CHICAGO — Investment banks interested in working on Wisconsin's financing for a new $500 million Milwaukee Bucks professional basketball arena have until Sept. 1 to submit their qualifications, as officials want to get the deal done by the end of the year.
The state capital finance office, working on behalf of the Wisconsin Center District that will serve as borrower, published the
The banking team would "assist with the development of a financing plan which provides" up to $203 million of proceeds and to assist "the district and other engaged parties in completing lease and other related agreements that will exist between the district and the Milwaukee Bucks."
The state will establish a committee to review qualifications submitted and will provide the district with the findings and recommendations of this committee. The district expects to name a financial advisor or advisors and bond counsel prior to the deadline on investment banking RFQ deadline to assist in reviewing those proposals.
The public's share of the cost is $250 million with the remainder coming from the team's current owners and former owner, former Sen. Herb Kohl. Gov. Scott Walker signed legislation that lays out the financing package earlier this month.
Milwaukee will contribute $47 million, some of which would involve a city financing separate from the district's borrowing. The district's borrowing is likely to be secured by taxes it now collects on hotel rooms, local food and beverages, and car rentals to repay $185 million of convention center debt that isn't retired for more than a decade.
"Preliminary financing plans assume that $93 million of proceeds would be available from this revenue stream," according to the RFQ. The taxes generated $29 million last year. The state will also provide an annual appropriation of $8 million, with half coming from Milwaukee County, which could be leveraged to support an estimated $110 million of proceeds. The district's portion of a ticket surcharge which overall is expected to generate $1.8 million could also be leveraged through a taxable series.
"The final financing plan will determine the number of series of obligations that are issued to address different security/pledged revenues and federal tax law determinations," the RFQ reads. "Repayment of all obligations in the shortest term possible is one goal of the public financing for this project."
The district is aiming to get the deal done this year, and the RFQ also notes that the district is discussing expansion of the existing exposition center and bankers should take that into consideration as they craft they submit their qualifications.
Under the legislation, the WCD's powers are being expanded from managing the city's convention center to include the new arena. Milwaukee Mayor Tom Barrett, council leaders, and Comptroller Martin Matson sent letters to Walker urging him to send all the money from the ticket surcharge to the district, but he refused. The surcharge was added to the bill as a means to help win passage during legislative negotiations.
"The district is the entity that needs this money," officials wrote. "Additionally, splitting the revenue between the District and the State unnecessarily increases finance expenses and complicates borrowing for the project."
