Tuesday, May 13, 2014

An update on stadium taxes and Milwaukee buildings

As the idea of a new Bucks arena and related facilities continue to develop, let's take a look at a couple of other Midwestern places and what's going on with the funding of their pro sports buildings.

1. In Cleveland, voters agreed to extend the city's "sin tax" to help pay for the relatively new arenas for the Indians, Browns and Cavaliers. The local tax is on cigarettes and all forms of booze, and it's administered by elected officials in Cuyahoga County.
Now that the issue has passed, the matter at hand will be to decide how to distribute the money, estimated to be at least $260 million over 20 years, between the Browns' FirstEnergy Stadium, the Indians' Progressive Field and the Cavs' Quicken Loans Arena.

The teams – and some of their supporters – have said they hope it will be split evenly between the three stadiums. But that decision ultimately rests with county council.

The Cavs and Indians have shared an estimated $135 million worth of fixes -- including $23.9 million for scoreboard-related upgrades -- they are expected to request over the next decade. The Browns, via the city, have requested $23.7 million in sin tax revenue to repair FirstEnergy Stadium over the next 10 years.
The Cleveland case led Milwaukee Mayor Tom Barrett to be asked about the possibility of such a local tax in the 414, and Barrett said such a tax was "not feasible" under Wisconsin law. This led the J-S to pull their Politi-crap "analaysis" on Barrett's statement, and Politi-crap decided to act as the arm of the MMAC that they are- refusing to give Barrett full credit for telling the truth.
Barrett said that using a surcharge on the cigarette tax to help pay for a new downtown sports arena "is not feasible under state law." A spokeswoman said meant that the tax wasn’t allowed under state law as it presently exists.

But that doesn’t mean that state law can’t be changed. (Jake is facepalming)

Indeed, state approval is likely going to be needed for any mix of higher taxes that could be used to fund an arena expansion or renovation. In that respect, there is nothing different about the approval required for a cigarette tax increase, a funding option that’s used in other parts of the country.

Our definition for Half True is a statement that's partially accurate but leaves out important details. That fits here.
Sure it COULD happen later, Politi-crap, but Milwaukee can't use a cigarette or other "sin" tax to pay for a new Bucks arena AS IT STANDS TODAY, which is what Barrett was pointing out. And it is important to note that it would be the state that would have to pass a bill allowing it- it's not something the Milwaukee City Council or Milwaukee County Board could do on their own. And good luck getting Robbin' Vos or Scott Walker to do anything in the next 8 months to help Milwaukee on any subject, let alone letting them put in a new tax. So we're waiting until at least 2015 before the "local sin tax" option would be debated.

2. Another Wisconsin local tax that pays for facilities may be going away soon, as the 0.5% Brown County sales tax that is going to Lambeau Field improvements may be ended next year. The money goes to a local district board that administers the funds (much like the Wisconsin Center District and the Miller Park District in Milwaukee), bonds that helped to pay for Lambeau's renovations were paid off in 2011, and the last step is to have enough money set aside for Lambeau upkeep through 2031.
The district was set up by state law after Brown County voters in fall of 2000 approved a plan to fund improvements to Lambeau Field with the 0.5 percent sales tax. When the tax produces the $92 million to cover its maintenance responsibilities, the district board has several decisions to make, including whether the board itself will continue to operate and what would need to happen if the tax generates more money than is needed. [District Executive Director Patrick] Webb has stated any excess money should be returned to Brown County’s taxing entities, and he would like to see it paid back annually, but legislation as it is written seems to require that it be paid back in a lump sum when the Packers’ lease expires.

Webb has said in the past that the board was at least a year away from being able to certify that it has set aside enough money to meet its legislatively mandated responsibilities. State statute says the tax will be terminated "after the last day of the calendar quarter that is at least 120 days" after certification with the Department of Revenue that sufficient money is collected.

The tax supported renovations done in 2003, and the district has [set] aside about $50 million so far. The tax produces about $20 million annually. No study has been done, but at least a quarter of that annual income likely comes from outside Brown County, Webb said.
The questions that remain once the tax ends in 2015 is to figure out if the Board should continue administering the funds (if not, it goes to the City of Green Bay to take care of, much like the "sin tax" in Cleveland), and should Brown County put in their own sales tax as a revenue-raiser to replace this? They didn't have one before this, but with the sales tax being at 5.5% for over a decade, there could be an argument made that locals are used to that tax rate, and taxes generated by Packer tourism could be used for something other than Lambeau Field.

3. The Wisconsin Center District's facilities were back in the news this week, as the District hired a consultant to discuss the city's convention center and needs in hosting major nationwide conferences. The Milwaukee Business Journal was able to get their hands on the information ahead of tomorrow's WCD meeting, and the consultant said the city would be left behind if it didn't improve what it currently has.
The study, obtained by the Milwaukee Business Journal in advance of a Wisconsin Center District board meeting Wednesday, offers preliminary plans for a $200 million expansion of the Wisconsin Center, Milwaukee’s largest convention space. The Wisconsin Center District owns and operates the center, as well as the Milwaukee Theatre and U.S. Cellular Arena downtown.

It recommends expanding the center’s exhibit space from 189,000 square feet to nearly 250,000 square feet; its ballroom from 38,000 square feet to 50,000 square feet; and its meeting space from 40,000 square feet to about 75,000 square feet....

Officials from the district and Visit Milwaukee have long argued the convention center is undersized when compared with convention centers in peer cities. The study compares the Wisconsin Center to venues in 12 similar-sized cities and found it is the third-smallest at 266,000 square feet. The largest convention center in the study, the Indiana Convention Center in Indianapolis, is 738,000 square feet. (NOTE FROM JAKE: The Indiana Convention Center includes the former RCA Dome where the Colts used to play, and was added onto the former convention center when Lucas Oil Stadium was opened for the Colts in 2008)
The consultant adds that Milwaukee's Wisconsin Center currently hosts about 200 events with 600,000 people a year today. That number would decline to 172 events with 556,000 if nothing is done, or it could grow to 220 events and 701,000 people if it's expanded.

Expanding the convention center should also be a part of the discussions on the future of the Bradley Center and/or a new Bucks Arena. The case in Indianapolis tells me that perhaps one of the current facilities in the Wisconsin Center District could be considered for remodeling and/or re-use to solve one of these concerns. The recent news that U.S. Cellular is pulling their naming rights (and revenue) from the former MECCA also seems to indicate there could be some synergies to gained out of what is a growing number of needs for downtown Milwaukee facilities. And it could lessen the tax blow from the smaller projects before we start talking about "the big one"- which would be the new Bucks arena.

The cheese is definitely binding when it comes to this topic, and we should make sure we know of all the options that are out there before a plan gets railroaded by us. The last week's developments have provided some additional insight and experiences that we should not ignore.


  1. If we need to get a master plan for the district under way that considers all these things, we could do a lot worse than to get Bob Greenstreet and the School of Architecture involved.

  2. Interesting idea ZRM. I'm starting to think some remodeling if present facilities may be in order as part of this. And obviously, location and setup of the new Bucks arena should be a step taken along with the plan to pay for it- so we can see what options fit that kind of structure/ development