Monday, June 1, 2015

More Bucks updates and reading

Wanted to add a couple of added bits of reading on the Bucks arena situation from today. First of all, despite Bucks President Peter Fegin's promise from last week, there was no new deal announced over the weekend, and there doesn't seem to be one being finalized today. In fact, there hasn't even been a Joint Finance Committee meeting scheduled for this week, indicating that talks on both the Bucks arena and the Transportation budget are ongoing. And if this tweet from David Ade of Channel 58 in Milwaukee are near true, this Bucks arena is going to be a serious holdup if it's included in the state budget.

Ade then went into further detail on CBS 58's website tonight, noting that the entire budget could get tanked if the Bucks bill is part of it.
Monday two different sources told CBS 58's David Ade; at least two Republican senators are prepared to become part of the roadblock to a Bucks arena funding plan. Sources say many legislators are upset a Bucks arena plan is included in the state budget, and want it to be removed so it can be taken up as a bill of its own.

One of those sources gave details saying at least two, but as many as five Republican senators are prepared to vote against the entire state budget if a Bucks arena plan is included. Currently, Republicans control the State Senate 19-14. All 14 Democrats are expected to vote against the budget. If three or more Republicans join them, then the budget would not pass the Senate.

Sources say legislators outside of Milwaukee simply don't care if the Bucks get a new arena, and are facing pressure from constituents to oppose it.
It's not like there's a lot of up-front money that's required from the state to have the Bucks arena get started, as the state would reportedly only pay $4 million a year from the designated "jock tax," so that's $8 million over 2 years in a budget of $33 billion in General Fund money. Something could logically be adjusted at a later point in the 2015-16 or 2016-17 fiscal year to make up that difference, and since the City of Milwaukee would not likely vote on its part of the financing package until later this year (maybe as part of its budget in November), there's no immediate urgency to have a Bucks bill become law by the end of this month.

The flip side is that turning the Bucks arena bill into a standalone item means that it becomes a lot easier to shoot down. It may be difficult for some GOP members of the Legislature to hold up an entire budget filled with kickbacks to donors numerous other policies that they do approve of, but they can show off to their non-Milwaukee constituents if they vote against a standalone Bucks bill. Having the Bucks vote after June would also place it closer to the November 2016 elections, and after this unpopular budget, some GOPs will very unlikely to want to anger the voters further with another controversial vote on this issue. Of course, maybe there are enough votes from Milwaukee-area Dems to help push a Bucks bill over the top, as opposed to if it's done as a standalone, as opposed to being included in the anti-Milwaukee state budget (which no Dem will vote for).

Of course, having the Bucks bill as a standalone also allows more time for it to be analyzed, and likely to be exposed in ways that the Bucks arena proponents don't want it to. Bruce Murphy had a good follow-up today in Urban Milwaukee going over the recent events, discussing Dan Bice's recent rundown of the bill, and how the changes in the Bucks arena bill shifts a lot of the burden onto taxpayers in the City and County of Milwaukee.
The original plan called for the state to issue $220 [million] 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.
Murphy adds that there isn't any clarity over whether the Bucks arena and the nearby projected development is supposed to stay property tax-free, as it was in Walker's original bill. Murphy also rehashes other items from his excellent rundown in April which discussed the numerous tax write-offs and other hidden subsidies that Murphy estimates to reach over $1 billion while the arena is in existence. However, that number may be reduced some if the rumor of a $12 million TIF from the City of Milwaukee is correct, as that implies some of the "sports and entertainment district" will NOT be tax-free (can't do a TIF if the property isn't taxable). The new Bucks arena bill will have to at least define which areas of the development would or would not be taxable, and that may drive some serious debate from the Milwaukee Common Council and Mayor Barrett's office as they decide whether they want to formally sign off on their side of the agreement.

Needless to say, a lot more needs to be ironed out on this Bucks bill. This is true both behind the scenes at the Capitol, and once an amended bill is finally printed and available to be voted on. It looks like things are a lot less certain than the Bucks and their cheerleaders at JournalComm were letting onto last week when it comes to figuring out how to pay for a future arena in Milwaukee.


  1. Off topic but related reading.

    "Why Would the State Give $220 Million to Someone Whose Company is Destroying Milwaukee Neighborhoods?
    Common Ground shines a light on Wesley Edens’ crumbling foreclosures

    On a cold Thursday morning in Milwaukee, over 30 Common Ground leaders, students, and neighbors held a press conference in front of a crumbling duplex on North 44th St. No one is paying taxes on the vacant building, and it has 23 code violations. It is only one of 300 foreclosed properties controlled by Nationstar Mortgage.

    Wesley Edens owns the majority of the stock and is Chairman of the Board of Nationstar Mortgage Company. According to a plan Governor Walker announced Tuesday, Edens is about to receive $220 million in Wisconsin taxpayer dollars to help him build an arena for another of his properties, the Milwaukee Bucks."

  2. The biggest issue no one is talking about is that the $500-million arena project includes a separate "entertainment" mall. It will be built with public money and managed by a state entity and include a massive outdoor sports bar. It would be tax-exempt as part of the arena.

    The Bucks also want to be master developer for 30+ total acres--additional development that may or may not be taxed--but this bar mall is absolutely part of the basic arena project. A state-owned bar mall is so outrageous many just try to deny it's happening. But a state senator's aide confirmed that as of 6/1 it's still in the funding plan.

    Mayor Barrett and Exec Abele are all in. A $25-million city-owned parking structure would be torn down to make way for the bar mall. The new "Tom Barrett Parking Garage" (as JS staff are calling it) would be built for $35M a block away. That's how billionaires roll, not broke governments.

    Citizens need to insisting on funding schools, parks, health care, etc., not bars.

    1. I've talked a lot on these pages about the property tax exemption that's part of any "ancillary development" with the arena , because I think that's the worst part of the legislation. Local governments like the City of Milwaukee can't raise their own sales tax to increase tax base, so they have to get it off of increased property values. Taking that ability away makes the project idiotic from a local government point of view.

      Interestingly, Sean Ryan has an article in the Milw Biz Journal today that indicates the new developments are not a "bar mall" and would not be tax exempt.

      Something doesn't add up here, and we need to see a modified bill on paper alongside the complete plans

  3. More related reading: