CHICAGO - The Wisconsin Assembly will take up on Tuesday a plan that provides $250 million in public funds for a new Milwaukee Bucks arena.
The Senate recently signed off on the compromise plan in a 21-10 vote after it was pulled from the state budget package. Republicans who control the Assembly say more than a dozen Democratic votes are needed but signaled their confidence in reaching that threshold by Tuesday.
The financing plan was crafted with the support of Gov. Scott Walker, city and county officials, and team owners. Walker has warned that without public help for a new arena the National Basketball Association franchise will leave the state taking with it tax revenues generated by the team.
A $2 surcharge on ticket sales was added to help cover the public's share of the tab with a portion going to the state and the remainder going to pay down debt on the arena instead of operating costs where revenues generated from the same surcharge on tickets at the BMO Harris Bradley Center now go.
The new arena would replace the Bradley Center.
"Today's vote is a significant step forward in our collective effort to build a new sports and entertainment district in Wisconsin," Bucks president Peter Feigin said after the Senate vote. "We're optimistic that this financing package will receive support in the Assembly and look forward to working with state, county and city officials."
The financing plan relies on a mix of borrowing and other funding from the state, the city, Milwaukee County, and the Wisconsin Center District, which manages the city's convention center.
The other $250 million comes from the Bucks' current owners , Wes Edens and Marc Lasry, and the previous owner, former U.S. Sen. Herb Kohl, D-Wis. The public support is capped at $250 million, requiring the team to cover overruns and the public funding must be repaid if the team is sold.
The Republican governor, who recently launched his presidential bid, has sought to make the case with hesitant lawmakers that the deal preserves state collections of income taxes on visiting NBA teams, economic activity spurred by the team, and eliminates the public expense of maintaining the team's current home. Walker put a 20-year price tag of $419 million on the potential lost revenue if the team moves out of state.
"It truly protects the taxpayers this is a good deal for lawmakers anywhere in the state," Walker has said. "If we do nothing that revenue goes away."
Under the plan, the Wisconsin Center District's powers would be expanded from managing the city's convention center to include the new arena. The state would provide an annual subsidy of $4 million annually over 20 years for a total of $80 million.
In addition to the state's $80 million contribution, the county would also provide $4 million annually for a total of $80 million, the city would provide $47 million in tax-increment financing support, and the Wisconsin Center District would issue $93 million of new debt.
The district was created in 1994 and collects taxes on hotel rooms, food and beverage sales at restaurants, and car rentals go to repay a $185 million bond issue for the convention center. The $93 million would be repaid with those taxes. The district could issue additional debt leveraging the state and county's annual subsidy. Officials said the state and county subsidies could each be leveraged to generate $55 million in additional borrowing, bringing the total possible bonding for the project to about $200 million.
