Monday, September 21, 2015

Bucks, Packer stadiums both get big votes this week

This will likely get lost in the fallout from Scott Walker being Gov Dropout again, but tomorrow’s a big day for the Milwaukee Common Council. As part of their regular meeting, they get to vote on the city’s funding plans for the Bucks arena and the nighlife district around that facility. To review, the arena is slated to be built just north of the current Bradley Center, which will then be demolished and made room for arena-related development and pedestrian areas. This would be the final piece of the puzzle that would allow construction to start, along with the changes to the city landscape in that portion of downtown Milwaukee.

However, those changes may not happen as fast as originally thought, as Bucks officials mentioned last week that the team may not be playing in the arena as early as expected. The Milwaukee Business Journal’s Rich Kirchen interviewed Bucks part-owner Mike Fascitelli, who said it was unlikely that construction would begin on the project until next Spring, which means it’s probable that balls wouldn’t be bouncing on the new arena’s floor until the 2018-19 season.
"We want to be in there and play and open up the 2018 season in that arena," Fascitelli said in response to a question on when construction will start and when the arena will open. "So that’s October of ‘18. So we’ve got to get everything ready and start construction."

Until Fascitelli’s remarks Tuesday, Bucks executives had maintained the team still planned to break ground this year on the $500 million project. Fascitelli says the arena will take about two years to build.

“We’re shooting for the ‘17-’18 season but I’m telling you the reality is we’re going to get it in for the ‘18 (through spring 2019) season,” Fascitelli said. “Practically speaking with everything we have to get done it’s going to be difficult."
Kirchen’s article goes on to say the delay is due to team officials waiting on the City of Milwaukee to agree on its part of the project, and then having to finalize the arena’s design. The Bucks also have to work out a development and lease agreement with Wisconsin Center District

A big loser from a one-year delay in the arena might be Milwaukee County, who is taking on shared revenue reductions of $4 million a year from the state to comprise its "contribution" toward the Bucks arena. If the new arena doesn’t open till 2018-19, that means the county will be losing this $4 million for the better part of 3 years before this building opens, and the county would conceivably start to have added sales tax revenues as a result of more people visiting and spending money to attend events at the new arena. It also means the Wisconsin Center District and State of Wisconsin will lose out for a year on their respective portions of the $2 million to be generated by a $2 ticket tax (item Number 1 in the LFB summary of changes to the Bucks bill from July), and this would place an extra burden on the WCD in particular, as they are taking on much of the debt involved in this facility.

And just because the arena project is heading toward likely passage in the Milwaukee Common Council tomorrow, that doesn’t mean city alders aren’t asking questions and asking for some modifications to the team’s plan. In the City’s Zoning, Neighborhoods and Development Committee, alder Bob Bauman expressed concern over the lack of specific detail Bucks owners were giving about the team’s plans for the “live block” near the arena, and got a handful of amendments approved which changed some specifics on the development part, while still allowing the arena to be constructed.

One of these would keep 4th Street open to traffic between Juneau and Highland on non-game days, which is something the Bucks wanted closed off and turned into a full-time pedestrian block. The Milwaukee Business Journal explains the others.
In addition to the Fourth Street amendment, the amendments include a requirement to hire 40 percent of arena-related construction workers from the city of Milwaukee and shifting any naming rights revenue from a new parking garage to the city from the Bucks.
Building that new parking garage is part of the city’s $47 million in contributions toward the project, and (from what I can tell) the Bucks still stand to split all parking revenue from that garage with the City on a 50-50 basis.

The lone opposing vote on the amended Bucks arena project in both the Zoning and Finance Committees came from Alder Nik Kovac. Kovac is a massive fan of the publically-owned Packers who hosts a weekly Packer talk show on Riverwest Radio, (disclaimer: I consider Nik a friend and have appeared a couple of times on this show), and has connected the Packers’ ownership model and sports together frequently on “Packerverse”. Ald. Kovac used the word “charity” in describing the form of the City’s contribution to the Bucks arena, and argued that the city should share in any profits that the Bucks will get from the facility as a return on the city’s subsidy for the project.
Kovac opposed the funding package, saying he believes the agreement should include a requirement that taxpayers receive a payment from the Bucks if the team’s value increases.

“I’m rooting for them — I want (the Bucks) to increase in value,” Kovac said. “I want Milwaukee to have successful businesses. But I would like there to be some mechanism...for not just the city but the county, the (Wisconsin) Center District and the state to potentially get paid back. That way we would be actual investors.”
Kovac’s comments are especially interesting to note when you compare the Bucks legislation with the bill that’s making its way through the State Legislature on another pro sports facility- the Lambeau Field renovations and the 0.5% sales tax that was instituted in Brown County to help pay for it.

Senate Bill 233 has to do with the 0.5% sales tax that’s been levied on Brown County"since 2001 to pay for renovations to Lambeau Field and the nearby Brown County Arena. The debt for those projects has now been paid off, and there are sufficient reserves to end the sales tax at the end of this month.

With that in mind, much of the Green Bay-area GOP contingent in the Legislature proposed a bill that would take this extra money and give it to the numerous local communities in the county. As the bill explains, the estimated $17.6 million that this would entail gets split up as follows.
1. Twenty−five percent of such taxes to Brown County.

2. Seventy−five percent of such taxes to the cities, villages, and towns in Brown County in proportion to the population of each such city, village, and town in the county compared to the county’s entire population (for example, this means the City of Green Bay would get nearly $5.46 million, De Pere $1.26 million, all the way down to the Town of Glenmore, who gets just over $58,000) ….

(b)1. Brown County shall deposit the revenue received under par. (a) 1 into a segregated account established and controlled by the county to use only for the purpose of redeveloping the Brown County arena and land on which the arena is located. The county may not make expenditures from the segregated account unless the county board adopts a resolution specifying the purpose for which the revenues will be spent and the amount of the revenues to be spent for that purpose.

2. Each municipality that receives revenue under par. (a) 2. shall deposit the revenue into a segregated account established and controlled by the municipality to use only for the purpose of providing property tax relief, tax levy supported debt relief, or economic development. A municipality may not make expenditures from the segregated account unless the municipality’ s governing body adopts a resolution specifying the purpose for which the revenues will be spent and the amount of the revenues to be spent for that purpose.
So it’s not really a block grant for the municipalities, but instead has to held to those specific needs. That being said, there’s nothing stopping these communities from using funds that would have been used to pay off debt or TIFs to instead be used for other purposes, so that’s probably not as restrictive as it sounds.

This bill made it to the State Senate floor this week, where some Senate Dems (including GB Senator Dave Hansen) proposed an amendment to this payout into a tax rebate for the citizens of Brown County that was estimated at $70 a person or $135 a couple. That amendment was denied, with the Senate then agreeing 31-0 to pass the bill in its original form, giving the $17.6 million to Brown County local governments.

The bill now goes to the Assembly, where the Ways and Means Committee will hear it on Thursday. If that passes, it’ll head to the full Assembly, perhaps later this month, and if it goes through there, there should be plenty of time for the money to go out in November and be included in 2016 local budgets.

So it's interesting to see the contrast in these two bills, where the Green Bay-area legislators want to return the tax funding to the local areas for redistribution, but there are no such provisions in the allegedly socialist/liberal Milwaukee for the Bucks arena. Let's see how these two bills proceed in this week, and if these bills stay as-is.

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