Milwaukee is grappling with a familiar issue: public funding for a new sports facility. Although there’s consensus that the BMO Harris Bradley Center has its limitations, there’s far less agreement on what should happen next. Which leads some to ask: Could the Milwaukee Bucks leave town?
It was a picture-perfect opening day at Wisconsin’s State Fair, and Herb Kohl, not quite one year removed from his 24-year senatorial career, was pressing the flesh at Herb’s Superb Milk House, his popular showcase of Wisconsin’s main agricultural product, where you can still get an ice-cold glass of flavored milk for only a quarter.
Unassuming and uncommonly modest, the slight septuagenarian worked the crowd to the point that an untrained observer might have thought it was an election year.
But Kohl, at 78, is no longer embroiled in the head-bumping politics of Washington, D.C. His pursuit now mimics the quest that lifelong friend and former Milwaukee Brewers owner Bud Selig embarked upon almost two decades ago: to spearhead construction of a new venue for his team to play in, using a combination of his own capital and several hundred million dollars of tax revenue from the public.
Now in his 28th year as owner of the Milwaukee Bucks, Kohl is the rarest of high-profile multimillionaires. He has never employed bodyguards. He still drives his own modest, early-2000s Buick sedan and favors authentic East Side Milwaukee eateries such as Ma Fischer’s and Zaffiro’s. They’re but a short walk from the same one-bedroom, 2,000-square-foot condominium that he has lived in since the 1970s. When Kohl ran his family’s grocery stores in the 1960s and ’70s, he took a hands-on approach with employees that he called by name and was known to even bag groceries when lines got too long.
Upon first impression, Herb Kohl does not ooze power. Yet, despite his age and almost stereotypically eccentric multimillionaire J.C. Penney poly-cotton-blend wardrobe, he, more than anyone else, is the ultimate power broker when it comes to deciding the NBA’s future in Milwaukee.
Kohl’s Bucks have begun to push for a new venue in earnest. Although the 25-year-old BMO Harris Bradley Center has been maintained remarkably well, it is terribly outdated by current NBA standards, Kohl says, and puts the franchise at a severe economic disadvantage. Although newer arenas have amenities such as year-round retail options even when there is no event, the Bradley Center is largely shuttered on non-game days. As the Brewers do at Miller Park, the Bucks hope to bolster their bottom line even during the offseason.
Kohl has said for more than a year that he is willing to “contribute an amount of money that will be significant and important” toward construction of a new arena, although he still steadfastly refuses to release a specific dollar amount.
Kohl points to the $25 million he contributed in 1995 for the construction of the University of Wisconsin-Madison’s basketball facility (which now bears his name) as significant and important. He says, “I’ll do that for the new 21st-century facility [in Milwaukee] also.”
In Madison, the Kohl Center cost $76.4 million by the time it opened in January 1998. Since then, construction costs have skyrocketed, and the revenue-generating amenities that NBA venues require to pay players’ salaries – such as club seats and restaurants – dwarf the needs of college-only facilities.
Forbes has estimated Kohl’s net worth at $279 million, far below what is believed to be necessary to construct a modern NBA facility. Ballpark estimates have centered on the $500 million mark, even though no formal proposals or artist renderings have yet been made public.
More daunting are the political implications. Just as Selig’s fight to construct Miller Park was a political bloodbath, this battle promises to be equally ugly, with both sides digging in.
After having spent nearly a third of his life meting out tax dollars on Capitol Hill, perhaps no other professional sports owner understands how challenging it is to convince a constituency that a new stadium is a wise use of scarce public resources.
“People weren’t keen then about public funding,” Kohl admits of the 1995 vote that led to Miller Park being built, and to citizens being taxed to pay for it. “Perhaps they are even less now.”
In 1985, the Bucks were successful on the court, but their arena was the NBA’s smallest and third-oldest (behind Chicago Stadium and Boston Garden). The MECCA Arena (now U.S. Cellular Arena) had no luxury suites and was considered an outdated relic when compared with the league’s rebirth ushered in by new commissioner David Stern.
Team owner Jim Fitzgerald said the Bucks were for sale on Feb. 5. He was frustrated at the lack of progress in replacing the arena and the failure of SportsVue, an all-sports cable network he co-owned with the Brewers.
Despite overtures from at least two other groups (including a Minneapolis interest), less than one month after the team went on the block, Kohl emerged as the new Bucks owner. Urged by friends to purchase the franchise as a 50th birthday present to himself, Kohl paid $18 million for the club, saying at the time, “It was an expensive purchase, but so what? Life is to live. People are right who say money is like manure – it’s no good unless you spread it around.”
Fitzgerald said at the time that he was concerned there would be no local buyer at all, and that Kohl was the only serious bidder who would keep the team in Milwaukee.
Four days after the purchase, Milwaukee Admirals owners and local philanthropists Jane and Lloyd Pettit announced they would fully fund the construction of a new $30 million to $40 million sports and entertainment arena that would be named for Jane Pettit’s late father, Harry Lynde Bradley.
Even with the gift of a new arena, there was bitter political fighting over its location. Eight months after announcing the gift, with the battle over where to build it still raging, an exasperated Jane Pettit told the Milwaukee Sentinel, “I thought it was going to be easier to do this. I never thought it would be so hard to give such a nice sports center to the community.” By the time the fighting ended and the Bradley Center opened, the price tag had swelled to $91 million, about three times what the Pettits had originally anticipated.
Meanwhile, Kohl’s first few years at the helm of the Bucks were rocky. He feuded with coach and general manager Don Nelson, and eventually, Nelson resigned. In the aftermath, he publicly blasted Kohl for everything from interfering in trades to telling the coach he had no class and was only interested in the owner’s money.
Kohl maintains that the feud was a one-way conflict, manufactured in Nelson’s mind. But what cannot be disputed is that after Nelson’s departure, the Bucks have not succeeded as a basketball team on Kohl’s watch, save for one magical run in 2001 that saw the Bucks come within one game of the NBA Finals. In the 17 seasons before Kohl purchased the team, the Bucks had a cumulative regular-season record of 843-551 (a .605 winning percentage), won 11 division titles, appeared in two NBA Finals, and won their lone league championship in 1971.
Since Nelson’s departure in 1987 at the end of Kohl’s second NBA season, the team has gone 944-1140 (a .463 winning percentage) and has won only two first-round playoff series. In the wake of Nelson’s resignation, Kohl has had 11 head coaches and six general managers. For many fans, Kohl has been an object of derision for the team’s lack of success during his tenure, despite his unflinching passion to keep the franchise in Milwaukee.
“He wasn’t hands-on at all. We hardly saw him. He was there without being there, and had people in place to keep everything the way he wanted to have it,” says one former Bucks front-office employee who did not want to be identified.
But there seems to be a universal theme surrounding Kohl: He’s a genuinely decent man who, despite a 28-year stewardship that’s produced little in the way of playoff results, cares deeply about the team and its fans.
“Everybody in Milwaukee wants him to sell; he doesn’t want to sell,” says former Bucks general manager Larry Harris, who, despite being fired by Kohl in 2008, still has only kind words for the man. “He would probably rather have his life end and whatever happens, happens. While he is still alive and is healthy, he still loves to own the team.”
Even so, in 2003, Kohl came close to selling his beloved Bucks to a group led by NBA legend Michael Jordan, only to pull out of the deal at the 11th hour.
“I wasn’t certain that the team would remain in town,” Kohl says today. “That’s not in respect to Michael Jordan; he’s an outstanding guy. But I couldn’t be 100 percent sure in the years going forward [that] the team would remain in Milwaukee.”
And still today, perhaps more so than his long career as a U.S. senator, Kohl’s anticipated legacy is keeping the Bucks in Milwaukee.
It’s a work in progress.
April 8 was a dark and dreary day in Milwaukee. But inside Marquette University’s gleaming new Law School, Eckstein Hall, the day began with soaring optimism. A capacity audience of 200 had crowded into an appellate class courtroom for one of the first public symposiums on what may boil down to a referendum on pro basketball in Wisconsin.
The issue would hardly be decided in one day. On the surface, it’s a debate centered around the grown-up version of a playground game, though the stakes, both politically and economically, run far deeper. In fact, some speculate there will be no formal proposal until after the 2014 gubernatorial election, in part because no one wants to touch the political hot potato – public funding for millionaire athletes and a multimillionaire owner.
It’s an exercise in contradictions that has played out for decades all over North America: the desire and, sometimes, desperation for cities to have professional sports franchises versus the reluctance to pay for them when the community has greater needs.
Behind the closed doors of Eckstein’s wood-paneled classroom were elected officials, business leaders, special-interest community groups, senior members of the Bucks front office, and the media. Noticeably absent were two longtime political adversaries who likely will play pivotal roles in this issue: Gov. Scott Walker and Milwaukee Mayor Tom Barrett. Neither accepted their invitation to attend. Also conspicuous by his absence was Kohl. And while top Bucks lieutenant John Steinmiller was in the room, neither the team’s executive vice president of business operations nor any other employee would have a seat on the panel.
The elected leaders who did show up came bearing the same theme: We love the Bucks, but we can’t afford to pay for a new palace.
Milwaukee Ald. Michael Murphy, while wearing the pained look of a boxer who just went 12 rounds with Mike Tyson, furrowed his brow at one point and laid out his daunting challenge. “At this time, the city of Milwaukee has lost $5 billion since the foreclosure crisis started,” he began. “Seventeen percent of the assessed value of our city. This year alone, I have over 112 properties I’ll be razing. But that’s not enough. I have at least 400 more properties I have to raze.”
He wondered aloud how he could justify tearing down a perfectly good Bradley Center that hadn’t even been open for a quarter-century. It would be unconscionable, he said, to leave municipal coffers vulnerable to the economic whims of a league that has endured two lengthy lockouts in the last 15 years because it couldn’t get its own fiscal house in order.
“The reality is, we have to prioritize like any business would,” said Murphy. “These are very precious resources we’re talking about when it comes to tax dollars. The city of Milwaukee is really in between a rock and a hard place. This burden cannot fall on the taxpayers of one of the poorest cities in the United States.”
Murphy has been lauded by the community organization Common Ground for his role in helping leverage $33.8 million from five major banks to help rebuild crumbling neighborhoods in the inner city. Of all the buildings he’s had to deal with, he said, the Bradley Center, by comparison, still appears functional. “We’re talking about razing a building that’s, what, 25 years old? I’m having a tough time keeping libraries open. I have debates with my colleagues during budget amendments about fighting over $35,000, whether to have a part-time public health nurse or a full-time public health nurse to deal with communicable diseases.”
There are greater priorities to address, agreed Common Council President Willie Hines. Although he, too, would like the Bucks to remain in the city, he asked, “What will that cost?” Many of his constituents can’t afford tickets for Bradley Center events and opposed the Miller Park tax nearly 20 years ago. A larger concern is the plight of the poorer residents that he represents.
“While we’re talking about entertainment,” Hines said, “they’re talking about food on their table.”
But for panel member Greg Marcus, president and CEO of Marcus Corporation, the “ah-ha” moment came years ago during a meeting in Oklahoma City. That community’s business leaders were trying to convince the public to approve a 1 percent sales tax to rebuild their crumbling infrastructure through a series of referendums called the Metropolitan Area Projects (MAPS). Someone at the meeting put the debate into perspective by posing a question: In the future, where do we want to visit our grandchildren?
The argument, Marcus said, was brilliant in its simplicity. “If you don’t make Oklahoma City a place that your kids want to live, you’re going to visit them in Tulsa or Dallas,” he said. “We have to have that same perspective. Do you want to go see your grandchildren in Chicago? If you do, then don’t take care of your house.”
It’s an argument – a veiled threat, some would say – that is cited repeatedly by Milwaukee arena proponents. “Do you want your kids to stay in Milwaukee?” echoes Beth Weirick, executive director of Downtown Milwaukee. “Because if we don’t build a city that has a high quality of life that your kids and your grandkids want to live in, they’re not going to be here with you.”
Oklahoma City used an unorthodox approach with its MAPS initiative, beginning in 1993, and then continuing in 2001 and 2009. For each of the three successful referendums, taxpayers were told upfront how each dollar would be spent, and no project was started without it first being fully funded. What’s even more remarkable is that Oklahomans, who live in one of the country’s most politically conservative states, have repeatedly voted to increase their own taxes multiple times. Moreover, they seem happy to do so, a stark contrast to the rancor still felt by many in Wisconsin over the stadium debate of the mid-1990s.
“I don’t remember hearing anyone grumble about it the way they do the Miller Park tax here,” says former Oklahoma City area resident Allison Silveira, a 35-year-old research meteorologist who moved to Shorewood in 2011. “So little, the city voted consecutively for several additional phases.”
In Oklahoma City, schools needed to be replaced, the public library was crumbling, the mass transit system was outdated and inefficient, and the state fairgrounds had fallen into disrepair. There was an aging minor league baseball stadium at the fairgrounds that could charitably be described as “rickety,” and the only major indoor arena was more than 40 years old.
“Each time we went [downtown], more storefronts were filled, and it felt a little cleaner, and a little safer,” Silveira continues. “The art museum reopening gave it more of a tourist flair. The renovated Civic Center brought in some better concerts. Housing construction in nearby Deep Deuce piqued the interest of young professionals wanting to have a downtown living experience. The Bricktown Ballpark made it feel more like a city.”
Oklahoma City Chamber of Commerce President Roy Williams, who has been credited for his leadership in spearheading the MAPS programs, says the referendums passed because elected officials stuck their necks out.
“None of this would have been possible without the visionary Oklahoma City mayors who saw the value in investing wisely in our city,” Williams says. “Three mayors spent political capital in order to champion causes that weren’t initially popular. I believe [they] will be remembered as strong city leaders who put the good of Oklahoma City before their own political ambitions.”
Back in Milwaukee, Mayor Barrett sees the Oklahoma City model as an exceptional example of civic cooperation. “You had the business community essentially taking the lead initially, and they did so in conjunction with the elected officials so that they were singing out of the same hymnal,” he says. “So you had the business community, the political community, and in many ways, the social services community, all in alignment. In order for this to be successful here, the same dynamic is going to have to be in play.”
Critics of Barrett question whether he has the political will to forge a similar unity in Milwaukee. When Williams visited from Oklahoma City in January – to speak to city leaders at the Metropolitan Milwaukee Association of Commerce offices – one observer who was in the room describes Barrett “sinking in his chair” when Williams spoke about the critical need for mayoral leadership to help shepherd initially unpopular public improvement projects.
Early this year, civic leaders in Sacramento took an aggressive stance to keep their Kings franchise from moving to Seattle. Sacramento Mayor Kevin Johnson, a former NBA star himself, was hailed as a hero for his three-year push to keep the team in his otherwise economically struggling city. He privately and publicly lobbied NBA owners, who were charged with either approving or rejecting the franchise’s sale from its then-owners to Seattle interests. Johnson also sought out local investors, rallied fan support, and mobilized a plan to build a new $448 million arena without raising taxes.
As part of the development plan, the new owners of the Kings will contribute $189 million to the cause, with most of the balance being paid for by leasing the city’s parking garages to a nonprofit corporation, which will borrow against future revenues. In essence, every time someone parks in city-owned parking structures, they will be supporting the public financing obligation of Sacramento’s new arena.
In light of the Kings’ saga, it’s no surprise that Seattle is cited as the most likely destination for a relocated NBA franchise. In 2012, Seattle-raised hedge fund manager Chris Hansen offered to finance most of the construction of a new arena in Seattle and purchase the Kings himself. Now, with the Kings off the table, one of the most prominently mentioned relocation candidates is the Bucks. Some longtime Seattleites might even see it as retribution for when Bud Selig bought the bankrupt Seattle Pilots in 1970 and turned them into the Brewers.
The Seattle fever may have cooled a bit when Hansen, in June of this year, mentioned productive talks with the league about his city getting an expansion team rather than a relocated one. Still, NBA Commissioner Stern has hinted that there are about a half-dozen other cities that may not have NBA teams, but are still ahead of Milwaukee when it comes to arenas with revenue-generating amenities, such as club seats and year-round retail outlets.
Sacramento doesn’t have to worry about those other cities. “I called in everyone I knew to help,” Johnson told the Sacramento Bee in June. “I couldn’t let the cement harden in Seattle.” The Sacramento mayor says he was even privately congratulated by President Barack Obama at a White House event shortly after the NBA’s Board of Governors voted on May 15 to disallow the proposed Kings franchise relocation to Seattle.
Barrett says that while he’s watched the Sacramento situation closely, he hasn’t reached out to Johnson to talk about the strategies used to dodge their relocation bullet.
At April’s forum at Marquette, Marc Marotta, chairman of the Bradley Center Board and a star basketball player for Marquette in the early 1980s, had this to say about the lack of initiative from community’s leaders: “They may be scared. But a good public servant not only listens, but leads. And sometimes, you’ve got to take tough votes.”
Cory Nettles, onetime commerce secretary under former Gov. Jim Doyle, was just as blunt. “I think our community all across is looking for a big, bold, audacious vision that we can all rally around,” he said. “And I think a lot of other people are frustrated at the lack of that vision.”
Nettles, now managing director of Generation Growth Capital, said he often speaks to headhunting firms who are trying to finalize a prospective employee’s relocation. “They want to know what kind of community this is. They want to know what kind of assets there are in this community. They want to know that this isn’t some kind of outpost that they will be bringing their families to.”
Weirick and Marcus caution that they’re not predicting Milwaukeeans will suddenly flock to Chicago if the Bucks pull up stakes, but they do say our community will take a serious hit in terms of nationwide perception, not to mention hometown civic pride.
“This isn’t just about an arena,” said Marcus. “This is about the cultural institutions, the arts, the parks, the schools. It’s a piece to the puzzle. But if you do a puzzle and there are pieces missing, it doesn’t look exactly right. And it’s not as attractive.”
Weirick acknowledges that not everyone who attends Bucks games shares an interest in the arts, such as ballet and symphony. But she says that together, arts and sports paint the mosaic of a community that she’s lived in her entire life. “One by one, if you start picking these things off, what have you got left?”
The arena debate is déjà vu for Tim Sheehy. As president of the Metropolitan Milwaukee Association of Commerce for the past 20 years, he keeps souvenirs from a previous debate in his office. On one wall is a copy of the Wisconsin State Journal’s front page from Oct. 6, 1995. The headline: “Brewers strike out in Senate: Stadium deal fails by one vote, but diehards refuse to give up.” A line from the article declares, “It would take a miracle to keep the Brewers in Wisconsin.” And an inscription below the article reads, “From one diehard to another.”
In 1995, Sheehy spearheaded the push by Milwaukee’s business community and political leaders to approve financing for Miller Park, which eventually passed by one Senate vote, 16-15. Likewise, as current frontman for the city’s business leaders, he’s taken a leading role in the quest to replace the Bucks’ home arena.
“Its economic life has run its course,” Sheehy says of the Bradley Center, the oldest arena in the NBA to not undergo a significant renovation. Three arenas that predate its opening – Oracle Arena in Oakland, New York’s Madison Square Garden and the Palace of Auburn Hills just outside of Detroit – have each had major renovations of $100 million or more. All Bradley Center renovations have been minor ones. “It’s a couple of generations behind in supporting the economics that a team in a small market needs to survive,” Sheehy says.
When the Bradley Center opened in 1988, club seats and year-round retail team stores were a new, untapped revenue concept. However, within just a few years, on-site restaurants and team shops became not only standard, but essential cash generators for franchises in all of the major sports leagues. “In many respects,” Sheehy says, “it is an absolute parallel to why we needed Miller Park.”
Sheehy understands that whenever tax dollars are at issue for professional sports franchises, it’s going to be a hard sell to the public. “But we need to look at maybe a broader strategy for investing in Milwaukee’s cultural and entertainment assets to be successful in getting the community to recognize what we have,” he says.
In 2012, Sheehy headed up a consortium of local businesses that would provide support for the Bradley Center, a sort of sponsorship bridge between the aging facility and a new one. The “Champions of the Community” initiative raised about $18 million over a six-year span to renovate private suites and add restaurants on the main concourse. It also helped fund construction of a premium eatery near the Bucks locker room for patrons who’d pay for proximity to behind-the-scenes action.
The building’s four main entrances were named for title sponsors Miller Lite, Northwestern Mutual Life, Kohl’s Department Stores and Potawatomi Bingo Casino. The arena officially became the “BMO Harris Bradley Center,” and even though the full name is rarely used colloquially, the branding of it on broadcasts and all other official documents was important enough for BMO Harris Bank to pay what’s believed to be $1 million-plus annually, a figure BMO Harris wouldn’t confirm to Milwaukee Magazine.
But all the extra sponsorship money is just seen as a temporary solution until the permanent one is found. Or built.
Sheehy still has in his office an unopened can of beer that then-Miller CEO Jack McDonough gave him in 1995. It was meant as a gesture to help ease the tension during a key part of the stadium financing negotiations.
It was only in the wee early hours of Oct. 6, 1995, (after press time for the Wisconsin State Journal) that state Sen. George Petak (R-Racine) changed his vote from “nay” to “yea,” thus saving the
stadium bill. Saved, too, were the Milwaukee Brewers themselves, who almost assuredly would have left for another city had Miller Park not been built. However, for changing his vote, Petak was recalled from office the following June by constituents furious over being taxed one-tenth of 1 percent for the ballpark.
For public financing advocates, Sheehy – a former legislative aide for U.S. Rep. James Sensenbrenner – might be the project’s ace in the hole. Absent any elected official coming forth with a financing plan, Sheehy’s political background and experience from the Miller Park saga combine to make him a crucial voice in the coming struggle.
For the last couple of years, MMAC has been laying the groundwork for a public discussion, in part because of the rancor that dominated the Miller Park debate. The renaissance of the Brewers since their new stadium’s debut will likely be an ongoing theme in the chamber’s campaign. Another theme will focus on perception: how Milwaukee sees itself versus how the city is viewed both nationally and globally.
Sheehy asks, “What is the value to Milwaukee of being one of 28 cities in the world to host an NBA franchise? We believe there is some value to that. What we hear from our members is that it helps with the marketability of the community, it helps with its visibility, it helps with its image and it helps [add] to the quality of life to the region.”
He tells a story about meeting with business leaders in China, how he introduces Milwaukee as “schwen-LEW-dway,” which translates to “male deer” in Mandarin. “They recognize the Bucks,” he says. “They recognize the NBA.”
And while Sheehy agrees that Milwaukee has other pressing needs – education reform, eradication of poverty, job creation – he maintains that it’s important for communities to see the big picture regarding the resources they already have. He cites places that have regretted losing their franchises – including Seattle and Charlotte, N.C. – noting that the NBA didn’t consider such communities viable homes again until after they promised new arenas. In the National Hockey League, both Minneapolis-St. Paul and Winnipeg in Manitoba, Canada, lost their teams within the last 20 years, only to get another franchise after building new venues.
“I think they lost their teams by mistake,” Sheehy says. He explains that many fans and elected officials don’t fully understand the overall benefits, either in terms of economics or the intangible prestige, of having a major league pro sports team until that team is gone. “Many of those cities that have lost teams have paid dearly to get them back,” Sheehy says. He notes how Seattle’s search to replace the Sonics remains fruitless, despite having solid financing and a fan base in place, because no franchise is available to move there. Yet. “This might not be the most positive way to put it,” Sheehy says, “but if we are going to lose an NBA franchise, I want us to lose an NBA franchise deliberately – not by mistake.”
That is at the heart of MMAC’s public information campaign. Because if Milwaukee chooses to not replace the Bradley Center, Sheehy says, other owners in the NBA will likely force the issue, compelling the Bucks to move elsewhere once the current Bradley Center lease expires in 2017. Sheehy says several cities either have or are willing to build an arena that would provide the team with modern revenue streams the BC lacks.
“Part of my job is to make Milwaukee the most attractive place for talent to migrate to and stay in, for capital investment to come to. And I look at all of those cities as competitors,” he says. “The Kansas Citys, the Louisvilles, the Nashvilles, the Seattles – none of them are standing still. All of these other markets that are competing for talent and economic growth find NBA basketball to be valuable assets.
“I don’t think it’s with a lot of forethought if we decide to kick ours to the curb.”
The stark reality of NBA economics hardly makes the Bradley Center’s demise unprecedented. Of the 41 NBA arenas built primarily for basketball since 1970, 14 of them have closed after an average team stay of just 19.25 seasons. The same year that the Bradley Center opened up, four other venues debuted. One of them, Miami Arena, was abandoned after the Heat moved into a new building on Biscayne Bay less than 12 years later. Another, the Charlotte Coliseum, was torn down in 2007, and Sacramento is preparing the wrecking ball for the Kings’ soon-to-be-former home.
Regardless, many experts question the sense of it all. “The economic impact of the NBA or NHL in any city is just really tiny,” says University of Chicago sports economist Allen Sanderson, co-author of the book Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums. “Any money spent inside a sports arena is just money that doesn’t get spent in a mall or a restaurant or some other entertainment or recreation option in the city.”
Moreover, Sanderson says, the arguments that the NBA is a draw for corporate recruits simply is not true. “When firms are looking to recruit individuals or relocate their corporate headquarters, there tend to be larger issues,” he says. “What is the quality of the labor force? What’s the crime rate? What’s the overall tax rate? What is the transportation network? Quality of the schools? Those are the primary factors.”
Milwaukee’s political leaders, including the mayor, insist any reluctance to open up the city’s checkbook is simply a matter of priorities. Although Barrett says he very much wants the Bucks to remain in Milwaukee, “any public financing, to the extent that there is public financing, has to come from a region larger than Milwaukee County. It cannot simply be a Milwaukee County or a city of Milwaukee endeavor.”
Yet, there seems to be little support among Barrett’s fellow elected officials, including those on the Common Council, save for one idea that has received relatively little traction. Ald. Terry Witkowski of the 13th District says Milwaukee needs to think beyond just a new arena, and touts a complete redevelopment of the four-block corridor that surrounds the Bradley Center. It would include restaurants, theaters, retail and hotel space, much in the same mold of the “LA Live” district in Los Angeles, the centerpiece of which is the Staples Center arena.
Witkowski, who confesses to not being a sports fan at all, nevertheless is the only Common Council member on record as saying that he supports a small tax increase for an all-encompassing project. His caveat: most of the funding must come from private interests, not be solely incurred by the city of Milwaukee. “I am not disturbed by the stadium tax,” Witkowski says of the Miller Park funding mechanism. “I don’t know of anybody where this [tax] has taken bread off the table. People never noticed the stadium tax with what they did.”
One place that it has been noticed, however, is in Madison, even as Gov. Scott Walker has remained largely silent on the arena issue. In May 2011, he strongly dismissed the idea of extending the one-tenth of 1 percent sales tax levied in the five-county Miller Park Stadium District, and other lawmakers have followed suit. But in an August 2013 interview with The Business Journal, Walker took a somewhat softer tone. He acknowledged that the Bucks are an asset to Wisconsin and was at least open to the idea of state assistance when it came to infrastructure funding. He also said it was critical for voters to have a say in any taxation for the project, possibly in the form of a referendum, and noted that monetary contributions from Kohl would make it an easier sell. “If he did something,” Walker said, “it would be huge.”
Although Wisconsin State Assembly Speaker Robin Vos (R-Rochester) says he tries to attend as many Bucks, Brewers and Packers games as he can, he has been one of the most outspoken opponents of using public tax dollars for sports venues. “Now is not the right time to dump the burden of paying for a new professional sports arena on the taxpayers, especially without their input,” Vos tells Milwaukee Magazine. He notes that he still receives regular phone calls from constituents in Racine County asking him when the Miller Park sales tax will finally expire.“Before any talk of public financing can even occur, there should be a discussion in Milwaukee first and a plan must be developed. I hope business and community leaders can find an innovative solution, one that doesn’t just rely solely on taxpayers’ wallets.”
The possibility of losing the Bucks franchise should not be taken lightly, says Marquette law professor Matthew Parlow, who studies stadium financing and sits on the Bradley Center board. “If you look at profit-maximizing owners, it is irrational to keep the Bucks here without a new facility,” he says. “A rational economic profit maximizer will not keep the Bucks here. They will either sell the team and go elsewhere, or they will move the team themselves.”
The numbers seem to back Parlow’s theory. Forbes estimates the Bucks value at $312 million, dead last in the NBA, a spot they’ve held every year since 2008. On the other end of the spectrum, the New York Knicks top Forbes’ list at $1.1 billion. The Bradley Center is annually cited as the biggest contributing factor to the Bucks’ relative lack of value compared to other NBA teams.
One example of revenue disparity is in luxury suite dollars. The Bradley Center’s 44 suites lease for between $65,000 and $70,000 per season. In Indianapolis, an NBA market similar to Milwaukee, Bankers Life Fieldhouse leases its 69 suites for between $50,000 and $220,000 per year. Another disparity in revenue comes from the so-called “club seats,” an intermediately priced option between luxury suites and regular seating. Club-level patrons have access to upscale food and beverage options that fans in the main concourses do not. The club seats are generally wider, and in most cases, club seat holders have their own private entrance. The average NBA arena has about 2,200 of these lucrative seats for sale. The Bradley Center has none.
The Bucks’ consistently low valuation is not lost on the league’s powers-that-be, Parlow adds.
“The NBA may well make this choice for this community if this community doesn’t make this choice one way or another,” he says. Having successful and profitable teams, Parlow explains, is in the league’s best interest because “there is less of a need for revenue sharing. So an underperforming franchise financially needs to either figure its way out to get better revenues, or leave and find greener pastures elsewhere.”
The debate seems deadlocked. State politicians say they cannot help Milwaukee, and Milwaukee leaders say that they cannot go it alone. The only thing that everyone seems to agree on – Republican or Democrat, state or local official – is that using tax dollars to help build sports palaces is political suicide.
Although proponents stress that any new facility would be used for many more events than Bucks basketball games, even Kohl admits that without his NBA team, there would be no push toward building anew. After all, the Milwaukee Admirals and Marquette Golden Eagles seem quite happy with the status quo. Major concerts and family events still get booked there. College graduations and community events do not require club seats and restaurants. The NCAA men’s basketball tournament regularly plays in venues that are older and smaller than the Bradley Center.
Nevertheless, Kohl is adamant that this is a project critical to the long-term health of his beloved hometown. “Look at Miller Park and Lambeau Field,” Kohl implores. “These are magnificent facilities. They’re actually destinations. People didn’t realize that would happen at Miller Park before it was built.”
Kohl also says that what he took away from the Miller Park debate was a sense of how difficult it was to convince taxpayers that a sports and entertainment investment is in their best interest. “I think the public will have to be satisfied that there is enough private investment for them to say, ‘OK, maybe we’ll consider some public investment,’” he adds.
But for all the intransigence and uncertainty, Kohl remains remarkably optimistic. It’s the Herb Kohl way.
“I think we’re going to get it done,” he says, his eyes suddenly lighting up as he watches his State Fair staff mingle with Bucks fans amid an endless supply of his flavored cups of milk. “It’s the right thing to do. And it’s very important for not only Milwaukee, but for our state.”
|This article appears in the October 2013 issue of Milwaukee Magazine.
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