Wednesday, October 11, 2023

Brewers bill in need of changes, development. Let's see if that starts tomorrow

After a public hearing last week, it looks like the Wisconsin Assembly's Committee on State Affairs is going to try to push through the Brewers Stadium bill tomorrow.

And even in last week's public hearing, we got indications that there will be at least some changes to the bill when that committee takes it up. Particularly involving how much the local goverments might pay toward future AmFam Field repairs, and the possibility of development around the stadium.

Milwaukee writer Dan Shafer recently made a comparison between the Brewers stadium bill and the Bucks' arena deal in 2015. Shafer points out that while the City contributed a lot in rebuilding and improving the area around FiServ Forum, it also got a payoff in the form of large-scale development in that part of downtown.
For Fiserv Forum, the City’s portion of this deal was significant. It was the final linchpin making the larger agreement possible, and it passed the Common Council with a 12-3 vote. This was done through tax incremental financing (TIF), a common development tool utilized by the city to borrow against future projected property tax revenue to fund new projects. This TIF plan included $35 million in funding for the construction of a new parking structure at 6th and Juneau, with revenue being split 50-50 between the city and the Bucks. It also included $12 million toward building what is now the Deer District, which also involved closing one block of then-4th St., now Vel R. Phillips Avenue, and taking down a city-owned parking lot to free up space for the new developments.

While the overall funding level is greater for the AmFam Field deal, there is no equivalent to the City’s development portion of the Fiserv Forum deal. Unlike the stadium or arena themselves, which are property tax exempt, the Deer District and other ancillary developments are now generating property tax revenue for the city of Milwaukee, which will repay the initial investment made through the TIF agreement (kind of like a loan), and will eventually be funding the city’s budget....
Shafer goes on to say that the FiServ deal offers a good template for the Brewers and the state to work off of for AmFam Field's future.
....the state owns this ballpark. That is an obligation we have, and there are costs to be incurred regardless of whether or not the Brewers extend their lease beyond 2030. And the Brewers do provide a real benefit to the region, and the Milwaukee area would be worse off without them. To reiterate: I want the Brewers to stay in Milwaukee for the long term.

So, the bottom line, then, is this: A deal to keep the Brewers in Milwaukee can and should get done, but it needs to be done right. You only get one chance to do this right. Luckily, we have this very recent local example of how an arena funding package can be done right. The deal to fund Fiserv Forum has been a successful one, and an example of how a sizable state investment in an arena or stadium can be leveraged for meaningful transformation, catalytic impact, and the type of regional economic development often touted as a reason to make deals of this nature in the first place. What we need to do is learn from this very recent history to inform the negotiations and conversations in the present.
But at last week's public hearing, Brewers president of Business Operations Rick Schlesinger didn't express support for denser development near the ballpark, or in using a ticket tax to help fund repairs to the ballpark (which was also part of the package that paid for FiServ Forum). And Schelsinger gave some lame reasons in the process.

How would having ground-level development in the back of the parking lots cause a problem with trying to get out of the remaining lots? It would probably allow for more exit points and improve traffic flow, especially if the freeway spur around the Stadium is brought down to street level. And while I agree that affordability is a concern with pro sporting events in general, I don't see where an extra $1-$2 per ticket would make much of a difference when it comes to someone deciding to attend a Brewers game. And given that it could replace local or state taxes that would be getting paid into the stadium.

Urban Milwaukee’s Bruce Murphy (an avowed opponent of stadium subsidies) recently gave a list of 9 reasons why this stadium bill is struggling, and the final 4 of those reasons seem to best explain why the bill needs fixing.
6. Politicians Are Negotiating With Themselves Rather Than The Team. Evers’ plan cost $290 million [in state dollars only] and was expected to grow with interest to $378 million before it began being spent. Even at $290 million, it was estimated as the biggest per-year MLB lease subsidy in history by Neil deMause, whose website Field of Schemes tracks all pro sports subsidies. And the Brewers were happy with the deal. Yet the Republicans decided this wasn’t enough and created an even more expensive package. That’s going to make it harder to sell to voters.

7. Milwaukee Can’t Afford to Pay $200 Million. The law requires $2.5 million per year from the city and $5 million from the county, for a total of $202.5 million over 27 years. But both have just been rescued from fiscal insolvency by a legislative plan Republicans signed onto, after having been given profuse details on Milwaukee’s plight. And the city’s situation, even after getting a 2% sales tax, has just worsened: as the nonpartisan Wisconsin Policy Forum found, Milwaukee now faces an annual budget gap of $35 to $45 million beginning in 2025.

It’s clear the Republicans understand the situation. Rep. Robert Brooks (R-Saukville), their point man on the Brewers bill, said ”I don’t want (local) service cuts to pay for the Brewers,” saying the $7.5 million was just “a placeholder” and might be reduced to $5 million. The clear implication is that Republicans need to find some way to make it look like Milwaukee is paying much of the cost, so they can tell their constituents this. That’s also one of the reasons Vos objected to Evers’ plan, which had no cost for Milwaukee. But threading the needle of making the local cost both affordable and yet significant is looking pretty impossible. And even if Milwaukee does pay big, the proposal’s $400 million in state money may still anger outstate voters.

8. The Brewers Won’t Do Any Development. Mayor Cavalier Johnson (and probably Milwaukee County Executive David Crowley) would like to see some development around the stadium. It might be a fine area for a hotel, apartment complex and restaurants along the Menomonee River, which would normally generate property taxes for both the city and county. Except that the land and any developments are currently exempt from property taxes and the Brewers aren’t likely to support paying any taxes on it. Moreover, they’ve repeatedly indicated they have little interest in doing any development.

9. Winterized Stadium May Increase Costs for Taxpayers: This, too, wasn’t included in the Evers plan the team fully supported. It’s another Republican add-on with a cost of $25 million that would allow the Brewers to make more money by hosting concerts and other events throughout the year and would include a ticket tax on non-Brewers events to help pay for the winterizing. But Brewers Business Operations President Rick Schlesinger reacted negatively to the ticket tax. At this point the idea looks like yet another cost for taxpayers with all the benefits going to the Brewers. The more state officials mess with the stadium deal, the higher the costs get.
Which is why I think a more workable deal should include at least the following 2 modifications.

1. A condition of the new lease that includes the team giving up some of its parking lot space, which allows for more development in the area (likely east and south of the ballpark). Much like FiServ Forum, perhaps the City/County’s share can be done in the form of added infrastructure for this new development.

2. A ticket tax that takes the burden off of taxpayers living in both the City and County of Milwaukee, and spreads it out more to people who attend events at AmFam Field.

Sure, the Brewers may not like that, since it takes away some of their parking revenues (although I’d like to have an audit tell me how much), and they may feel they have to raise ticket prices to offset the ticket tax (but is that really going to affect attendance much? I bet not).

Even with these changes he Crew would still be getting a really good deal - paying a pittance of the market value of the rent of this state-owned facility and most of its land , and keeping all of the money generated from concessions, parking, and tickets for games.

But like a lot of things, Robbin’ Vos and the Assembly Republicans have gotten out over the skis with their hubris (it's worth noting that in the introductory media event for this bill, the only legislators present were 2 Assembly Republicans, 1 Republican State Senator, no Democrats, and no local politicians). Now Vos and company need to be reigned in and brought back to reality by the Governor, the team, and likely the State Senate.

It's unlikely that this bill can get to Governor Evers' desk with Republican votes alone, so there needs to be open input and a lot of improvements to this bill before that happens. Let's see if that starts tomorrow at the Capitol, and see who ends up paying more and who might not pay as much under whatever changes get made to the Brewers bill.


  1. It's weird to say this, but I believe the taxpayers will be much better served in the long-run by the Brewers not going anywhere in the playoffs this year. If they'd made it to the World Series or close, I think there would have been this overall 'high' that would have potentially lead to less-considered and less-smart negotiation for the final deal. Painful if you're a fan, but as a taxpayer too, it may not have been the worst timing in the world.

  2. I think you're correct, in that things would be a lot more charged up right now if it was the Brewers that knocked out the Dodgers last night, and not the Diamondbacks. And that some people would get carried away.

    13-1 vote in the Assembly's State Affairs Committee that lowers the City's and County's shares ($67.5 million each), and it also includes this creative mechanism where the fee that the Wisconsin Dept of Revenue gets on sales taxes gets cut from 1.75% to 0.75% (basically all sales taxes go to the DOR, and then they send the remaining funds to the counties after taking this admin fee).

    Nice boost for a lot of counties in Wisconsin, and a lower annual payment from the Milwaukee local governments. No ticket tax as of this time, however, and it looks like the state contribution is the same at $411 mil. I also see quotes from Dem Assembly Leader Neubauer indicating the she likes the changes.

    Looks like full Assembly would vote on it on Tuesday the 17th. We'll see if there are other adjustments as this moves along.