Bruce Murphy
Murphy’s Law

The Secret Tax Subsidy Society

Republicans and Democrats conspire to create stealth taxes to fund the NBA arena. Will they succeed?

By - Apr 14th, 2015 12:19 pm
Arena Rendering.

Arena Rendering.

Don’t tax you.
Don’t tax me.
Tax that fellow behind the tree.

-Old political adage.

Back in the mid-1990s, when politicians were scrambling for ways to finance a new stadium for the Milwaukee Brewers, Mayor John Norquist jumped on an obscure fee on petroleum in fuel storage facilities, proposing a two-cent-per-gallon increase in the tax to fund the stadium. He delighted in the idea, calling it “the ultimate tax the feller behind the tree tax.”

But Gov. Tommy Thompson loved it, too, and quickly grabbed it to beef up the state transportation budget. Yes, it was a cinch the petroleum companies would find a way to pass the costs onto the pump price for gas, but who would be the wiser? Thompson’s transportation secretary called the proposed fee “not a tax.”

It would have been smarter for Thompson to use that stealth tax for the Brewers. Instead the legislature passed a highly-visible, five county-sales tax (which the counties did not even get to vote on) and an outraged electorate recalled Racine-area Republican state Sen. George Petak from office.

Lesson learned. If you want to hand out subsidies to millionaire ballplayers and owners, you better find a stealth tax, something the voters can’t really see or feel. That goes double if the plutocrats in question, Bucks owners Marc Lasry, Wes Edens and Jamie Dinan, are among the wealthiest people on the planet. As Edens recently admitted, that “complicates the narrative,” an oh-so-delicate way of describing his demand that average and even poor folks donate taxes to line of the pockets of the filthy rich.

It was Rep. Dale Kooyenga (R-Brookfield) who came up with the idea of grabbing the state income taxes paid by NBA players, which was pretty creative, but Gov. Scott Walker did that one better, saying his proposed $220 million state handout would come from the increase in income taxes paid by ballplayers as a result of the lucrative new TV contract that the NBA signed. State Democratic legislators tell me this refinement was actually Mayor Tom Barrett’s idea (his spokesperson Jodie Tabak denies this, sort of, saying “I’m sure others had the idea as well.”).

Whoever had the neat idea, it’s been portrayed as not really a tax because this revenue would have been lost if the Bucks moved out of state. But you could make the same argument about any company that threatens to move out of state if it doesn’t get a subsidy. The only difference is the obscene size of the Bucks subsidy, which is likely to exceed $800 million when all the finagling is finished.

That still left the city and county searching for stealth taxes to underwrite their contribution. Barrett has repeatedly said no property taxes will go to the Bucks, but as with the state funding, it’s all semantics, the entire city contribution will eventually flow from property taxes. The mayor has promised to spend $17 million on infrastructure in and around the proposed new arena site; give the Bucks the city-owned parking ramp at N. 4th St. and W. Highland Ave., valued at $7.4 million (which generates a tidy $400,000 annually in net revenue); and a $1.1 million city-owned parcel once occupied by the Sydney Hih building in the Park East corridor, as the Milwaukee Journal has reported.

As for the county it has yet to come forward with its contribution, though the Journal Sentinel has reported that County Executive Chris Abele may try to get his hands on the Wisconsin Center District tax, which includes a car rental and hotel tax. Right now, Abele is running last in the stealth tax game, but he’s still relatively new to politics.

Meanwhile, there are all kind of subsidies the Bucks will gain that have gotten little or no discussion:

-The $220 million state contribution will probably be paid in bonds repaid over many years whose interest will drive that cost up to a total of $380 million. (If the state lowers the proposed contribution, as some Republican legislators are demanding, the city and county will be pushed to make up the difference.)

-The biggest stealth tax: the arena and land will be exempt from state taxes which adds a cost to taxpayers of as much as $450 million, as I’ve reported.  If the city and county opposed making the arena a nonprofit, that huge added cost would kill the project.

-The state bonds will be exempt from federal taxes, which means money lost to the federal treasury. The lost taxes for Miller Park from $160 million in state bonds was $68 million, I’ve estimated; the price tag here could be as high.

-The state bonds will also be exempt from state taxes, which wouldn’t be the case for a private company buying bonds.

-Because the new arena will be classed as a non-profit, all the materials purchased to build it will be exempt from the state sales tax. (The sales tax would be higher in this metro area, by the way, because it includes the portion that still goes to paying for Miller Park and its continuing maintenance and improvements.)

-While it hasn’t been discussed, the Bucks will probably be given several tracts of land that were purchased by the non-profit Bradley Center, which has been buying up land around the Bradley Center, even as it got a $10 million subsidy from the state.

-To make room for the new arena, the Bradley Center (still working fine as a venue for the Marquette Golden Eagles, Milwaukee Admirals and concerts) will be torn down, at a cost of at least $5 million.

-We still don’t know who will pay for maintenance of the new arena. That’s cost at least $115 million for Miller Park.

Herb Kohl‘s $100 contribution to the for-profit Bucks, because it is being laundered through the Greater Milwaukee Foundation, will cost federal taxpayers a minimum of $20 million, as I’ve reported.

All told, it’s quite possible the total cost to taxpayers for the arena will be in excess of $850 million. If the situation is comparable to what happened with Miller Park, there will be still more secret subsidies added to the list.

Meanwhile, while the Bucks owners have promised to build $500 million worth of ancillary development, they aren’t signing any contract to do so. And we’ve yet to learn whether any of this will occur on land they are simply given, and how much the city will spend on Tax Incremental Financing to make it happen. Billionaire sports owners, as American taxpayers have learned, always have their hands out.

The state plan has been so cleverly conceived that it appears taxpayers aren’t angry about it. Which leads me to believe the plan will be passed, though perhaps at a lower level of funding than the plan Walker proposed. And as the details get ironed out, and the politicians grease the wheels with various other subsidies, don’t expect them to provide much detail. The example of the Petak is a warning to all — Republicans and Democrats, state, county and city officials — not to let the taxpayers know the full story.

Arena Renderings

79 thoughts on “Murphy’s Law: The Secret Tax Subsidy Society”

  1. PMD says:

    The JS recently wrote about the difficulties that remain here in getting everyone on board, including the public, Legislature, the County, and the City. I still believe the owners could be secretly hoping to move the team, maybe to Seattle.

  2. Rich says:

    if the state lowers the proposed contribution, as some Republican legislators are demanding, the city and county will have to make up the difference

    Why is that being reported as fact? The difference should come from Lasry and Edens.

  3. Bruce Murphy says:

    Rich, good point, I just revised that sentence.

  4. Jerad says:

    “-Herb Kohl‘s $100 contribution to the for-profit Bucks, because it is being laundered through the Greater Milwaukee Foundation, will cost federal taxpayers a minimum of $20 million, as I’ve reported.”

    To me this seems a bit misrepresented. This cost is the burden of the state. While the state is funded by taxpayers, is there a specific tax increase that will put the burden on citizens, or will there just be a $20 million hole in the state’s revenue?

    Also, if we don’t receive the “gift” from Kohl, that $100 million is just a hole that would have to be filled by the owner’s or additional sources from state or locals governments, no?

  5. bruce murphy says:

    Jerad, yes, the $100 million from Kohl would have to be replaced by someone. But it does get him a $20 million tax exemption, which is an additional cost to (federal) taxpayers. Pro sports teams over time have managed to get all three levels of government, federal, state and local, contributing to their businesses.

  6. Jordan Baer says:

    Great article Bruce. I hope your next article shows how much the difference would be with a simple renovation to the Bradley Center. I feel like its costs are being greatly exaggerated to justify this new facility that seems to me to already be inferior. And why not sell the BC to Marquette for $1?

  7. AG says:

    Bruce, you’re so quick to dismiss the argument that if the bucks leave the money won’t be there anyway. Fact is, any tax rate on zero dollars is still zero dollars. Most of your “costs,” or what you consider a tax, fall under that category.

  8. Wisconsin Conservative Digest says:

    Bruce, wegree completely to use all this money for a few dribblers when the inner cit y is big shooting gallery. Stupid, assinine, disastrous.

  9. David says:

    If the loan comes from the state development department (I forgot the name), doesn’t all the interest then get returned to the state? I read that they finance all sorts of projects, including the GB Packer’s renovations and other developments around the state. Stupid, asinine and disastrous……? Why? We can walk and chew gum. Not building an arena will not lower crime.

  10. wisconsin Conservative Digest says:

    David every time you speak you exhibit more ignorance than anyone I know. All of the money in these TIFs comes from other parts of the schools, police, fire. You think that someone prints it. Do you have any knowledge at all?
    How will they pay back the loan? Not from these NY hustlers?

  11. AG says:

    WCD, what exactly are the current property tax revenues of these barren fields?

    And if you have been paying attention, you’ll see that the majority of the payments for the public portion will come from the player salaries. Not just the salaries, but actually only the increase in their salaries in the coming years. Would the income tax from those salaries still come to the state if the team left town?

  12. David says:

    WCD……. aren’t we talking about the bonding player salaries? Are you still stuck on the streetcar issue? I’m sure I don’t exhibit more ignorance than anyone you know…. I’m pretty sure you know a lot of idiots. Don’t you have an idiot convention coming up this spring…. somewhere in Lake Country? I think you need to bone up on the issues dopey.

  13. Bill Sweeney says:

    I know it is somewhat quixotic, but I hope any discussion about the new Bucks arena would include the position of the community group Common Ground which is that before any public money is offered to help build a new arena, there should be a public commitment to apportion at least $150 million to go toward upgrading the public recreational and playground facilities in Milwaukee. Given the level of violence in some areas of the city, this could have both a practical and spiritual effect. It should be obvious that we should care as much, if not more, about improving the environment where our young people live and play as we do about supporting the wealthy playgrounds of owners and players in the NBA.

  14. Wisconsin Conservative Digest says:

    Bruce, how incredibly stupid are these people. Barrett is bringing all kinds of projects into this scheme. Do any of them do any homework?
    That money comes right out of the general fund. The money for the trolley is coming from TIFs which takes money from all of the districts while kids in 3rd grade, 3of4 cannot read. The police are down 250 positions and the city is a shooting gallery. Does anyone think that the state is going to put up 488 million? No, so where will the rest come from, but out of the other depts. With levy limits Barrett cannot raise taxes. What about all of the infrastructure?? when they put all of that money downtown infrastructure takes money from streets etc,. the rest of the city. Do any of you have any knowledge whatsoever. Bruce knows what is going on, you clowns do not. What ignorance. Over a billion spent on a dozen dribblers and two hustlers from NY.
    Walkers plans have already been defeated, the rest are even worse for the city and county.

  15. Matt S. says:

    @ Bill Sweeny, good points. @ Bruce, what’s the latest from Common Ground?

  16. matthew says:

    Wouldn’t it just be cheaper gor the state to buy the team, and remodel the Bradley Center?

  17. Wisconsin Conservative Digest says:

    Who is going to pay the shortfall from the trolley?? With what?? Cincinatti is getting half the revenue it wanted.

  18. David says:

    WCD…… you need to get some rest.

  19. Marie says:

    Bruce, thanks for pulling back the curtain…
    Jordan (#6), Perhaps Bradley Center could be sold to Marquette U., or BC could work a deal with Golden Eagles and Admirals to keep playing there, along with concerts and others now renting it, but only if Bucks leave town. If new arena is built, those teams must play there to make it viable, since they are the ONLY PAYING TENANTS ($1.5M in 2014, per Bradley Center 2014 audit online).

    The Bucks pay NO RENT, and yet got a whopping $4.7M in “revenue sharing” from all “products & services” (not just Bucks games), which totaled $11.3M. A great gig if you can get it!

    That’s why Marquette (a nonprofit U) wisely declined to further subsidize the Bucks. (“We already gave at the office…”)
    Ticket buyers also already pay their freight: $2.3M in service charges for BC arena upkeep. Raising those fees much more–to pay for a new palace–would hurt ticket sales. Even with ticket buyers and state/city subsidies, deferred maintenance is still about $35 M.

    Google “BMO Harris Bradley Ctr. 2014 Annual Report.” A dose of factual reality to balance those dreamy, futuristic arena pictures…

  20. tim haering says:

    Bruce, you drew a crew of commenters today. Lotsa good ideas, but Walker will be the hero here – as he intended. As soon as he’s out of the prez race and has a week or two to salve his ego, he’ll phone up the Menominee and make them a counter-offer. You watch. IT’ll start a tribal bidding war that will eventually draw in the HO Chunk in Beloit.

  21. wisconsin Conservative Digest says:

    For life of me I cannot believe that we are actually going to do this when we have a war in the city, daily shootouts, course it is Walkers and Bushs fault there, kids cannot read, only 1 of 4 third graders can read and we care building these toys.

  22. PJ says:

    Taxes should be invested in safety and in developing projects that will help to generate taxable revenue. I’m not a rabid sports fan but I can see a sports/entertainment district generating millions more than a trolley.

    Of course if we had a real municipal government, it would spend it’s time and our dollars on reducing the Dodge City reputation on our streets and the improving the third world education that our children are getting.

  23. Wis Conservative Digest says:

    Where is the money going to come from when the money from these TIFS go to the Bucks, we are handing these hustlers a billion dollars? Is this nuts? Where is the subsidy going to come from for the trolley? Cincinattii and half of these turkeys around the country are operating at big losses. No one has seen any big increase in development around these lines.

  24. Andy Umbo says:

    The real issue is that Milwaukee has gone from a second class city to a third class city due to brain drain, corporate drain, whatever; and the elected officials here have to stop feeling distraught that the city won’t have a lot of professional Class-A teams, it can’t afford those teams, and it can’t tax to afford those teams…give it up…many years ago the Milwaukee J/S started a series of articles that showed it wouldn’t make one bit of difference financially to the city if the Brewers stayed or went, and all of a sudden the articles disappeared.

    We don’t need the Bucks, I’ve been to the games and they have the top tier of seating closed off and the rest are barely filled. We don’t need to pay our tax money for any of that, or to enrich a private team owner because the local yokels would be mad they don’t have some sort of professional team; next it’ll be soccer, rugby, competitive basket-weaving…. I’ve never sat in a senior management meeting and heard anyone add or subtract a city from an expansion plan based on whether or not they have a bunch of professional teams playing there (it’s always been about tax breaks, costs, and salary averages.

    Do yourself a favor, wiki metropolitan areas in the U.S. by population, then look at the cities above and below us on that list. How many of those cities are trying to keep alive an extensive library, an opera, a rep theater, a ballet, a symphony, a major league baseball team, a major league basketball team, two children’s museums, a regular highly rated museum, an art museum, and a zoo? Yeah. So I’d rather have all the cultural stuff get my tax money, and the ‘for profit’ sports franchises can find their own money, or move ’em if they have no loyalty to the city!

  25. Midthun says:

    Great article and many good questions. Just a shame that the conversation is being shanghaied by WCD and all of his red herrings and firebombs. Is “shooting gallery” the phrase of the day? And how is his tribe helping anyway?

  26. Coyotedaddio says:

    Bear in mind, a H U G E part of the cost to build the Bucks Arena would have been borne by the Menominee’s Hard Rock Hotel & Casino in Kenosha. In fact, when the governor turned down the Kenosha casino he said no thanks to an $8 Billion bonanza that makes the Buck’s offer look puny by comparison.

  27. Kyle says:

    Coyote, the existing agreement with the Potowatomi tribe would have tied up any of that money in court for a decade. And if Chicago tries to solve their problems with a casino (which they’re discussing), then half your market goes dry. Personally, I’d have preferred an approval and a fight with the Potowatomi, but I can’t pretend that this whole thing would have been free money falling into our laps without risk. And “$8 Billion bonanza”? How do you think casinos get their money?

    Honestly, I hope you all get your wish and lose the Bucks. Then you can see all the taxes paid and revenue generated just go away, and you can fund playgrounds and schools and operas with the rubble that is Park East.

  28. Wisconsin Conservative Digest says:

    I hate to blow everyones little soliliquy about casinos, but way over 60% of the polls show that the people applauded the decisions of the gov not to have any more gambling. Most think we have too much already. If the state opened whore houses, drug dens we could pay for lots of things, but this state has a very large group of very moral people that agree with the founders of Wisconsin that gambling is not an asset but a negative. Since he made that decisions have you seen 100,000 protestors anywhere crying about it??? NO!
    Many people would happily close down the places that we have.

  29. wisconsin Conservative Digest says:

    Park East is rubble cause the milwaukee county board is filled with rubble. We do not want the Bucks to leave but we also do not want to pay them a billion dollars to stay as Bruce has laid out when we have pressing problems to solve like crime and MS and kids are more important then playing ball.
    The little revenue that the Bucks bring in will be spent in other recreational areas far better for the community than basketball and gambling. I prefer Marquette and UWM where a lot of the revenue will flow.

  30. David says:

    The state will lose $10 million per year when the Bucks leave. So they’ll just continue cutting shared revenue to Milwaukee until they make that money up. The sate is a bloated mess that continues to rob Milwaukee.

  31. PMD says:

    Kyle other cities have not fallen apart after the loss of a professional sports franchise. Do you think the Bucks leaving Milwaukee would be the exception to the rule?

  32. David says:

    I don’t believe Milwaukee will fall apart. However, we’ll be one step closer to the edge. I live in the city, I am not married and have no kids. It would be another reason for me to consider other places to live. I support our local sports teams and our other cultural amenities, but I find our current “brand” of leadership at the state level very unappealing because they believe what is bad for Milwaukee is good for them. I don’t want these decisions left up to people fighting political battles (WCD). I want to be reasonable and look at the big picture.

  33. Observer says:

    If all the casino’s were to close, the state would be in the same shape as West Allis was when it had to go after drug stores like Larry’s and State Fair that weren’t prompt with their taxes.

  34. Kyle says:

    I didn’t say the city would fall apart. I pointed out that people are saying the Bucks can go away because playgrounds, schools, police, and culture are more important. So fund those things, let the Bucks walk, and then balance the checkbook and see if you come out ahead. I don’t think either the city or the state will, but given the animosity toward public financing and Bruce’s inflated numbers, I genuinely hope you get the chance to find out.

  35. PMD says:

    What is an appropriate level of public financing and how does one make that determination? Is it fair to factor in the wealth of the team’s owners when making that determination?

  36. AG says:

    PMD, regarding your last question. No.

  37. Andy Umbo says:

    Anybody on here that thinks Milwaukee is going to spiral downward if we lose the Bucks is just plain crazy. You might be a ‘fan boy’ for the Bucks, but that doesn’t mean a city as small as this should support them with tax deals, or even that there would be a big drop in revenue. Not likely, and the Milwaukee J/S back in the Brewers stadium days was writing the same thing until the Greater Milwaukee Committee told Steve Smith to cut it out.

    There are a bunch of good books about this stuff: Public/Private Partnerships for Major League Sports Facilities by Judith Grant, Public Dollars / Private Stadiums by Delany. This from Grant:

    “Miller is a classic. Bud Selig, owner of the Milwaukee Brewers, promised he would build a ballpark with his own money if local officials would only move a highway at a cost of $6 million. Later, he went to then-governor Tommy Thompson for help. In a slick move, Thompson got the state legislature to hike sales taxes in the counties around Milwaukee. Selig would still have to put in money, but he wiggled out of that, too. Ultimately, he got the stadium for nothing. Awed team owners made him commissioner of Major League Baseball. (Thompson, who was defeated for the Senate last month, was known as the politician who conquered social welfare — but hardly corporate welfare.)”

    I was distressed while living and working in Washington DC back in the Brewers controversy days, to here a local Washington DC radio interviewing one of these authors ask them: “Which city really got screwed?” To which they answered: “…oh, Milwaukee by far…”.

    Many of my compatriots were anti the new Brewers stadium too, and couldn’t believe that so much public opinion far overrode the actual intelligence in the community, and it happened anyway. It seems like the least sophisticated thinkers are the ones that feel the greatest loss at losing a local team, but the taxes are hitting you 18K a year warehouse job salary, they’re hitting the rain-makers in this town!

  38. PMD says:

    I can’t imagine Milwaukee without the Brewers, partly because I love baseball but also because they seem so tied into the fabric and identity of the city. I’m not a Bucks or NBA fan, but do fans of one or both feel the same way? I know my feelings about the Bucks and especially the NBA clouds how I feel about a new Bucks arena.

  39. David says:

    ” A fan boy” I stopped reading your post after that. Maybe you should end with that rather than lead.

  40. James Woodson says:

    @Andy Umbo, don’t forget about the book titled “Field of Schemes.” In fact, I encourage everyone here to check Mr. Neil deMause’s website detailing how sports franchises hussle local governments out of millions of dollars each year to help line the pockets of billionaire owners. Here is a direct link to the Milwauekee Bucks section

  41. PJ says:

    I am not speaking from the viewpoint of a fan who wants to sit in a posh arena or ball park. I’ve been to exactly 2 Bucks games and 1 Brewer game in Miller park. However, does anyone remember S 43rd street before Miller Park? I doubt that that area would have enjoyed the same revitalization without it. I’m sure the West MKE crowd would argue that the area would have been revitalized anyway but I’ll bet having a world class ballpark in the neighborhood has done wonders for the property value (investment attraction). How many people now enjoy employment along that corridor?

    Also, I can understand a VP of Manufacturing of a relocation candidate not caring if the target city has professional sports teams but I’ll be the VP of HR would love to be able to sell that amenity to prospective employees (“Milwaukee has the Brewers/Bucks…” is a more attractive sell than “Milwaukee has a trolley…”). I’ll bet both would be afraid of our Wild West reputation (albeit localized to certain neighborhoods) and our less than stellar school system.

    Claiming that we’re building an arena for the players is intellectually lazy. They are built to attract the fans. A basketball player making $4M per year will play in a parking lot as long as he gets his $4M. The fans are the revenue generators for the team owners, the NBA and venue owner and local business owners (read: highly taxed taxpayers).

  42. Kyle says:

    So when you say “in the wealth of the team’s owners”, do you mean consider giving them less because they have money, consider giving them more because Milwaukee could use more investors and donors with deep pockets, or both?

    I just think it’s crazy to assume that every single person who paid for a Bucks game would spend the exact same money in Milwaukee. I also think it’s crazy to assume that the state won’t lose income tax, because while you may replace the ticket seller jobs, you aren’t going to replace the 20 millionaires. And with the huge new TV contract the NBA signed, you aren’t getting a piece of that without a team. But go ahead and turn them away. I’m sure something will replace some of that economic activity, but you’ll lose some of it too. If it’s not worth it to the people of Milwaukee, then let them go.

  43. PMD says:

    Both Kyle. This is a rare issue where I find myself agreeing with a lot of the arguments being presented by both sides, and when thinking about it a lot of questions pop into my head.

  44. Marie says:

    It’s not a false choice about whether Bucks stay or go. Politicians and many others want them to stay, but at what price? Economists have reported ad nauseum about how public subsidies don’t have a net positive impact. These guys can afford to buy half of MKE. Instead they are, in Neil deMause’s lingo, extorting politicians to give them whatever they want. The highly regarded Field of Schemes author says owners have been doing this for decades and now it’s routine.

    I love baseball, and I’m glad to go to games now and then. But we do not need to make any team owners even more insanely wealthy so they can park their cash in some other state (or country).

    That’s the big issue. Economists even say cities’ overall economies can improve when the sports-team vacuum cleaners stop sucking so much discretionary spending AND public money from the region.

    Did anyone read Don Walker’s JS interview with Wes Edens around 4/9 when he talked about his puffed-up vision for the country’s “biggest outdoor sports bars” so “hardy” Packers fans can sit outside in winter and drink outrageously priced beer together? Does anyone else think he might view us quaint “natives” as rubes to exploit, even when we’re not at Bucks games?

    These billionaires can afford to build their own arena AND a year-round sports-bar playground. Other Milwaukee entrepreneurs should not be out-competed by them. Stop this sports-team socialism and legalized fleecing! Who else gets to skim revenue from other business’s event without doing a thing to generate it? *Watch out UWM Panthers; they could got after your game-day revenue next, just for being in “their district.” No different than fleecing Marquette.

  45. Bill says:

    Thank you Bruce for reporting on this because we know the fanboys at The Business Journal won’t raise any of these questions.

    It’s funny that they talk about this spurring ancillary development. One of the reasons they want a new arena is so that they have the amenities. In other words, why have people spend money at Buck Bradleys or Water Street when it could be spent at the arena. My guess is a new arena cannibalizes some of these businesses.

    Memo to the Bucks. I’d quit sending out Alex Lasry to do PR. Peter Feigin isn’t a whole lot better. They come across as extremely condescending. The trouble is no thinks (other than Steve Jagler) that Lasry has his job based on anything other than his last name.

    I love the Bucks. I’ve had a 10 pak or more for the last 15 years. I think the BC is a terrible venue, but given the profits in sports today I’m not sure why I need to pay for the arena,

  46. Observer says:

    There’s a timely interview with Alderman Bob Bauman over in Milwaukee Magazine.

  47. Bob H. says:

    Other than Bruce’s figures, I don’t see much in the way of specifics here. Consider this:
    1.) Bruce sites a taxpayer cost of $850 million, $450 million from taxes lost on the new arena. This will likely be a public or quasi public entity, most government bodies do not tax public buildings, or if they do, they are given tax breaks.
    2.) The 380 million Bruce speaks of is the aborted Walker Plan, which, by all accounts, is dead. So, right off the top this amounts to $830Million of supposed taxpayer cost.
    3.) A study last year by the MMCC revealed he Bradley Center brings in 204 Million in revenue per year, in 10 years this would be over 2 billion. The Center also creates 2,350 jobs. A study last week showed the enormous benefit the Bucks had on downtown spending.
    4.) Income taxes from player salaries account for over 8 million and with the new contracts, this is now estimated to be 12 million per year or 120 million in 10 years.
    5.) The Bradley Center needs 100 million in deferred costs, and this certainly will rise. Are all you good taxpayers willing to pay this bill?

  48. Andy Umbo says:

    It’s cute that Kyle thinks that most of the Bucks actually live here! They may have an apartment here, but it’s not the 50’s; the bulk of their “millionaire” money isn’t here (short of buying cocktails at Elsa’s)…also PJ, I don’t think anyone on here is claiming that we’re building an arena for the players, it’s the owners that want us to build an arena to defray their personal costs, and enhance their net; and they’re doing it by trying to sell us the idea that there’s a huge economic “plus” to having a team here, which all the books mentioned above have certainly proved is not true. Milwaukeans have to quit defining themselves as valuable based on whether or not we have sports teams, it’s remedial. If you had decent middle class jobs, less property taxes, and enhanced mass transportation, the companies would follow. Also, trust me PJ, I work in the media/tech industry, I know plenty of people that like sports, but they wouldn’t based their decision to move someplace on whether or not a city had a sports team. Many like whatever team they liked when they were a kid, and that’s who they follow.

  49. PJ says:

    Andy, so what you’re implying is that a municipality shouldn’t provide incentives to attract businesses (which, after all, is all a sports team is)? The wealth of the owner is immaterial, it’s the attractiveness of the business that counts. The “players” angle comes from a much broader discussion on the subject.

    You speak of middle class jobs, do you mean like the ones that are budding along the 43rd street corridor? Government can only create government jobs but they can provide incentives for entrepreneurs to invest and risk their capital, which creates jobs.

    I agree, having a sports team probably won’t be the deciding factor for most relocation candidates however, it adds flavor to their decision. If you come from a city that is in the same conference, league, etc that the MKE team is in you’ll likely have opportunities to see games in which “your team” plays, here in MKE.

    Frankly, the fate of the Bucks or Brewers is not terribly exciting to me. I’m more interested in a municipal and state government that encourages business development. In this case the business is a sports team.

  50. wisconsin Conservative Digest says:

    I believe in using stimulus to attract businesses but do we really want to spend 1 billion to keep Buck and their handful of jobs? What are our priorities.

  51. ag says:

    Bob H, the players live somewhere else, but their income tax (and that of visiting players) is paid here.

    WCD, it’s not a billion dollars… Bruce’s math doesn’t take into account the benefits of the project nor does he take into account the costs of not building the arena or the Bucks leaving.

    Between the direct economic benefits of the Bucks, the revitalization of Kilbourntown, and the intangible benefits of a pro sports team in a city like Milwaukee, I believe the current deals being worked on seem generally fair for the team and the public.

  52. James Woodson says:

    @PJ, you are correct that incentives are given to business/corporations to set up or relocate, but giving 500 million+ to a “business” like the Bucks who won’t pay any property tax or sales tax isn’t going to create the type of return that would make the incentive acceptable. All the rewards (ie money) of building a new arena will go to the owners, and the ancillary development they talk about is completely notional as of right now, since they won’t be under contract to actually develop anything (ask Sacramento about that with their new Kings arena deal). Something that everybody needs to ask themselves is if building an arena is such a sound investment, why wouldn’t the Bucks owners just build it themselves? It’s because they know that sports arenas are not money making machines like people think they are and they want local citizens to pay for the cost instead.

    @andy, “If you had decent middle class jobs, less property taxes, and enhanced mass transportation, the companies would follow.” I agree with you but don’t forget about good schools and public safety, something that the city should be paying for instead of a new basketball arena.

    @Everybody, while WCD can be kind of a blowhard, his viewpoints in this argument shouldn’t be ignored.

  53. Wisconsin Conservative Digest says:

    Other things have nothing to do with the fact that with interest, infrastructure, tear down of BC, both Bruce and the Leg Ref bureau figures all show 1 billion dollars. Start adding up.
    Blow hard?? I do my homework, Bruce will attest to that. Have been writing newsaper columns for 50 years. I do not sit here and just blow talking points.

  54. PMD says:

    I think maybe some believe you are a blowhard because you constantly call all white liberals racists, among other foolish statements. You can’t expect everyone to take you seriously when you say stuff like that.

  55. Mike says:


    The reason the owners are asking for money is because professional sports is the one industry that’s been really successful in having the public foot the bill for their capital expenditures. They could pay for the arena themselves and still make money off it, but what’s the point if the government is looking for ways to subsidize your efforts.

    My business is buying a building and we’re not asking the government for money, but probably only because we’d know the answer would be a resounding no. If they were handing out subsidies to accounting firms we might be in line to get ours.

  56. David says:

    So…… are we to believe that if we don’t build an arena we’re suddenly going to invest in our public schools? As if 14,000 per student annually at MPS isn’t enough? We’re suddenly going to build a great regional transit system while middle class jobs pour into Milwaukee? Thank God we didn’t build that arena because crime is just plummeting. Right. This is a false choice. We continue to gut transit, we continue to defund MPS, and we continue to reduce shared revenue to Milwaukee which directly impacts our public safety budget.

    It doesn’t matter to me what WCD has to say because he never says anything. He is a blowhard and is obsessed with partisan politics / games. He would like to see Milwaukee fail because it fits his narrative that Milwaukee is bad because Milwaukee is democrat.

    If we do not build an arena, we will still gut transit, we will still underfund parks, we will still see less and less shared revenue, we will still lack funding for our cultural amenities, and we will continue to dismantle public education both secondary and post secondary. All because of some idealistic, classist argument about billionaire carpetbaggers and phony priorities. Sounds like a great plan. And WCD…. before you spew your stupid semi illegible response….. shut up.

  57. Matt S. says:

    Detail from yesterday’s Marquette Law School Poll:

    Bucks arena funding

    Seventy-nine percent oppose borrowing about $150 million to support a new arena for the Milwaukee Bucks, with 17 percent supporting the proposal. In the Milwaukee media market, 67 percent oppose funding for an arena and 29 percent support it. Those views vary by less than 2 percentage points among the City of Milwaukee, the surrounding suburban counties of Waukesha, Ozaukee and Washington counties, and the seven other southeastern Wisconsin counties included in the media market.

    In the rest of the state only 9 percent support borrowing for an arena, with 88 percent opposed.

  58. AG says:

    I wonder what the results of the poll would have been if had instead said, “Would you support the state facilitating the financing for an arena that is paid for through NBA player salary increases with the interest payments directly benefiting state schools and libraries?”

  59. PMD says:

    AG I certainly hope you are not suggesting that poll questions can be biased or misleading in some way, with potential variances in answers depending on the way the questions are worded. Never could that occur.

  60. wisconsin Conservative Digest says:

    AG, have you no idea of how things work in this state? There was a statewide referendum about building the Brewers stadium with money only paid from a sales tax, in this area, and it was defeated almost 2-1. Out state did not have to pay a dime.
    For all of those people who continue to display ignorance. Money from Milwaukee that would be used for schools and police will be shuttled to Bucks via infrastructure spending and TIF districts. TIF takes money that already would be going to those areas.
    The 220 million dollars that Barrett wants the state to pay would come directly from general fund. Principal and interest would not be covered by the Bucks taxes and then you get into the fact that every city in state would like the same deal for their arenas. How you going to get a legislator from Appleton to vote for a turkey down here, and not get him to want money for their new plans?
    Most peopel out state do nto give a dman about the Bucks. Tehy follow UW, marquette. Bucks gete only about half full even when good and they do that by virtually giving away tikcets.
    Numbers yesterday show that 79% opposed which is political poison right ther but it is really 60% 0opposed in metro area nd 98% out state. I ahve yet to fins anyone in my Consrvagtive network that ants it.
    Cutting school aids and gving a billion to the bucks, if you take all the interst, iunfrsstucture etc. is politcla poison. Thes elittle ditricts are ahvign big trouble with declining enrollment cause of no kids, now you want to ake away the janitors?
    the Eems ar enot backign this, no one has come forward so that mens the GOP has to stand alone to back Milwaukee whcih pees all over them all the time. Barrett jsut blamed stat for double shooting. Now yoju want to get moemy from them?
    there is no one here with modicum of sense ecept Bruce.

  61. AG says:

    Nope, I’d never suggest such a thing! Nor would I presume to think that the majority of residents are ignorant of the details of most political debates… ‘merica!

  62. PMD says:

    AG as WCD suggests can you please learn how things work in this state? Thank you.

  63. AG says:

    I’m sorry, it’s a personal flaw, I’ll work on it.

  64. PMD says:

    Ha OK great thank you. We all appreciate that. Apology accepted. Just sign up for WCD’s online course “How the State of Wisconsin Works for Dummies.”

  65. M says:

    From many comments here and elsewhere, it sounds like people believe public subsidies are required to meet the funding demands of the Bucks, so they won’t leave, which would kill MKE’s appeal to millennials. (Complicated logic…Bob Bauman’s called it extortion.)

    My niece’s fiance is a 30-something African-American recruiter who helps fill well-paid IT positions all over the country. His response to MKE has been astonishment for how racially segregated it is. No one mentions this as a possible deterrent for potential hires of any ethnic background. Many big-city folks want to live somewhere that’s more vibrantly integrated and diverse, which is how many thriving big cities now are. MKE’s well behind. My future nephew has lived in Brooklyn, Newark and LA. MKE just feels weirdly archaic to him in many ways. And integrated NBA teams (or ownership groups) don’t change that.

  66. M says:

    AG & PMD: How poll questions are framed does seem to matter. A pollster’s bias can also be revealed in how they report results. Marquette’s Charles Franklin said in JS that “salesmanship is required” to convince taxpayers this is a worthwhile use for their tax money (since plebes can’t discern their own best interest).

    Sounds like politicians could use the skills of a used-car salesman. I read that Bud Selig is pitching arena subsidies, presumably as payback for all the public subsidies that made his whole family very wealthy (separate from his MLB-commissioner millions).

    Perhaps he can also talk his long-time friend Herb Kohl into enhancing his community legacy by doubling or tripling his arena donation. That would be a good use of salesmanship and noblesse oblige.

  67. David says:

    M……. racial segregation is brought up all the time. I’m not sure if you’re new to this site but we discuss it often. Milwaukee is diverse, our suburbs are not. Maybe that’s a question for WCD. 97% white is no accident. However, I don’t think it belongs in this debate. Buck’s games may be the most diverse community activity in Milwaukee. Nice try.

  68. PMD says:

    What are the most diverse parts of Milwaukee? I used to live in Bay View and on the East Side, and I would not have labeled either one diverse (this was less than 10 years ago). Are they more diverse now? Are places like Story Hill or Washington Heights diverse?

  69. Al Lindro says:

    People argue that “we” (Milwaukee) can’t afford good schools, parks, policing, street repairs, etc., etc.. no matter WHAT specific “other” funding issue being considered. I call BS on that.

    With property taxes as high as they are, the only reason I can conceive of for the substandard or declining levels of municipal service delivery is poor performance, including inefficiency. In fact, is not our per pupil spending much higher than average?

    I’ve lived and owned property in several cities in different states. If any of them taxed property owners at Milwaukee’s level there would be some kind of organized protest. So what’s OUR problem?

  70. AG says:

    I’d say riverwest, washington heights, story hill, the far northwest side (think Granville), silver city… and other places.

    Wait, how’d we get so off track?

    Sad to see M’s opinion of the sales profession…. Did you all know that the only national collegiate business fraternity for sales and marketing is located in our very own city? They’ve been around since the 50’s and work to promote sales as a profession that helps meet customers needs and not just a shysters shtick to scam unsuspecting consumers.

  71. wisconsin Conservative Digest says:

    All liberals are not racist just the white male liberal racist that run Milwaukee, keep Blacks and Hispanics in their place, chased out all of the people to Waukesha and points west with their busing, regulations, city, county govt. That is why we have such segregation cause those in charge keep the inner city people in bondage.
    Look around you at the leadership of the big groups, clubs, businesses, govt. All white male, with few exceptions.
    Segregation is direct product of no jobs and no education. This is on purpose, if not the leaders are really stupid.

  72. PMD says:

    I did not know that AG. My wife is in sales. It’s an incredibly demanding, frustrating, and stressful line of work. She works insanely hard, travels extensively, and works very long hours. That some dishonorable people are in sales does not make it a dishonorable profession.

  73. PMD says:

    WCD I asked John Gurda and he disagrees with your revisionist history.

  74. AG says:

    That’s because John Gurda doesn’t know about the secret plans laid out by the Illuminati and their local chapter called “the syndicate.”

  75. PMD says:

    Good point AG. I’m going to tell him to contact WCD to learn the truth.

  76. M says:

    Anecdotal remarks about my niece’s partner (a talent recruiter & occasional visitor) are just that. Some parts of MKE are somewhat diverse.

    I’m optimistic about efforts by many groups and individuals to create much more vibrancy, inclusiveness, connectivity, etc, etc, in MKE. All these deserve kudos and to be promoted. Urban Milwaukee is part of that, Neighborhood News Service, Urban Ecology Center, cultural groups, MAM, the Rep, Newaukee. No intention to offend anyone by omission on this list…A rising tide will lift all boats…and the struggle continues…

  77. M says:

    Found this on the proposed state “arena authority.” Walker’s plan would include much “ancillary development” under the tax-exempt “district” umbrella (it mentions restaurants, bars, parking lots, practice facility & more). Who knows, maybe up to 40-50 acres could be included. They might want to keep up with the Brewers’ 75 exempted acres. Bauman’s right–there could be nothing to TIF cuz nothing will be taxed (and they think MKE’s being stingy! Bruce, you may want to revisit those tax-free numbers.

  78. Observer says:

    Historical note: Milwaukee County Stadium was originally built as a home for the Milwaukee Brewers of the minor league American Association, replacing the outdated and deteriorating Borchert Field.
    Several locations around the city, including the Wisconsin State Fair Park in West Allis were considered before the city settled on the defunct site of the Story Quarry, on the west side of Milwaukee near the Story Hill neighborhood. County Stadium was the first ballpark in the United States financed with public funds. Construction began in October 1950 and, hampered by steel shortages during the Korean War, was completed in 1953. Present day Miller Park, also financed by taxpayers sits in the same area. So we started the now national practice of giving to wealthy sports team owners ~

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