The question of publicly financing a new Downtown arena has a simple answer. But the question being asked in Milwaukee is more complex.
Is spending public dollars on a new Downtown arena anchored by the Milwaukee Bucks a good policy decision?
That’s the big question, isn’t it?
While the details of the 11th hour proposal to publicly finance a new arena are all vitally important and worthy of greater dissection, the Big Question is the one I keep returning to.
I’ve been covering this issue for more than a year. I sat next to the late Don Walker at the press conference announcing the sale of the Bucks as a reporter at BizTimes Milwaukee, I wrote a Milwaukee Magazine cover story involving new arena discussions last fall, and I’ve written about new arena proposals on several occasions as the situation has continued to unfold. Throughout this process, the public financing question has been the elephant in the room, the linchpin making any lofty plans possible.
This is the question that matters most. And taken as a simple question, there is a simple answer: No, it’s not good policy. There are many other needs more deserving of taxpayer dollars.
And it’s not just the matter of the public paying up-front construction costs, either. Sports-anchored facilities like the one proposed for Downtown Milwaukee are tax exempt and occupy precious parcels that could otherwise be developed and put on the property tax rolls. Regardless of how a deal is structured, funds are ultimately diverted from more pressing needs.
But a simple answer implies a simple question is being asked. That is not the case here.
Take away the aspect that puts this deal in such a gigantic spotlight – sports – and ask whether or not publicly subsidizing business is sound economic development policy. It’s certainly debatable, but it happens all the time, especially here in Wisconsin.
On Wednesday, the day before his “Cheaper To Keep Them” news conference, Gov. Scott Walker sent out a press release celebrating the state receiving Area Development magazine’s “Silver Shovel Award.” Meijer Inc.’s $146 million distribution center in Kenosha County is the top project playing a role in Wisconsin winning the award. Meijer, whose CEO has a reported net worth of $9.6 billion, received $5.25 million in tax credits for this project from the Wisconsin Economic Development Corporation (WEDC). That $5.25 million is more than the $4 million annually budgeted by the state in the latest plan to pay for the new arena.
Also receiving WEDC tax credits as of late: Menards, Inc., which is owned by the state’s richest individual, John Menard, Jr. (net worth: $9.1 billion) and Ashley Furniture, owned by the billionaire Wanek family. Ashley Furniture, reportedly is up for sale to the tune of $3 billion – more than five times what was paid to purchase the Milwaukee Bucks franchise from Sen. Herb Kohl.
Being opposed to this economic development strategy is not unreasonable, but let’s not pretend the Bucks are the only billionaire-owned company due to benefit from a taxpayer subsidy in Walker’s Wisconsin.
Situational pragmatism is needed when examining Milwaukee’s arena conundrum. While it’s difficult for me to agree with the general concept of publicly financing sports facilities, circumstances at play lead me to support the construction of a new arena with taxpayer dollars. Here’s why:
1. The Cumulative Effect
I interviewed dozens of city leaders when reporting last November’s cover story on Downtown Milwaukee. One of the ideas that stuck with me came from developer Barry Mandel, who said if the projects on the drawing board were to happen “in concert…it allows for a quantum leap.”
The massive reinvention of Downtown Milwaukee cannot be ignored. Cranes in the skyline stand as beacons of what’s to come for major developments like the 833 East building and the Northwestern Mutual Tower and Commons. The streetcar, seen objectively as a net positive, is finally moving forward. The Downtown apartment market is mid flight. Adding the construction of a new arena and ancillary development in the Park East (which hopefully will make a bit more sense after next week’s public hearing at the War Memorial Center) stands to further catapult the remarkable leap taking place in what Ricardo Diaz referred to as “everybody’s neighborhood.”
2. Doing Nothing Has Consequences
This point was made repeatedly throughout the press conference that finally — finally! — brought the financing agreement out of closed-door discussions and into the public eye. Without the arena, the state is out millions in tax revenue, planning for the Park East goes back to the drawing board, the Bradley Center sits in a state of disrepair without its primary tenant, and the Bucks leave town. And these problems will all need solutions from a community that will have proved its inability to provide them.
3. The NBA Matters
In the dregs of the Great Recession, before I was working full-time in journalism, I managed a new branch of a resale store located at 76th and Good Hope Road (we bought and sold CDs, DVDs, video games, and video game equipment). The vast majority of our customers were African American, and any items having anything to do with the NBA were by far our most popular. This was the year Milwaukee began to “Fear the Deer,” and even though the Packers would soon win Super Bowl XLV, far more people in the store were talking about the Bucks.
While there was a certain monochromatic element to the political leaders announcing this agreement, that’s not the case for fans of NBA basketball.
By nearly any measure, the NBA is better positioned than any other professional sport to evolve in a more global, diverse world. The NBA does business in 200 nations and employs more than 80 players from 30 different countries. The NBA received an “A” on The Institute for Diversity and Ethics in Sports’s annual “Sports’ Race and Gender Report Card.” The NBA’s fanbase is far more diverse than that of other major professional sports. According to The Atlantic, the NBA has the highest share of black viewers in sports (45 percent) — three times higher than the NFL or NCAA, and dwarfing MLB (9 percent).
And although Milwaukee recently ranked very well in terms of its Downtown cultural infrastructure, there aren’t many Downtown venues that lend themselves to especially diverse audiences on a consistent basis.
We hear all the time about Milwaukee’s unfortunate designation as among the most segregated cities in the country. This is a huge problem that manifests in many ways. So doesn’t it matter that the NBA provides one of the city’s most diverse entertainment offerings?
The Bucks have mentioned building connections to Bronzeville on several occasions in their push for a new arena. This is a very good thing, and if this project goes forward, they need to be accountable for those statements.
When I interviewed John Daniels, chairman emeritus at Quarles & Brady, last fall about the big Downtown projects at stake, he lamented the city’s lack of a diverse environment.
“People don’t want to acknowledge it, but until you acknowledge that it’s something to work on, you won’t move it forward,” he told me. “The way I look at it is if we do something really transformative, it’s going to help the entire community.”
Make no mistake, the arena is not the solution to all of Milwaukee’s problems — far from it. But there is no other project of this scale capable of engaging the city and its diverse population the way this one could.
Buzzwords like “catalytic” and “transformational” have been tossed around so many times in recent months they’ve nearly lost their meaning. But a shape-shifting upheaval the likes of which this city hasn’t seen in decades is precisely what’s at stake. There’s opportunity to be seized, and that opportunity is worth the cost.
Talking Politics is Milwaukee Magazine‘s weekly political column. For more commentary and insight, visit milwaukeemag.com/politics.