Bucks Bailout Gets Even Bigger
And the proportion paid by local taxpayers keeps rising, which the Journal Sentinel still doesn't report.
Milwaukee Journal Sentinel columnist Dan Bice today offered an update on the financing for the Bucks arena that increased the cost for taxpayers. He reported an insider’s estimate that the $93 million in bonds to be issued by the Wisconsin Center District will probably cost $200 million when interest costs are included. Repayment of the district’s bonds, which will presumably be repaid by its hotel room and car rental tax (though that hasn’t been precisely spelled out) is likely to take many years, which will increase the interest costs.
It’s certainly a positive sign that the newspaper has begun to include the interest costs, something it hadn’t done for some time, but Bice’s story is still lacking in all sorts of ways.
First, the newspaper has yet to report the massive tax shift from state taxpayers to local taxpayers. The original plan called for the state to issue $220 in bonds, which was expected to cost $380 million with interest costs included, while the city and county would contribute $30 million, or about 7 percent of the total. Bice’s new total show local taxpayers now paying $327 million of an estimated total cost of $407 million, or 80 percent. I’d say that massive shift in who is paying is quite newsworthy.
-A property tax exemption on the arena which could result in a 30-year loss to taxpayers of as much as $450 million.
-A property tax exemption on any adjoining development by the Bucks, such as a beer garden, practice facility, public plaza, bars and restaurants, Bucks apparel and merchandise shops, etc. Assuming all that is worth some $200 million of the $500 million the Bucks have said they will spend on additional development, that would add another $179 million in lost property taxes over 30 years. (Both of these figures, as I’ve explained earlier, are estimates, and could change: the Bucks have suggested they expect to pay taxes of certain adjoining development, but the language in state law would have to be amended, and I’m told that city officials are pushing for such changes.)
-The state proposal for the Bucks arena also awards a sales tax exemption on “building materials, equipment and supplies used solely in the construction, renovation, or development of a sports stadium.” Assuming the cost of materials for the arena is, say, $300 million, that exemption would be worth about $17 million to the team.
-The proposal’s language also specifies that the “income of a sport and entertainment district would be exempt from the state corporate income and franchise tax.” This language is very broad and would seem to include anything the Bucks develop under the banner of an entertainment district. Given the state corporate income tax of 7.9 percent, this exemption could be huge.
-The creation of a tax exempt authority to help run a private company’s sports stadium allows Herb Kohl to claim his $100 investment in the new arena (which was part of the contract when he sold the team) as a charitable donation, meaning taxpayers will actually pay anywhere from $20 million to $36 million of his contribution, as I’ve reported.
-Federal and state tax exemptions on the bonds issued by the state and Wisconsin Center. My guess is this will be a small cost, perhaps several million dollars.
Assuming all of these exemptions are retained, the total cost to taxpayers will likely be in excess of $1.1 billion. These are all costs — property taxes, sales taxes, income taxes, etc. — a normal business pays. The only subsidy businesses typically get are a Tax Incremental Financing plan, which will provide about $12 million of the help the Bucks will get.
Bice also reported that both the city and county were originally asked to contribute to the arena by certifying their debt so the state could collect it, but only the county agreed to do this. Of course that was already reported by me. And no, Bice didn’t credit my story.
Nothing new about that. In a previous column, Bice reported about concerns by Democrats that current state party chair Mike Tate and a candidate to replace him, Jason Rae of Nation Consulting, would swap positions, with Tate getting a job at Nation Consulting. That, too, was previously reported by me.
I don’t blame Bice, as this appears to be the newspaper’s policy. Back in May, the late Don Walker wrote a story telling JS readers for the first time that (1) the arena proposal would also exempt parking lots, garages, restaurants, parks, concession facilities, transportation facilities and related structures; (2) the naming rights to the arena, which could gain the Bucks another $60 million, would not help pay to build the arena; and (3) the proposed governing board for the arena sports district would have 11 members, nine of whom would be appointed by the governor, with just two appointed by local officials. All of this had been previously reported by me, yet there was no credit to Urban Milwaukee or link to the story.
That’s okay, imitation is the sincerest form of flattery, and if over time, the newspaper begins to more frankly report this story, that will be good news indeed.
More about the New Bucks Arena
- Eyes on Milwaukee: Bucks Honor Herb Kohl at Arena Opening - Jeramey Jannene - Aug 26th, 2018
- Eyes on Milwaukee: Bucks Open Fiserv Forum - Jeramey Jannene - Aug 26th, 2018
- Governor Walker Celebrates Grand Opening of the Fiserv Forum - Gov. Scott Walker - Aug 26th, 2018
- Walker Reconsiders Fiserv Subsidy? - Chuck Quirmbach - Aug 3rd, 2018
- Wisconsin Center District Announces Substantial Completion of Fiserv Forum - Wisconsin Center District - Jul 31st, 2018
- Eyes on Milwaukee: Bucks Will Play in Fiserv Forum - Jeramey Jannene - Jul 26th, 2018
- Eyes on Milwaukee: Bucks Plan German-Style Holiday Market - Jeramey Jannene - Jul 16th, 2018
- Eyes on Milwaukee: Bucks Show Off Nearly Finished Arena - Jeramey Jannene - Jun 28th, 2018
- Eyes on Milwaukee: Bucks Arena Getting Custom-Painted Fire Hydrants - Jeramey Jannene - Jun 6th, 2018
- Wisconsin Entertainment and Sports Center to Launch Sustainability Program - Wisconsin Entertainment and Sports Center - Jun 5th, 2018
- Eyes on Milwaukee: Bucks Still Won’t Play in Fiserv Arena - Jeramey Jannene - May 31st, 2018
- Eyes on Milwaukee: Good City Brewing Tapped for Bucks’ Live Block - Jeramey Jannene - May 31st, 2018
- Eyes on Milwaukee: Bucks Beat Hiring Goals on Arena - Jeramey Jannene - May 23rd, 2018
- Eyes on Milwaukee: Is Bucks Live Block Good Urbanism? - Jeramey Jannene - May 22nd, 2018
- Eyes on Milwaukee: Bucks Arena 95% Complete; See Inside - Jeramey Jannene - May 18th, 2018
- Eyes on Milwaukee: Bucks Unveil Old World Third St. Bar - Jeramey Jannene - May 8th, 2018
- Eyes on Milwaukee: Bucks Won’t Play in Fiserv Arena - Jeramey Jannene - Apr 27th, 2018
- Eyes on Milwaukee: Bucks Live Block Eliminates Performance Space - Jeramey Jannene - Dec 12th, 2017
- Eyes on Milwaukee: City Panel Okays Live Block Shrinkage - Jeramey Jannene - Dec 4th, 2017
- Eyes on Milwaukee: Bucks’ Live Block Connector Approved - Jeramey Jannene - Nov 21st, 2017
- Eyes on Milwaukee: Bucks Arena 68% Complete - Jeramey Jannene - Nov 21st, 2017
- Bucks’ Health Clinic Will Soon Open - Graham Kilmer - Nov 9th, 2017
- Eyes on Milwaukee: Bucks Unveil Arena Parking Garage - Jeramey Jannene - Oct 31st, 2017
- Eyes on Milwaukee: Bucks Arena On Budget, On Schedule - Jeramey Jannene - Oct 5th, 2017
- Friday Photos: Live Block Work Starts in Deer District - Jeramey Jannene - Sep 22nd, 2017
- Eyes on Milwaukee: Bucks Top Off New Arena - Jeramey Jannene - Aug 24th, 2017
- Photo Gallery: Touring The New Bucks Arena - Graham Kilmer - Aug 1st, 2017
- Eyes on Milwaukee: Inside New Bucks Arena - Jeramey Jannene - Jul 6th, 2017
- Friday Photos: The Deer District Rises - Jeramey Jannene - May 12th, 2017
- Eyes on Milwaukee: Council Approves Arena, Hammes Design Changes - Jeramey Jannene - Mar 1st, 2017
- Eyes on Milwaukee: Committee Okays Two Downtown Designs - Jeramey Jannene - Feb 22nd, 2017
- Eyes on Milwaukee: Bucks Unveil New Signs for Arena - Jeramey Jannene - Feb 14th, 2017
- Friday Photos: Arena Rises from Frozen Tundra - Jeramey Jannene - Dec 16th, 2016
- Eyes on Milwaukee: Bucks Live Block is a Slam Dunk - Jeramey Jannene - Dec 5th, 2016
- Friday Photos: New Bucks Arena From Above - Jeramey Jannene - Oct 7th, 2016
- Eyes on Milwaukee: Council Okays Streetcar to Bucks Arena - Jeramey Jannene - Jul 6th, 2016
- Friday Photos: Bucks Arena Work Prep - Jeramey Jannene - May 27th, 2016
- Eyes on Milwaukee: Bucks Arena Design Approved - Jeramey Jannene - May 17th, 2016
- Eyes on Milwaukee: How Urban is Bucks New Arena? - Jeramey Jannene - Mar 18th, 2016
- Eyes on Milwaukee: New Bucks Arena Approved - Jeramey Jannene - Sep 22nd, 2015
- Murphy’s Law: Is Abele Dumping the Marcus Center? - Bruce Murphy - Jul 28th, 2015
- Eyes on Milwaukee: Bucks Arena Winners and Losers - Jeramey Jannene - Jul 17th, 2015
- Murphy’s Law: How Abele Bailed Out Walker - Bruce Murphy - Jun 11th, 2015
- Murphy’s Law: Abele Plan for Bucks Arena Won’t Work - Bruce Murphy - Jun 4th, 2015
- Back in the News: Bucks Bailout Gets Even Bigger - Bruce Murphy - Jun 1st, 2015
- Murphy’s Law: Arena Plan is Massive Tax Shift to Milwaukee - Bruce Murphy - May 29th, 2015
- Murphy’s Law: MMAC Plays Hardball on Bucks Arena - Bruce Murphy - May 5th, 2015
- Murphy’s Law: State Bucks Arena Plan Fleeces Milwaukee - Bruce Murphy - Apr 23rd, 2015
- Murphy’s Law: The Secret Tax Subsidy Society - Bruce Murphy - Apr 14th, 2015
- Murphy’s Law: Should City/County Donate More to NBA Arena? - Bruce Murphy - Mar 24th, 2015
- Murphy’s Law: Bucks Owners Must Build Without Subsidy - Bruce Murphy - Mar 10th, 2015
- Murphy’s Law: How Could Walker Refuse Incredible Deal? - Bruce Murphy - Feb 12th, 2015
- Murphy’s Law: Foundation Helps Herb Kohl Get $20 Million Windfall - Bruce Murphy - Dec 18th, 2014
- Murphy’s Law: How Will NBA Arena Benefit the City? - Bruce Murphy - Dec 2nd, 2014
- Murphy’s Law: Dispute Over Bucks Arena Goes National - Bruce Murphy - Oct 23rd, 2014
- Murphy’s Law: 10 Reasons To Build Bucks Arena on Wisconsin Ave. - Bruce Murphy - Oct 8th, 2014
- Murphy’s Law: How UWM Deal Will Affect the Bucks - Bruce Murphy - Jul 3rd, 2014
- Murphy’s Law: Four Plans to Save the Bucks - Bruce Murphy - May 15th, 2014
- Murphy’s Law: 10 Key Issues in NBA Arena Debate - Bruce Murphy - Apr 24th, 2014
- Murphy’s Law: $1 Billion Needed for Milwaukee Facilities - Bruce Murphy - Dec 12th, 2013
- Murphy’s Law: New Moves to Bail Out the Bucks - Bruce Murphy - Oct 15th, 2013