The Bucks' latest proposal would put a new arena in Bob Bauman's aldermanic district. He offered his take the latest plans, public financing, and how there’s still a real chance the team leaves town.
Ald. Bob Bauman has represented Downtown Milwaukee on the Common Council for more than a decade. He’s done so in very much his own way.
Though he’s clearly thoughtful person with passion for what he does, he won’t shy away from making provocative statements and has a tendency to shoot from the hip, which, of course, can rub some people the wrong way.
Bauman, who has a long history of advocating for public transit, is always active when it comes to discussions surrounding Downtown development. Last week, after months of speculation, the Milwaukee Bucks announced plans for a new arena to be built just north of the Bradley Center – in Bauman’s aldermanic district.
Bauman talked with Milwaukee Magazine about the Bucks’ latest development plans, the city’s ability to contribute public financing the new arena, whether or not public funding is necessary for the project, Mayor Tom Barrett’s involvement in the process, changing calculus in the state legislature, his own plan to fund the arena, and how there’s still a chance the Bucks leave town.
Dan Shafer: What is the city’s current role in arena financing? Mayor Barrett recently held a press conference where he talked about the county and city together contributing $50 million. How exactly would that work?
Ald. Bob Bauman: We looked at coming up with a $25 million dollar package, which would consist of turning over existing buildings and land. I don’t know if there was any actual cash involved in that pledge, but certainly real estate and certainly the parking structure on Fourth and Highland. That appears to be the package.
That’s going to be nowhere near enough. If the state comes in at $150 million, the deal is dead, and the Bucks will move. The state legislature will kill this deal because there’s no way the City can double its contribution. We just don’t have the tools. Even if there was political will, there just aren’t the legal mechanisms to raise $50 million instead of $25 million. If (state legislators) go from the governor’s proposal ($220 million) to $150 million, the local share goes from $50 to $100 million – $50 million from the City and County each. It can’t happen. The City and County don’t have the tools, so the deal’s dead. I think that’s what (state legislators) are secretly hoping happens. And then they’re going to blame Barrett for it.
DS: What do you mean the tools aren’t there?
BB: Because the arena is tax exempt, we can’t use tax incremental financing to assist in the development of a tax exempt development. Tax incremental financing only works when you increase the tax base. When you have a tax exempt project, there is no tax base.
DS: And any additional revenue, whether it’s a sales tax, a ticket tax, sin tax, all these things that have been bandied about in the process…
BB: Those are all state legislative initiatives. The city has no power to do any of those things. Unless the state enables us to levy a sales tax, to levy a ticket tax, we have no such taxing authority – only the state of Wisconsin does.
I think the probability is that this franchise leaves if the state comes in at the $150 million level. The gap is too big. The City and County simply don’t have legal mechanisms at their disposal to raise that kind of money.
DS: Does this funding debate raise any other questions?
BB: No one has answered the question: why are we providing any public money in the first place? Explain to us again why there’s a need for any public financing for a private basketball franchise. Why are we offering any money? Why is that even on the table?
The answer may well be, well, we’re being extorted. Then we at least know that, and the answer is these guys are going to get public financing because they can. They can leverage one city against another and basically extort the money. But so far, it’s just assumed that a private professional sports franchise requires a public subsidy. Why is that so?
DS: What I’ve been told is that because the Bucks wouldn’t technically own the property, much the same as the Bucks do not own the Bradley Center, that they would be, in a sense, a tenant for the arena, and–
BB: That’s a phony argument. Build it yourself! And own it! The United Center in Chicago is a privately owned building. Why aren’t we doing that? Maybe the answer is because these are multibillionaires that own these very valuable assets of which there are only 30 and they aren’t putting their own money in because they don’t have to. And they can go to another city and get an as good or better deal. That’s the real answer, but I think the public ought to know it is legalized extortion. They could simply build their own arena, and then rent it to Marquette, rent it to the Admirals, rent it out for concerts, rent it out for the circus, and run it as a private entertainment venue.
It is a money-losing investment, from the public standpoint. The Bradley Center is losing money hand over fist, as we’re now told, and it needs subsidies to operate.
DS: Does last week’s announcement that includes ancillary development in the Park East and other parcels of Downtown change anything?
BB: I think that the plan that was put together, from a master-planning standpoint, is actually pretty reasonable and has a lot of promise, and could be a big boost to economic development Downtown. Frankly, we would be standing there ready to assist all this ancillary development with tax incremental financing, because all this new development will presumably be taxable. That’s a standard type of development that the City’s very comfortable doing and we’ve done numerous times. It’s no different than the Brewery complex or Northwestern, or any other of these other projects that we’ve done. The problem is getting the money into a tax exempt arena.
Their plan would be easily financeable, and we’d all be standing in line to support it if the plan was: We have (an arena), we’re going to play our games here and we want to develop around it. And the city would say, we can come in with $25 million, we can come in for $30 million, we can assist with the infrastructure, assist with parking capacity. That’s a typical thing we do.
DS: Gov. Walker announced his “Pay Their Way” plan in January. And then there were a few things here and there about the city’s involvement, but, it wasn’t until April that Mayor Barrett had a press conference talking about any city funding going toward this project.
BB: That may have been publically true, but that’s not privately true.
DS: Do you know why there was the gap in terms of information released to the public?
BB: Everybody’s acting undercover here, not just the city. The Walker plan on paper is just fine. The understanding was that the City would come up with $25 million and the County would come up with $25 million, and we basically said, that we can handle. Now, the state’s going to change the deal, where it’s not $200 million, it’s $150 million. That creates a $100 million dollar gap. The City can’t handle that. It just can’t. And I think that’s exactly what (Assembly Speaker) Robin Vos and (Senate Majority Leader Scott) Fitzgerald intend to have happen.
As soon as we heard the legislature changing the deal, we don’t know what they’re willing to offer at this point. Do we have the capacity to make (a $25 million) contribution? Yes. Do we have the political will? That remains to be seen. Do we have the capacity to make a $50 million contribution? No, we don’t. We just plain don’t.
DS: So what’s next?
BB: I have a perfect solution to all this, but the state will never go along because it involves raising taxes.
Allow Milwaukee County to levy a dedicated one percent sales tax that funds transit, parks and recreation, cultural institutions and the construction of a new arena. And there’s no state subsidy. And that would remove $74 million from the Milwaukee Country property tax levy to boot. It takes the park system off the county property tax levy, it takes all the cultural institutions off the county property tax levy, it takes public transit of the county property tax levy and it funds the arena with no state subsidy. All the state has to do is say, “OK, Milwaukee County, raise your sales tax one penny.”
DS: Would that be like the Miller Park sales tax?
BB: What’s better about this is that you’re solving three public needs all at once. You’re solving the transit issue once and for all, the parks problem once and for all and the arena problem. Miller Park was just for Miller Park.
I think the probability is that this all goes south and the Bucks move. I think it’s increasingly looking like that’s what’s going to happen. I think it’s going to be a disaster for the community, but that’s where we’re heading.
DS: You don’t think the latest plans change that?
BB: No, because the state is going to try to stick this problem to the City. And the City and the County simply do not have the legal mechanisms to raise the kind of revenue the state is going to require us to raise. Since the owners aren’t going to come in with any additional revenue, the deal’s dead. And they’re going to try to blame Barrett.
DS: Do you think Mayor Barrett has been helpful in this process?
BB: Absolutely. I think he wants to see this team stay in Milwaukee. I think he sees the economic development potential of all this ancillary development that they’re talking about, and has been willing to basically carry the City’s share of burden as was essentially laid out when the governor presented his budget plan.
DS: Ald. Joe Davis released a statement recently criticizing the timing of the mayor’s contribution announcement.
BB: Davis doesn’t know what he’s talking about. I’ve met with the owners, I’ve seen this plan weeks ago and he has no idea what he’s talking about. He’s running for mayor and it’s just posturing and it’s just demagoguery. Barrett has been perfectly constructive. He and Rocky Marcoux (commissioner for the Department of City Development) and Jennifer Gonda (director of Intergovernmental Relations at the City of Milwaukee) and Pat Curley (Mayor Barrett’s Chief of Staff) — those people have been in regular touch with the various players at the state legislative level and with the Bucks team themselves. We were asked to come up with $25 million and we came up with $25 million. What more do they want? They’re changing the deal at the legislative level. Barrett has been perfectly proactive in my opinion.
DS: Any other big picture thoughts on the arena process?
BB: Everybody is trying to squeeze round pegs into square holes. At some point, numbers just don’t add up. If you really want to develop public goods, if you really feel that robust public transit is a public good, if you feel that parks and cultural institutions are a public good, if you feel retaining a professional basketball franchise is a public good, then you raise the revenue and make it happen. What I’m suggesting about a sales tax is no radical concept. It’s exactly what Oklahoma City did — a city that is Republican and has a Republican mayor.
Condensed and edited from a longer interview.