, devoted employees if this is their determining factor – but if someone were to pass up the job due to this, then those jobs will be filled by someone else, not necessarily a sports nut. And subsidizing that dubious marginal benefit with hundreds of millions of dollars tax dollars is just silly. If you absolutely have to use these public funds and want to attract smart employees, then subsidize the actual business that will hire them. But you can’t just make up strange hypothetical situations, provide your own anecdotal evidence, proclaim them “hard to quantify”, and use them to justify a massive subsidy to the mega-rich. Here’s a counter-hypothetical: “If we lose the Bucks to Columbus, how many people will choose Milwaukee because they hate the basketball, or the way that the NBA bullies the public into funding their new arenas? Hard to quantify, of course, but that does not mean it is a non factor.”
People need to stop believing there are just these incredible, unquantifiable benefits floating in the air due to the Bucks being in Milwaukee with a new sports arena.
Tom, it seems just as misleading to assume that pay and career are the only determining factors when weighing options. At some point, people will decide whether they want to live and work in Milwaukee or not. There are some great employers here, but there are great employers in lots of places. Do I think the Bucks have a large impact on that? No. But it’s part of a broader picture of what Milwaukee is. This is the same logic used for the streetcar, the parks, and a host of other projects.
However, I agree with you that it doesn’t make sense to build the case of this on unquantifiable benefits that not everyone values. What we do know is that the NBA has threatened to leave, and they have a viable new home in Seattle (based on their previous attempts to secure a new team). If the Bucks leave, we’ll lose the income tax from the players and coaches, the $10 millioin the jock-tax likes to cite. We’ll also lose property value/tax from their homes and sales tax from any money they spend. Even if we assume that every single patron of the Bucks will still come to Milwaukee and spend the same amount, we’re still losing more to let the Bucks go than to authorize the jock-tax. This isn’t new logic. It’s been used to keep other major employers in state, such as Mercury Marine.
What have been the economic consequences of other cities losing a professional sports team? What happened when Seattle lost the Supersonics? Or when Hartford lost the Whalers? There clearly have been a lot of studies of the economic benefits (or lack thereof) of public funds and new arenas/stadiums. Have there been any studies of the economic impact of a city losing a professional sports team?
PMD, there have been such studies, including one that looked at impact of MIlwaukee losing the old Braves baseball team. Conclusion: no economic impact.
Interesting. Thanks Bruce.
Tom, Really? No impact? Do you want to do a survey of how many employers take potential hires to a Brewers game when they bring them into town? Do you think that the employers think they are not in competition with other communities? Do you think they don’t talk about Summerfest? Or the Zoo, or any other amenity when they bring in the folks that they really, really want? Do you think couples don’t talk about things like that when they are deciding whether to move or stay put? Seriously? And do you seriously think that there people who are saying: I want to go to MKE! They had the guts to stand up to the billionaires! Please. Cities are in competition with each other. For conventions, for tourism, for entrepreneurs and for top-level talent. A new arena would improve Milwaukee’s ability to compete for all of these. And, just as assuredly, if we were the city that just lost an NBA franchise, it would undermine that ability. Would that be enough to offset public costs? Well it depends on how much and what kind of costs. But Milwaukee as a community needs to understand that this competition is going on whether we like it or not, and if we are not willing to make the right, prudent investments, we will continue to lose.
I know one thing for sure….. Oklahoma City has never recieved so much national press. Before the Thunder we never heard anything about OKC unless it was leveled by a tornado. I think we can agree that an NBA franchise has elevated that town. I’m not going to look for studies but I’m sure some of you will.
Even if the net financial impact on the region is negligible, the impact on downtown is not. I live in the city, the Bucks and MU add much to the vitality and energy of downtown. I believe a strong and vibrant downtown helps the region.
It’s funny, I’ve never seen the left far left and far right agree so much on a subject. Thank god for those of us in the middle.
Chris, of course people talk about lifestyle aspects of a community when they’re deciding whether to move here. And of course employers take prospective employees to sports events, and concerts, and out to dinner. They want to show them a good time. I work in a place that does just that, and could give you a laundry list of “how to entertain sought-after professionals.”
A basketball team is just one thing on the list. If you want to talk about enhancing the lifestyle of the community, fine — let’s have that conversation. But let’s have it clearly, and put the arena in the context of all the other things that are important to families and young professionals (not necessarily mutually exclusive categories), like well-kept streets, affordable housing, good schools, reliable jobs that pay a decent wage, and an interesting and diverse community that makes for vibrant city life.
DSM–I couldn’t agree more. Well, mostly. I do not agree that a basketball team is just one item on this list. Ours is a sports obsessed society, so any professional sports team matters more. But absolutely, a competitive city would not allow our parks and schools and infrastructure to deteriorate. And if I thought it would fly, I would be fully supportive of a plan that included funding for these other quality of life issues. My frustration is that too often Milwaukee will not think beyond its nose. I don’t understand the thinking that says I would rather keep 20 dollars a year in my pocket than make my community a more dynamic, interesting, exciting place to live.
A University of Kentucky study published this year studied the economic impact of losing a professional sports team. They concluded there is no negative economic consequence of losing a pro sports team.
“If franchises generally created a positive effect on the area, then their removal would coincide with an observed negative impact on the city in terms of per capita income or unemployment. This is not the case as the analysis reveals no statistically significant effects caused by the relocation.”
http://uknowledge.uky.edu/cgi/viewcontent.cgi?article=1024&context=mpampp_etds
Kyle: No, that isn’t new logic. It’s just deceptive and short-sighted. I understand that the Bucks play a role in making Milwaukee great. But don’t for a second think that this is some zero-sum game. The situation doesn’t start and end at “either we don’t pay and they leave” or “we find a way to give them all the tax dollars so they stay.” You seem to recognize that the Bucks asking for our public dollars is bad – we are being held for ransom by the NBA – but you accept their solution as the only viable path. Can you conceive of a situation where we give the Bucks less money and they stay? Where we get to keep some or all of the “jock tax” revenue for other, more important public services and still have the Bucks? Where we get other concessions in the building of the arena? This is why the arena seems like such a scheme – it’s either we put up the money, or we lose. That kind of thinking is what makes it so easy for massive, wealthy businesses to raid the public coffers.
Obviously, the solution to this goes beyond negotiating with the Bucks. But if we don’t start to draw a line in the sand, then what does that say about our city, state, and society? What’s to stop every big business from threatening to leave – taking the jobs, and economic impact they provide with them – unless they get a huge handout from the public? A high-profile dispute with the NBA can change the bargaining power in these negotiations and change the national discourse over how big businesses such as the NBA abuse the cities that they supposedly provide so much for. When a big business receives public money by threatening to leave otherwise, do you really believe this is an unconditional win for citizens? How much money do we have to forfeit until you see it as a loss? And can you really tell me that the Bucks just can’t be profitable unless we give their billionaire owners our money?
Of course, you would need solidarity from other cities and states to put their foot down as well – that’s a much bigger hurdle- but don’t think that giving away much-needed public tax revenue to fund a new arena is anything but a big loss wrapped up as a small victory. It’s amazing how easily people will acquiesce to the NBA and other businesses just to keep them, making this practice acceptable. I wonder if the people of Wisconsin will do the same in thirty years when the Bucks so desperately need another new new arena or when Miller Park doesn’t have enough skyboxes.
Bruce, that answer over simplifies the situation.
Regardless, for me it’s about the non-economic benefits. David’s post above sums it up well and Chris’ before that as well. My company hosts events at Miller park during their recruiting efforts for top talent from across the country (among some other notable Milwaukee locations). It’s a key part of their recruiting effort to convince potential employees that Milwaukee is a great place to live.
Chris: Sorry, I know that sarcasm is difficult to detect on the internet. Of course I don’t think that people will choose to work in MKE because we stood up the Bucks, just as how I don’t think your scenario at all justifies us spending so much subsidizing a massive business. I was pointing out how useless conjecture is. I even provided a little rebuttal to your conjecture, that there’s so many people clamoring for jobs, it doesn’t matter if they are schmoozed by potential employers at a Bucks game.
But anyways, why stop at just your one hypothetical? Let’s just say that the Bucks provide ONE BILLION dollars of unquantifiable benefit to the city. They will attract so many top-notch employees who love basketball, they will sell so many bobbleheads and T-shirts, revitalize downtown so much, and also increase the quality of life so drastically in ways I can’t describe that we should be willing to pay $999,999,999 to keep them! This is by definition a prudent investment, because we come out $1 ahead!
To all the doubters: don’t ask me how I came up that this $999,999,999 figure. Don’t worry about any costs to the taxpayers beyond the $999,999,999 that I’m directly forking over to the Bucks. Don’t even think that people would spend their money elsewhere in Milwaukee if we didn’t have the Bucks. Don’t worry about our government taking on debt. Just know that they are a vital part of Milwaukee, and we have to understand that $999,999,999 is the price of competition, no matter how we come up with it. This is the harsh reality of life, and we can do nothing but play the game.
Andy, what is better for a city, telling them that we just lowered our crime rate and made MPS one of best system in country or the Bucks?
PMD, I know you think I quibble and nitpick, but calling that “study” “published” implies a whole lot of things it is not. It’s not a study, it’s a capstone project. And it was only published in the university document that publishes every single capstone project, regardless of accuracy (beyond written well enough to pass).
Tom, I do recognize that sports teams hold cities hostage and can bully local leaders into bad deals. Everything the Miami Marlins have done under their current ownership comes to mind. But we aren’t to the point where we’re talking about lease options, revenue streams, return on investment, etc. They’re looking for possible locations and figuring out what they’re willing to commit. We need to look at alternative locations and what we’re willing to commit. Maybe as a city and a state we’re willing to commit absolutely nothing. Maybe we’re willing to do a local sales tax, a super TIF, or a jock-tax. But it’s pointless to negotiate the specifics of a deal if you have no idea what you’re working with. Just because we find the political will to offer some funds doesn’t mean we just hand every penny over, it means we get to have the next conversation. And if we don’t have the next conversation, I don’t think you’ll get to keep the Bucks by calling the NBA’s bluff about the Bradley Center. Then we can witness first-hand all the benefits of no statistically significant net impact.
WCD, even better… how about we tell everyone who wants to live in the city that we’ll give them a big pile of gold? Obviously the pile of gold or national leading education is better… but you’re not going to get either of those for a cost of $10 million a year.
WCD, if you have a plan to lower the crime rate AND make MPS one of the best school systems in the country for a one-time investment of $150 million, I would love to see it. And, if it makes any sense (and you used spell check), I’ll work to raise the money needed to implement it.
I do think that Kyle. Feel free to share something that argues otherwise. I’m more than willing to read it.
Kyle, I have given Bruce Murphy and this site Glen Frankovis’s program to do just that. I have featured it on my Facebook site several times and in my newspaper. Glenn was captain in the worst precincts in Milwaukee.
In 1974 I put together plan for Bill Dyke, for governor, to bust up MPS into 18 different systems. Give control to neighborhoods and parents, not huge jerky bunch of administrators. I have also worked with top brains in country, that is “My Dream”. Start at bottom, not try to fix whole damn place which is impossible with the administration that they have. Teach kids to read. It can be done. have had the pleasure of being pharmacist in inner city many days the last 20 years plus owning property. Black kids are not stupid, the system has screwed them badly, created by the Left.
Start on your basics, make sure all kids can read by third grade end. My wife taught third grade. Then go from there. The finest headline I would like, not the Bucks win NBA but that 90% of third graders can read proficiently and that we have followed lead of NY and made this one of safest cities in world of our size. It is not 150 million but will be 250 million by end.
Tom, we understand what you are saying. It is not lost on me that the owners are rich, the players are rich and the NBA is rich, so why subsidize the arena? It sets a bad precedent – I get it. I think supporters of this plan exaggerate the financial benefits of pro sports and critics under value their fanancial impact and importance. Largly because quality of life is not a metric. It does have a value. If the Bucks leave town, Milwaukee won’t dry up and blow away. However, there will be a net loss…. there has to be. Just as if the Pack left Green Bay or if we were to lose the Brewers. At what point is there a financial loss? Death by a thousand lashes. I’m sure the truth is somewhere in the middle.
However, I do believe we take our amenities in this city for granted. We punch hard for a city our size. We have a lot to offer and our quality of, for many, is great.
Let another city prove a point. I believe we’re moving in the right direction. I can appreciate your analogy of don’t ask any questions, its worth $1,000,000,000 and you have to play the game and so on. But that is not what’s happening here. Again, the majority of the costs will be financed privately. I think that is important to remember. Again, I ask the question, how is this different than the NML deal, The Corners project, Amazon, TIF crazy Shorewood, or the state throwing money at all sorts of manufacturing companies that won’t be around in five years? I’m not justifying the use of these finacing tools, I’m just illustrating the fact that outrage has less to do with the subsidy and more to do with rich guys from NYC and over paid basketball players. As well as the fact that people either love the NBA or hate it.
It isn’t 10 million per year it is 250 million, all together. so you clowns that are unable to prioritize, go down to the Core and tell the kids that we are sorry but we spent our money on a bunch of dribblers instead of on you kids. good Luck. Glad I am not one of your kids.
I had those CHOICES. I had five kids. Where did I spend my money, on the kids or new Cadillacs. I spent it on the kids, three of whom are now Special Forces, one helicopter pilot, One Olympic Silver Medalist, One docotor and one very successful business woman in the Hamptons. Who was right?
Kyle, stuff your splelcheck. iget 500 or so emails/Facebook daily for this paper from around state. These days text language is the way we talk.
Kyle: So I think we’re in agreement about some of this? But I can’t really make sense of what you have written – are you saying we should just stop talking about the arena until a certain level of detail is revealed? What is the acceptable level? What is the next conversation? Because what we’re talking about, even on a much more general level, will impact the specifics of the deal, and just because formal negotiations haven’t taken place or been revealed to the public doesn’t mean we shouldn’t talk about the deal, lest it be too late. Already the discourse is centered around “how much will we give to the NBA” and I believe that is exactly what is being debated here. I also don’t think that calling the NBA’s bluff will keep the Bucks. In fact, I think it will cost us the Bucks.
Just to reiterate… a sports franchise alone does not create a statistically significant impact on a metro area in terms of economic benefits. For example, the annual $200+ million that the brewers bring in from outside the area probably is not enough to show a impact on the metro GDP, nor it’s affects on wages or taxes. (although it’d be interesting to find out for sure) But that doesn’t mean there is no economic impact. The question that continually is looked at in these studies is whether the public investment is worth the economic impact. Usually, but not always, that’s the case. But like many other amenities for a community, there are other non economic benefits that may outweigh the public investment… especially when the public investment comes from dollars that would otherwise disappear.
If we strictly talk direct economic benefits we might as well sell all the parks after we’re done with the O’Donnel parking garage.
David: We’re discussing the basketball arena, so that’s why this is why I’m using it as an example. I am also not happy about those things – I am not just mad about the Bucks arena, I am using it as an example because this is literally an article about the Bucks arena.. Also, yes, there will be private funding. There will be private funding. Too much private funding.
The Bucks leaving would be a loss, of course, and I’m not saying there can’t be a way we get screwed less by giving them less money to stay. But it’s still a loss no matter how you slice it.
David, once again, well said.
WCD…. I thought you supported the Miller Park tax? That is a lot more than we’re discussing here.
Bob, I couldn’t care less how you type here. It’s just going to be hard to raise that kind of capital. Investors are rarely ahppy if a documnet dosent’ us splelchek. I prefer to be taken seriously, but that’s just me. When I have more time to properly look into it, I’ll take a look at the 40 year old plan you mentioned. Hopefully your costs have been updated to 2014 dollars, otherwise I think you’ll make the trolly cost overruns look tame.
Also, while I’m glad you spent more money on your kids than your car, I’m sure there were things in your budget that seemed like unnecessary recreational expenses. Like skating lessons.
Tom, for the sake of discussion, let’s break the arena discussion into two major categories: Conditions on the money, and Amount/Source of the money. If we play hardball negotiations now over conditions, then fail to deliver on the amount agreed to, I don’t think we’ll keep the Bucks. That’s why I think that we need to figure out what (if anything) we’re willing to pay to keep them here. I’ve gathered you have no patience for giving even a single penny of public money to them. That’s a valid point. Since we only lose by paying them, what do you think we gain by losing them?
Kyle, I don’t think we win in either scenario, even if the NBA agrees to receive a lot less than the full package they ask for. You are right that I do not believe a large public subsidy should go to the Bucks – we can help them with zoning, publicity, etc., but giving them money in addition to these accommodations is just gratuitous. However, we obviously lose more if we don’t keep them, even at a high price. I’m sure my $1 billion example would obviously be disagreed to by many, but I’m just trying to establish that there has to be a point when people think the deal is just outrageous. So narrowing our focus to just the Milwaukee arena, I do believe we lose more if we do not keep the Bucks. I will freely admit this.
However, doing so further normalizes the idea that cities and states should pay businesses – even very, very profitable ones – to stay, whether through special funding or by slashing taxes for businesses. As I was saying, this is a problem that goes beyond the Bucks arena. I know that on a micro level of just Milwaukee, our biggest incentive is to play the game and pay the Bucks, because we alone cannot challenge and change the kind of ransom the NBA is holding us to.
A much larger movement would have to be made to stop the NBA from doing this. So if we’re going to look at the grand scheme of things, then I believe your question is a false dichotomy, and I don’t necessarily have to choose one of your choices. Instead of “what do you think we gain by losing them?” it could instead be “What kind of change would have to take place for Milwaukee to keep the Bucks, have them build a new arena, and not have to contribute untold millions of tax dollars?” To which you could probably argue that it is impossible to change the system, although I’d disagree. But I won’t go on about that, because it’s taking too long to type responses and I think most people have tacitly assumed that the things can’t be changed and that we will just have to pay the Bucks in order to keep them.
No one has asked the central question??? Will they move if they have to stay in remodeled Bradley Center? From what I research, the NBA does not automatically move the franchise if we do not donate them 250 million or so. The Bradley has been just fine, NCAA has and will play here in 2017, not perfect but not many perfect things in Milwaukee anyway. will these guys give up that toy and take the 25 mil and run?
I do not think so. This is really big toy to these guys who are not exactly household words anywhere. I have seen this many time where guys have made a lot of money become quite successful but no on ever heard of them. They probably were never sports athletes in high school, or college, or any big time players anyplace. Rich? A lot of big game hunters that I have met around world are in that category. They can make fortune in Bradley center cause money is from TV. Google NBA TV and you will find out.
Finally families and cities have to set priorities. A streetcar and Arena are way down my list of priorities: Crime, MPS, heroin, corruption, abandoned houses, human trafficking, poverty, 57% youth unemployment, loss pf businesses to out counties, High taxes managmetn of city. Fix these and you will have great place to live.
Kyle, I was in the building/real estate business for years. You guys are the guys I loved to negotiate with, you were scared to death you would lose a deal, that is what is happening here. everyone is running scared from these hustlers and they will take the money and run. They have the PR ability of jeffrey Dahmer.
You should always be ready to walk away from a deal.
I never said that these guys intent to just let the NBA buy the Bucks from them and pocket the $25 million difference. However, it would be in the NBA’s best interest to do so.
http://www.businessinsider.com/nba-owners-milwaukee-bucks-move-seattle-2014-10
A team in Seattle is worth more than a team in Milwaukee. If the NBA has the right to buy the team back and flip it for a huge profit, why do you think they wouldn’t? We can spend time trying to call their bluff, but if there isn’t a new arena I highly doubt the Bucks will stay. I’m willing to debate that as the least objectionable option, but not that the NBA will turn down the money just because a TV deal (which again, would probably be less valuable in Milwaukee than Seattle).
So, okay. We don’t want to pay $150 million for a new playground for millionaires, and the Bucks leave. Glad that’s over. But wait…
http://www.bizjournals.com/milwaukee/news/2014/04/17/bmo-harris-bradley-center-will-need-100m-over-next.html?page=all
So… we lose the Bucks, and we still have to shell out 9 figures? At least we’ll still have our TVs…
Andy, the difference is that municipal and state entities – which are democratically controlled and funded by citizens – own the parks and don’t charge admission to use them, while the Bucks are a privately-owned, for-profit business that charge for attendance. I do not believe that the Bucks or other sports teams, especially when for-profit, privately owned, and requiring admission fees, should be treated as a true public good.
The argument you apply about the non-economic benefits of the Bucks could apply just as well to any other businesses. Here’s an example I thought of in all of 5 seconds: 2 Sweet Hookah Bar. Let’s say I own it and I want to receive $75,000 in public funds to help me buy new leather seats and HD TVs (I will kick in $150,000, so there is definitely private funding!), or else I’ll move to Columbus, which is clamoring for a hookah bar. My hookah bar has many non-economic benefits that outweigh the public investment (I am neglecting to tell you what they are, however, because they are hard to quantify) and draws in many people from outside the area, because they do not have a hookah bar where they live. 2 Sweet’s total effects on the metro area’s GDP are “hard to measure” but I assure you, are significant enough that the investment is worth it. If I leave, there will be no hookah bar to take my place, because a law was passed that constrains the market (in my favor), and prevents the establishment of new hookah bars in Wisconsin. If I refurbish, I’m sure a couple stores will move in near me because of the new business I attract. 2 Sweet improves the quality of life for people in Milwaukee. Therefore, 2 Sweet should receive public funding.
@WCD Part of the NBA signing off on the deal for the new owners to buy the Bucks was that if there was no arena by 2017 [I think that was the year], then the league itself can buy the team back. Why do this? So they can shop it to the highest bidder which would then move the team. For or against a new arena this is pretty clear.
You think I’m not willing to walk away from this? Based on what? I’ve always had fun negotiating with people who think you’re scared to lose a deal. You should see what happens to military recruiters when you stand up, shake their hand, and walk out. Amazing how the opportunities just open up. I’m perfectly open to letting the Bucks go, just as I’m open to paying for them to stay. I’d just rather make the choice proactively. Maybe you think figuring out your budget is bad, but it’s served me pretty well so far.
Tom, in 2013, the city of Milwaukee alone was maintaining 45 different TIDs. If I go through the applications for all of those, I’ll probably find one that is disturbingly similar to your 2 Sweets scenario.
http://city.milwaukee.gov/ImageLibrary/Groups/cityDCD/business/TIF/pdfs/2014Map-TaxIncrementalDistrict.pdf
Maybe Milwaukee is just has to try harder because the state makes everything harder on them…
http://www.revenue.wi.gov/slf/tif/tid100wi.pdf
Wow, that’s a lot of public financing. And it doesn’t include the big things, like sales taxes for Miller Park or Lambeau Field. If you’d provided contact information, you would probably already have your money to improve 2 Sweets.
That is the question I have not been able to find out. Can the NBA buy it back if the owners do not want to sell it back?
@WCD Yes.
Anyways, I gotta bow out. I really do enjoy the level of discourse here though, even if I don’t agree with some people on certain things, this is definitely much better than the Journal Sentinel and whatnot. I can tell people really do care to hash things out over important topics like this. So thanks for that, all of you, sorry if I came off like a jerk at any point. See you in the next article!
One of the funny things I see in this debate is people saying that 15,000 to 20,000 people are coming to the Bucks games. I get that the Bucks are announcing those attendances and I get that the good folks at the Journal and Business Journal will simply repeat that, but I’ve been to 3 weeknight games so far this year. If there were anymore than 10,000 people at these games I’d be shocked. At the Knicks game the upper deck had entire sections with nary a soul sitting in the seats.
I don’t want the Bucks to leave as I like basketball and go to games. That said, it’s a discretionary entertainment option. If they left I’d probably go to more UWM games or MU games. I’m not sure the overall economy would suffer all that much as people would find something else to spend their money on.
The other issue on a new arena is the reason this is really being done is for the Bucks to capture more revenue by offering all sorts of amenities inside their arena. The dollars that are currently being spent on Water and 3rd Street would shift somewhat and I wonder if it would actually serve to close some of those businesses.
What a great debate! I agree that those pushing for a new arena with taxpayer money, even if it’s a bad deal for taxpayers, may feel like we’re over a barrel. The fear-mongering seems to be working on several fronts. Heck, elected officials are still frightened that NML will pull up roots here if we don’t give them a lakefront park on top of $73 million in tax credits, even though they’ve already broken ground on their HQ. (Or that NML will build their own parking facility and out-compete the County’s O’Donnell operation, as NM CEO has warned. Aren’t they including any parking in that $500 million campus already?)
I’m all for encouraging economic development, but a healthy economy needs lots of businesses of varying scales. And masses of people with enough money to support those businesses. Even the Fed chair is alarmed about income inequality in our new Gilded Age.
There are two distinct issues here: what are the economic implications of public subsidy of a sports team and what happens to the area around it. Dead space during the day downtown is the worst thing you can do, especially large scale. Housing all the way around it, commercial retail on first floors…. good luck on the commercial retail. But, human scale street level, good urban design with public spaces, gardens, etc is possible. It tends not to happen, however. The Convention Center is a good attempt at doing something human scale along the edges, but how many people walk down the street to the next block unless they have to, or unless there is an event they are going to at the Convention Center? Dead space. Bradley Center dead space, Courthouse dead space, Park East…. best spot to bring people downtown and really design around the B-ball facility at a human scale that links to surrounding planned developments.
Interesting Donna
, good!
As a planner, I too, appreciate the discussion. I think we need to start with the premise of keeping the Bucks, not giving up riverfront or existing public institutions or parks, and having them foot the bill of a large comprehensive plan on Park West, including redevelopment of the existing Bradley Center / Arena properties, as residential, mixed use surrounding the “Arena”. Make it a true community planning effort, and marry it with an increase in sales tax which includes 1/2 % for this and 1/2% for MPS, funded by the state and the region. I agree with Mr. Conservative about priorities, but priorities can be paired. The biggest issue Milwaukee has is segregation… we need a serious volunteer tutoring/mentoring program for each MPS student, with a lifelong commitment through college years. Then the white suburban community will see how bright and brilliant these kids are/can be, and opportunities MAY follow, with connections for educational support and jobs. No child left behind has been made into a program, but should be a regional philosophy with deep devotion and funding. Funding through college for those who qualify… Kohl, Selig, sports players in partnership for scholarships guaranteed to MPS and other kids based on economic need and excellence, like Flint, Michigan has done.
Negotiations should be about location and plan, not whether the Bucks stay. That is negotiating in good faith.
@Virginia Small The fear isn’t that NM will move from downtown, anymore (that was a very real possibility before they struck the tower deal), the fear is that they will tear down parts of East Town to build parking garages when there is a viable option right across the street from them. And no NM isn’t building any parking in that tower. But understand that NM has already bought multiple properties in East Town and have shown their hand when they demolished a building in East Town and put in surface parking. As an East Town resident I do not want to see another block of structure parking built, as these wreck the vitality of a street, and in turn the neighborhood. And just a point of clarification the $73 million TIF (not tax credits) wasn’t all for NM, much of it was for public infrastructure.
Most of what Brice says is right, I have expanded on it but my final point is: UWM is really important to this community, I follow them and root for them. They have a home. why would we screw them for these guys??
This is the most intelligent discussion of this issue I have ever seen.
Seg is fact cause the White, Liberal, Racist keep it that way. They toss free telephones, food stamps at the inner city but no jobs or education then cry cause there is segregation. New laws are useless in this battle, only education and jobs will fix it. Stop all the whining from the Racists apologists and challenge them. Black/Hispanic kids are not stupid, have worked with them for 40 years. They manage to live off the street when they cannot get jobs, so they are not dumb. They teach kids to read in Africa, Bangladesh ,why not Milwaukee? All you hear is excuses form those in charge whike thy worry about street cars.
WCD, are you trying to prove Urban Dweller wrong? Do you think this helps your cause at all?
I point out all of the facts that I can find so people can make good decisions.
The Bucks are the 4th worst in attendance for 2014-2015 @ 14,000 average. Thats pathetic. No musician cares where they perform as long as they are getting paid well themselves. We got people that are so rich that they could build a new arena for every NBA team all by themselves. After all this is the usa where a sex tape makes you incredibly rich.