CHICAGO — A financing package that relies on $250 million of public support to build a new $500 million arena for the National Basketball Association's Milwaukee Bucks is headed to state lawmakers.
The revised financing deal 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.
Gov. Scott Walker was joined Thursday by the legislature's GOP leaders, Milwaukee Mayor Tom Barrett and Milwaukee County Executive Chris Abele to unveil the agreement, reached after weeks of negotiations. Barrett, a Democrat who ran against Walker, called the package "responsible to the taxpayers."
The Republican governor 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 — the BMO Harris Bradley Center. 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 said at a news conference Thursday. "If we do nothing that revenue goes away."
Barrett said the city's contribution of $47 million is close to the level it provided to help finance the Bucks current home.
Lawmakers will decide on legislation authorizing the ongoing collection of taxes that currently go to repay debt issued to finance the city's convention center to repay some new debt tied to the project.
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 rental 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.
Walker and legislative leaders said they are hopeful the plan will pass but acknowledged that not all lawmakers are on board and it could prove a tough sell. It's unclear whether the measure would be included in the two-year budget pending before the legislature's Joint Finance Committee.
Some Republican lawmakers are demanding a separate vote on the arena plan either as its own legislation or a budget amendment, given the partisan divide over the Republican-written budget that minority Democrats are expected to vote against.
Opponents also question why the state is providing support for the project while looking to trim spending to balance the next budget, including deep cuts slated for the University of Wisconsin system.
Walker defended the deal, saying he didn't think there was the will among public leaders or taxpayers to raise new taxes to fund the project, and stressing the potential lost revenue as the key selling point. Sales tax hikes were levied to help finance new stadiums for the Green Bay Packers and the Milwaukee Brewers.
"There's a pretty compelling case" to support the project, Walker said.
Walker earlier this year unveiled a financing package that called for the state to sell an appropriation-backed issue of up to $220 million that would be repaid with growth in income taxes expected from Bucks players, team employees, visiting teams, and media contracts. That plan ran into a legislative roadblock, prompting the negotiations that led to the new proposal.
Walker is trying to get an arena deal and budget locked down as he prepares to formally launch his expected 2016 bid for the Republican presidential nomination.
