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It was time to strap on my hiking boots and head for the Menomonee Valley. My destination was Miller Park, our shining new stadium, which I had asked and begged and pleaded to tour, only to be refused permission. Me! A veteran reporter, a husband, a dad. Somebody up there doesn’t like me. Namely, the […]

It was time to strap on my hiking boots and head for the Menomonee Valley. My
destination was Miller Park, our shining new stadium, which I had asked and
begged and pleaded to tour, only to be refused permission. Me! A veteran
reporter, a husband, a dad.

Somebody up there doesn’t like me. Namely, the entire board of the Miller
Park stadium authority, according to their high-powered PR spokesperson, Evan
Zeppos, who told me there would be no tour for the notorious Bruce Murphy. Wait
till my mother hears about this.

So it was that on an ugly, gray, freezing February day I bundled up and
headed for the Menomonee Valley, reporter’s notebook in hand, to sniff around
for the smell of bratwurst, to see what I could see.

I had always thought that public entities were supposed to be open to the
press, but apparently I was misinformed. When you come to think about it, the
Southeast Wisconsin Professional Baseball District, despite its lofty and highly
governmental name, is really just a front for a very private business – the
Milwaukee Brewers. The district collects our sales taxes; the Brewers spend them
on a state-of-the-art ballpark.

“It’s huge. Awesome,” one season ticket holder who got the Miller Park tour
told me. “Fantastic sightlines,” noted Mayor John Norquist. “It’s stunning,”
said stunned Norquist spokesperson Steve Filmanowicz. “One of the most beautiful
pieces of architecture I’ve ever seen,” gushed stadium authority board member
Mikel Holt.

Yes, everybody’s had the tour but me, which is why I was driving down 32nd
Street, my favorite shortcut into the valley. I parked my car and started hiking
across the frozen ground through the industrial wasteland of abandoned factories
and rusting railroad cars, scrap metal and wood piles. There’s nothing more
poetic than a self-guided sneak tour.

In the distance loomed the forbidden facility, the secrets of Miller Park. I
hiked beneath the 35th Street viaduct and ran smack into a cyclone fence about a
quarter-mile long barring the way. What to do?

I circled around an abandoned railroad service building and voilà – there was
the entrance to the unpromised land, an access road leading to the parking lot
east of the stadium.

Approaching it, I was flabbergasted by the relative size of the new facility.
Sad old County Stadium was still standing, an empty husk, but it was dwarfed by
the epic reach of its replacement. This is no ballpark, I realized, it’s an
edifice, a coliseum, a towering monument to the economic realities of baseball.

Newspaper photos always show the north face of the building and its red brick
retro style, but that homey-looking image has an entirely different and far more
dramatic effect when you take in the soaring green glass walls and the massive
green metal roof.

It was a Saturday, but workers were going at it. Inside the building, some
kind of lights flashed again and again in a strangely inviting pattern. Miller
Park seemed to be winking at me: Come in, come in. Suddenly I felt like Sally
Field. They like me! They really like me!

So maybe they wouldn’t mind if I slipped in and looked around. I walked
through the parking lot and past the Sausage Haus, a little store of sorts for
tailgaters, which, despite its old-world name, looked plain-vanilla, no-frills
American. That must be where they cut some corners for us taxpayers.

From the parking lot, a stairway led to a cute little bridge that led to our
21st century stadium. Taking it, I spied an opening in the fence at the end of
the bridge.

But when I got there, I was greeted with signs screaming, “Miller Park
Construction Personnel Only” and “No Trespassing, Violators will be Prosecuted.”
All that way for this?

Even from here, I could see the nearest seats inside the stadium. They were
green, like the green walls, the green roof – the color of money.

What the heck. I sauntered past the No Trespassing signs and walked along
casually, as though I owned the place. Which, in a way, I do, along with all of
the other taxpayers.

I headed straight for the Palace of Green and found an opening with a perfect
view. I had heard about the size of this 500,000-ton structure but was still
unprepared for its reality. The ballpark and its four neat tiers of seats looked
tiny compared to the monumental roof towering overhead. Above the bowl of the
stadium, three mammoth curves of green metal grillwork, each looking like some
elegantly rounded version of the Chicago el, split the sky into four fields of
gray.

The effect was thrilling, a Field of Dreams played in some vast,
neo-industrial setting. The intimacy of the ballpark seemed perfect for this
famously small-market team, while the vast iron structure of the roof seemed to
echo the industrial heritage of the Menomonee Valley.

“Hey, what are you doing!” A not-very-happy man in a yellow hard hat
approached.

I turned. Should I tell him I’m a friend of Bud Selig? “Oh, hi, I was just
looking.” Lame but true.

“I could call the sheriff,” he glowered, flashing his private-security badge.
“There’s a minimum $425 fine. We just had 20 people picked up the other day.
They’ll handcuff you and take you down to jail.”

It’s at times like this that I wonder why I haven’t secured a nice steady job
in public relations. We walked back to the fence where I entered, with visions
of prison flashing before me, but when we got to the gate, he sort of waved me
on. I couldn’t resist asking. “So you’re letting me off easy because I’m just
one guy?”

“Aw, it’s been a bad day. It’s not worth it.”

Robert Milbourne has seen the future of baseball, having toured all of the
newer baseball stadiums in North America. As executive director of the Greater
Milwaukee Committee, which supported the Brewers’ call for a new stadium, he has
enjoyed the legal tour of Miller Park. “This is as beautiful a ballpark as I’ve
seen,” he says.

Toronto, he notes, also has a convertible roof, but “even when the roof is
open, you feel like you’re inside.”

Miller Park, by contrast, has a wall that opens behind the scoreboard when
the roof is open, giving you the feel of an outdoor stadium. Everything about
the design, I am told, heightens this drama. Rather than the dank, tunnel-like
entryways of County Stadium, you enter Miller Park from an open-air concourse
from which you can see the ballfield. In the stands, all of the aisles run up
and down, so there is never a fat beer vendor or straggling fan blocking the
action. All the seats are angled toward home plate, the distance from the fans
to the field is at a major-league minimum and each tier of seats hangs slightly
over the other. Even the restaurant has a terrace that lips over the field.

“The fans are going to feel much closer to the action,” says Lynn Sprangers,
the Brewers’ bubbly spokesperson. “Even the bleacher creatures.”

Bleacher creatures? Ah, the indignities we slobs who cannot afford the luxury
seating must endure. But I get your point, Lynn. This will be a damn exciting
place to see a baseball game.

With its huge, highly entertaining scoreboard; its sports store, restaurant
and bar; hot corner (where more heat will flow on cold days); and, of course,
the only fan-shaped convertible roof in North America, “My only worry is that
the fans will have so much to do that they won’t be able to watch the game,”
says Milbourne. That could be going overboard.

“I think it will become a tourist attraction in its own right. I can imagine
people wanting to see Miller Park just to see the roof open and close. It will
become another icon for the city,” he predicts.

“It will provide an opportunity for Milwaukee to tell its story,” says Tim
Sheehy, executive director of the Metropolitan Milwaukee Association of
Commerce, one of several community organizations that have loaned or donated
money to make the stadium happen. “As people come here and discover the
Calatrava [addition to the Milwaukee Art Museum] and the stadium, it will have
an impact on the city’s image.”

And just what story will the stadium tell? What will this icon symbolize?
Norquist notes that some observers have suggested that the stadium roof
resembles the crown of the Statue of Liberty. Give me your tired, your poor,
your seekers of bratwurst with secret stadium sauce.

These sorts of metaphysical speculations – about icons and images and the
need to be a modern major-league city – are central to the mythology of the
publicly funded stadium. Years ago, you would hear much about their economic
impact, with a multiplier effect that seemed to stretch to infinity. But not one
person I interviewed made such a claim for Miller Park.

“Research consistently finds that new stadiums do not produce economic growth
in metropolitan areas” was the dour assessment of the City of New York budget
office. “These results imply that stadiums do not lead to increases in tourism,
nor do they serve as a significant attraction to nonretail establishments.”
There was no discussion of their iconic impact, but what do you expect from a
government accountant?

“There’s overwhelming evidence that there is no economic impact,” declares
professor Marc Levine, who runs the University of Wisconsin-Milwaukee’s Center
for Economic Studies. “This conclusion has almost reached the truism of the
Surgeon General’s warning that cigarettes are hazardous to your health.”

So stadiums cause cancer? No, but in Baltimore, Levine claims, hotel usage
has actually declined since the advent of the Camden Yards baseball stadium.
Economists at Johns Hopkins University estimate that Camden Yards generates
about $3 million annually in economic benefits but costs Maryland taxpayers $14
million a year. Ouch.

One thing Miller Park has done marvelously well has been to trigger
opportunities for minority workers. “The project is a model for minority
participation across the county,” says Holt, “with $100 million in contracts for
minority- and women-owned businesses. It has opened the door to hundreds of
minorities in terms of the trades.”

The stadium could also become one link in a chain leading to further
development of the Menomonee Valley. “With Miller Park and the expanded casino,”
says Milbourne, “you have some anchors that could foster more development. The
idea of connecting the valley to Downtown will seem more feasible. The ballpark
and the casino are two huge generators of people that you’d like to bring
Downtown.”

Of course, any plans for transit in this corridor brings up the dreaded
phrase “light rail,” which is a symbol in its own right. A short rail ride
linking Downtown and the Calatrava to Miller Park might connect three new
Milwaukee icons. That’s almost too much to imagine.

With or without rail, the spin-off benefits from the new stadium make for a
short list. Leave it to plain-spoken Milwaukee County Executive F. Thomas Ament
to admit the obvious: “I’m not convinced that Miller Park will have a huge
impact on the city’s image. It will bring in greater attendance, and that will
help the team. And that’s great for the community.”

The success of the modern ball-park is built on a paradox: A smaller stadium
attracts greater attendance. Less is more.

“I call it the Fenway Principle,” says professor William A. Sutton of the
sports studies department at the University of Massachusetts-Amherst. “What is
the capacity of Fenway Park, about 33,000? People plan ahead to buy tickets
because the tickets are scarce. So you get higher attendance and a better
experience for the fan because the stadium is smaller and more intimate.”

Brewers President Wendy Selig-Prieb predicts that the team will attract three
million attendees this year, an average of 37,000 fans per game. That’s an awful
lot of leather spheroid lovers. Only eight teams, all of them in larger metro
areas, averaged that level or higher last baseball season.

The Brewers, however, consider all of Wisconsin their market, and the new
convertible roof, with its guarantee of no rainouts, will encourage more
outstate fans to make the trip. Still, as noted by Amusement Business, a
specialty magazine if there ever was one, even 2.8 million fans is “a very high
ratio of attendance to market, considering the entire state of Wisconsin has
only slightly more than five million people.”

Last year, the Brewers drew 1.57 million. Can they double that figure?
“That’s pretty strong,” says sports economist Jim Grinstead, whose weekly
newsletter “Revenues From Sports Venues” easily beats Amusement Business at the
specialization game. “It depends on their marketing.”

The Brewers, however, have traditionally skimped in that area. “They’re poor
marketers,” says an expert on major-league baseball franchises. “They’re trying
to limit their marketing budget, and that’s absolutely wrong.” Easily said, when
you’re speaking anonymously.

Bad marketers or not, the Brewers have always done well considering their
population base. The team had the sixth-highest penetration of the market among
baseball teams in 1999, which says something about fan loyalty in Wisconsin.
Maybe a big marketing budget isn’t needed. Maybe if you build it, three million
will come.

But just to be on the safe side, let’s imagine that the Brewers only average
2.75 million fans, or just under 34,000 fans per game, in their first year. How
much new revenue will that generate?

According to Grinstead, the Brewers’ annual revenue will increase by $6
million from the luxury suites, $7.3 million from club seats, $2 million from
the naming rights, $2 million from signage (advertising) and $2 million from
additional concession sales. Parking, which the Milwaukee Journal Sentinel
estimated brought in $3.4 million in 1999 (at 1.7 million attendance), is likely
to bring in an additional $2 million. And a new average ticket price of $18
(compared to last year’s $12) for 2.75 million fans (compared to last year’s
1.57 million) means an additional $30.6 million in revenue. If you’re still
counting, that’s a total increase in revenue of $51.9 million. No wonder they
wanted a new stadium.

If Selig-Prieb is right and the Brewers hit three million fans, the revenue
increase (given additional tickets, concession and parking revenue) is likely to
be closer to $58 million. All that from a stadium with a smaller capacity.

Experience and experts suggest that the bump in attendance will last for two
or three years, meaning the Brewers could gain $130 million in new revenue if
they average just under 34,000 fans per game for two-and-a-half years.

So what will the team do with this money?

Years ago, I interviewed Bud Selig in his old office at County Stadium and
was struck by its cramped shabbiness. It looks like a “cheap private detective’s
office,” a writer for The New York Times once razzed.

The luxurious offices in Miller Park will average 400 to 500 square feet of
space per employee – about what you would find in top law firms or the executive
level of banks and corporations. Expect no more jabs by The New York Times.

There is nothing like a huge new revenue stream to spiff up a franchise. As
recently as 1996, the Brewers were selling stock at a price that suggested the
franchise was worth $95 million. By 1999, Forbes estimated the value at $155
million, and there is speculation that the Brewers are now worth well more than
$200 million, given the projected new revenue of Miller Park. For Selig and the
other long-term owners, this represents a fortyfold increase in the value of a
team purchased for $5 million in equity back in 1970.

Alas, that value is discounted considerably by debt. The Brewers’ stock
offering estimated its debt at about $63 million going into the 1997 season, and
Forbes’ assessment suggests that the team lost another $29 million from 1997
through 1999. Last season could have added to this sea of red ink, but the
team’s insurance policy, which reimbursed it for the delay in constructing
Miller Park, probably covered that.

Then there is the $50 million in loans the Brewers received from government,
foundations and the Association of Commerce to help the team finance its
contribution to the new stadium. These were low-interest, sweetheart deals, but
they still have to be repaid. All told, the Brewers are probably in hock as much
as $140 million. Of course, these are all ballpark figures.

In their inimitable fashion, the ever poor-mouthing Brewers have already been
lowering expectations regarding their ability to upgrade the player payroll and
make the team more competitive. The Brewers have estimated a gain of just $30
million in new revenue from Miller Park, a figure repeatedly cited in the
Journal Sentinel. Only recently has the newspaper figured out what everyone
knew: The additional revenue will be much, much higher. The team’s 1996 stock
offering estimated the additional revenue at $50 million, and a 1999 article in
Sports Illustrated projected a $55 million increase.

Selig-Prieb has cautioned that the Brewers must be careful in increasing
their payroll, given their “significant financial commitment” to the
construction of Miller Park. More likely, the team will take its time paying off
the $50 million in sweetheart loans, while giving precedence to the $93 million
in hard debt acquired prior to Miller Park.

Last year, the team had a payroll of $36 million. This season, the Brewers
are on pace to increase that by about $9 million. That will still leave them $18
million below the median major-league payroll and far, far behind the Yankees’
$113.4 million, Atlanta’s $95 million, Los Angeles’ $94.2 million, Boston’s
$93.9 million and the New York Mets’ $89.7 million. Fortunately, there is that
convertible roof to watch when our team falls behind.

“The lesson learned is that even with wonderful new facilities, these teams
[like Detroit, Milwaukee and Houston] have little chance of catching the big
spenders on the field,” wrote Tom Haudricourt in a column he managed to sneak
into the back of the Journal Sentinel sports section. Sadly, the newspaper
wasn’t able to learn the lesson until the facility was actually built.

Even Bud Selig seems to concede the problem. “One can make a compelling case
that maybe it [Miller Park] doesn’t do what people thought it would,” he
recently confessed. And who were these “people,” exactly? Wasn’t it a certain
baseball commissioner from Milwaukee, Wisconsin, who told us that a new stadium
was needed to bring us a competitive team?

Selig then added that “they’ve got a chance to be a very viable franchise” –
an oddly distant way to refer to a team whose ownership he still dominates – “if
we change baseball’s economics.”


It’s déjà vu. Twenty years after he began that mantra about revenue sharing,
Selig is still singing the same sad song. We’ve got the small-market blues, only
now we’ve got a major-league tax bill to hum along with it.

As you page through this article, the Brewers may already be playing in
Miller Park. The crowd will be roaring, the beer will be flowing, the only
fan-shaped convertible roof in North America will be nictitating like a giant
eyelid, and everyone will be having a boffo time. So what difference does it
make how much we’re paying for all that fun?

My advice is to ignore the accompanying sidebar detailing the cost of Miller
Park. It will just give you heartburn.

But for those who must know, I have attempted to track down all of the costs
to the taxpayer. Don’t ask me why. My approach has been to compare what might
have happened if the Brewers had paid for everything – as a normal private
business would. Thus, a for-profit business would be paying property taxes on
the land and stadium and sales taxes on the cost of construction materials and
luxury box sales, and the bonds issued to finance construction would not be
exempt from state and federal taxes. And so on.

With all costs included, the stadium will require more than $1.1 billion from
taxpayers over 30 years, or about $1,585 per household for those living in the
five-county area of southeastern Wisconsin who will pay about 90 percent of the
bill. This may not be a bad thing, if it encourages our admittedly overweight
citizenry to skimp on junk food.

Zeppos argues that it is misleading to include the interest payments on the
bonds, noting that by this approach, a $130,000 home actually costs more than
double its list price.

It’s an excellent argument, worthy of a well-paid PR man, but it does have
one flaw: When all of the interest and principle on my mortgage is paid off, I
will have a home I can live in for decades to come. The current life cycle of
ballparks, by contrast, is well short of 30 years. Miller Park may need
replacement before our 30 years of interest payments are finished.

And even if we give Zeppos his point, this would still leave a
not-inconsiderable bill of $820 million. As for the extra spending money that
gives us taxpayers, I leave it to Zeppos’ conscience if this means more binging
on fatty foods.

But I suspect that extra spending money may disappear as future capital
repairs are required: The stadium’s roof-drive mechanism, for instance, is only
guaranteed for 10 years. And when such costs arise, who will pay for it? The
Legislative Audit Bureau has already raised concerns as to whether the capital
and maintenance payments by the stadium authority will end up costing more than
the agreed-upon $3.85 million a year.

The bureau, by the way, has yet to tally the costs to the taxpayers caused by
the construction accident at Miller Park. “I would expect there will be added
costs, both direct and indirect, as a result of that tragedy,” says Rep. Bob
Zigelbauer (D-Manitowoc). “The cost of the delay in construction can’t help but
increase expenses, and it’s pretty hard to get insurance for the entire amount.”

But Zeppos says the insurance company will cover all of the added costs. And
Zeppos is an honorable man.

Even so, the $1.1 billion may be a low-ball figure because it is based on the
current value of the stadium and its 235 acres, which would be worth far more
than that 10 years from now, raising the value of its property tax exemption.
The cost of Miller Park to the taxpayers is likely to keep rising and rising.

So that’s the bad news. And the good news?

Oh, somewhere folks are laughing and somewhere smiles are bright. The Brew
Crew is hitting homers in a blaze of natural light. The fan-shaped roof is open
and the fans hope for a win. I’d like to see the game myself – if they’ll only
let me in.


The Bad News for Taxpayers



The 30-year tax bill for Miller
Park: $1,116,000,000.


  • $403 million: principal and interest ($242.9 million) on $160 million in
    bonds.
  • $17.2 million: additional sales tax revenue spent on construction and
    overhead.
  • $82.4 million: lease certificates of participation, including $44.9 million
    for principal and $37.5 million interest.
  • $115.5 million: capital and maintenance costs (stadium authority pays up to $3.85 million per year for 30 years).
  • $25.2 million: Milwaukee County payment for infrastructure (includes $7.2
    million in interest).
  • $29 million: city payment for infrastructure (includes $8 million in
    interest).
  • $36 million: State of Wisconsin payment for infrastructure.
  • $303.6 million: property tax exemption on stadium and land.
  • $68 million: federal tax exemption on interest earned from stadium bonds.
  • $2 million: state tax exemption on interest on stadium bonds.
  • $10 million: federal tax exemption on lease certificates of deposit.
  • $.3 million: state tax exemption on lease certificates of deposit.
  • $8.7 million: state administration expenses for new sales taxes.
  • $6 million: sales tax exemption on materials (estimated at $150 million) to
    build stadium.
  • $2.3 million: new infrastructure demanded by CMC corporation for
    “imbalanced” swap of land for Miller Park.
  • $4.1 million: Brewers’ operating costs at County Stadium paid for by the
    stadium authority.
  • $2.7 million: federal income tax exemption on city’s $15 million loan to
    stadium.


Charitable Money Lost to the Community: $42.4 million



The $21 million
loan to the stadium authority, including $20 million from the Bradley Foundation
and $1 million from the Helfaer Foundation, charges only an average of 4.5
percent interest, compared to a normal return of 12.5-13 percent on a
foundation’s investments, meaning the foundations will lose $42.4 million in
interest. Bradley Foundation spokesperson Kelly Ambrose calls the transaction “a
loan in the sense that the money is to be paid back; a grant in that its
lower-than-market interest rate is a substantial benefit to its recipient, the
stadium district.”



Information obtained from the Legislative Audit
Bureau, Legislative Fiscal Bureau, City Comptroller, Milwaukee County Department
of Administration and other sources. The lease certificates of deposit were used
to pay for the scoreboard and other items. The property tax exemption assumes
265 acres worth $42,500 per acre and the stadium value at $350 million. The
federal exemption on interest earned by bondholders assumes they are, on
average, in the 31 percent federal tax bracket. The state exemption on
bondholders assumes they are in the 6.5 percent or 6.75 percent tax bracket and
assumes that only one-eighth of the bonds were purchased by Wisconsin residents.
If residents from other states with an income tax purchase the bonds, the figure
for lost taxes would increase. The sales tax on materials assumes an average
sales tax of 4 percent, since the materials were purchased from a variety of
states.

Bruce Murphy is a regular contributor to Milwaukee Magazine.

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