Sunday, July 3, 2022

For Brewers future - it's the LAND, not the ballpark. City/County deserve a better deal on that.

(We begin this post with a punny paragraph of hackneyed sports metaphors).

As we near the 4th of July, it is the traditional time of the baseball season to evaluate where a team stands, and the intensity of pennant races often start to ramp up around this time.

With the first-place Milwaukee Brewers, things will not only heat up on the field, but also in the team developing the ways they can maintain and upgrade American Family Field in the near future.

A top Brewers’ exec discussed the situation with reporters recently in Milwaukee, along with the possibility of using a “Beer District” to help pay for future fixups at the ballpark.
Earlier this month, a Milwaukee County Board supervisor submitted a resolution calling for the Southeast Wisconsin Professional Baseball Park District to work with local officials to explore the possibility of creating a nearby entertainment district.

[Brewers President of Business Operations Rick] Schlesinger pointed to the Deer District in Milwaukee and Titletown near Lambeau Field in Green Bay as successful examples of similar developments in Wisconsin.

“Not only does it have to co-exist with the prime goal of the ballpark, which is to provide a beautiful place to go to a baseball game, and to provide tailgating opportunities for our fans … but it has to make sense within the neighborhood, and it has to make sense economically for us,” he said.

Schlesinger said a stadium needs assessment report, conducted by Venue Solutions Group, is expected to be complete this summer. He expects it will highlight a funding shortfall, but declined to speculate on a specific number as the report is still in progress. He also noted the Brewers don’t want to bring back the five-county sales tax that generated over $600 million before ending in 2020.

“We don’t need the five-county tax back,” he said. “There’s other solutions that I think can be creative that require a lot of different analysis … so I don’t look at the retirement of the five-county tax as this horrible disaster that has now created this huge problem. The reality is, we have to be creative in how we fund what we need.”
Here are Schlesinger's full thoughts at the event. He mentions price tags of $435 million over 15 years to renovate Cleveland's stadium and more than $600 million needed for Baltimore's Camden Yards.

But Urban Milwaukee's Bruce Murphy noted that there was a problem if the City or County of Milwaukee gave the green light to some kind of "Beer District". Murphy says such a move could actually could be counterproductive for the team, because it already enjoys a great deal on their property, and doesn't need a TIF exemption because they don't pay taxes on the property anyway.
....the entire idea is based on a misunderstanding of just how all-encompassing the tax exemptions granted to the team are, something only Urban Milwaukee has reported. The stadium and all 265 acres leased to the Brewers are tax exempt, which has tremendous value for the team. Over the presumed 40 year life the stadium, (though it could last longer), the exemption on the stadium will save the team nearly $217 million in taxes and the exemption on the land will save the Brewers $483 million.

But that’s not all that is exempt. The state law funding the stadium includes a property tax exemption that “is very broad,” noted Ryan LeCloux, of the nonpartisan Legislative Reference Bureau, when asked by Urban Milwaukee to analyze the law. The property that is exempted “includes but is not limited to: ‘parking lots, garages, restaurants, parks, concession facilities, entertainment facilities, transportation facilities, and other functionally related or auxiliary facilities and structures,’” LeCloux noted.

“Because of this, a hotel developed on the stadium property would become ‘property consisting of or contained in a sports and entertainment stadium’ and not subject to taxation,” he explained. As for, say, building an apartment complex on the land nearest to the Menomonee River, that, too, “would fall within that exemption,” he said.

Moreover, should the Brewers work with another developers to build any such facilities they would still be tax exempt: “leasing or subleasing the property; regardless of the lessee, the sublessee and the use of the leasehold income; does not render the property taxable.”

With a tax exemption that sweeping, why would the Brewers want to make some of its land taxable, in order to generate funding from a TIF district that would then be paid back through future property taxes paid by the team? As a top local developer told me, no TIF or other such deal would compare to a total property tax exemption: “If you can develop without any tax liability, that is the best-case scenario.”
To review, here's what the Brewers have right now. It's the ballpark, the parking/tailgate lots, and some land east of the east lot toward the Menomonee Valley.

But what the Brewers need is a method to pay for upkeep and repairs to Miller Park AmFam Field, and the surrounding area. So if I am the City of Milwaukee and I am saddled with a bad deal that keeps the City from getting property taxes from the land around the ballpark and the related development, here's what I try to get the team to agree to.

1. The Brewers are allowed to develop the area, and get income from the properties, which goes to fix up the ballpark. But all development is overseen and has to be approved by city officials as well as the SE Wisconsin Ballpark District that previously oversaw the Miller Park tax and the improvements it funded.

2. In addition, all properties in the "Beer District" and at the ballpark itself pay an extra sales tax of 2-4% that doesn't apply to other parts of the City or County. This will also help pay for infrastructure within the district and the ballpark itself. It's similar to how Minneapolis put together a downtown district that helped to pay for the new Vikings stadium and convention center upgrades (among other things).

2a. Maybe have the Brewers trade the land east of the stadium in favor of the team getting land north of the stadium as part of a plan that would turn the Stadium Freeway (Highway 175) into a street-level road where businesses could be developed and accessed. Schelsinger also mentioned that this could be part of increasing the entry-exit areas for the parking lots (which sure would beat sitting in traffic for 30 minutes after a game).

The other option would be to hardball the Brewers, which would come from 2 levels of government.

1. The first would be through the state signing new legislation that makes part or all of the Brewers' land and ballpark subject to property taxes. That's quite a tax bill that they would have to pay each year, but it would give a property tax cut to a lot of Milwaukeeans (since they don't take up as much of the tax base). These added property taxes could also be added to the City's revenue limit, which would allow it badly needed resources to pay for the many services that are offered in Wisconsin's largest tourism center.

2. The state could also allow clarify that the Brew Crew must pay something to Milwaukee, but is solely for the Brewers to develop. They could include a requirement that the Brewers and the City work out an adequate annual payment (say $3 million to $5 million. Or more) that goes to help the City pay for the extra services and infrastructure required for the ballpark and its adjacent properties.

2a. There also could be a clause that says if the team sells off property to someone else (for a business or some other use), that property then is subject to property taxes, instead of being permanently off the tax rolls.

That's just me throwing stuff against the wall, but you know the issue is going to get more urgent as the 2020s progress, the now 21-year old ballpark ages, and the Brewers' option to renew their lease looms in 8 years. And if I'm running for state government this Fall, I'd start talking about the issue, either as a way to ensure that the Brewers stay around, and/or as a way to make a stand against such giveaways and try to recoup some of the benefits that have been given to Milwaukee sports teams (and other big businesses) over the last 25 years.

Look, I want to keep going to Brewers games like I have for 42 of my 47 years on this Earth. And few places in the City draw out-of-towners like AmFam Field does for 85 or so dates every year. But there also needs to be some leveling of the deal that has given a lot to the Brew Crew, and in a resource-starved area like Milwaukee, there comes a time when you can't continue to keep the giveaways going in the hope that they money will come back....some time. Maybe.

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