Last updated on July 3rd, 2019 at 07:15 pm
Milwaukee Ald. Joe Davis Sr. has announced a proposal to increase the city’s bonding authority by $100 million during the upcoming 2015 budget process to give the city funding option flexibility for a proposed new arena.
“It is my intent to increase the city’s bonding authority by $100 millon, so that the city has all options on the table to play its part as a partner in this critical project,” Davis said. “Let me be clear, this initiative would not designate a single dime to be used for a new arena. It would simply give the city the flexibility to pursue that option later in the 2015 budget if leaders see fit.”
The NBA says the BMO Harris Bradley Center in downtown Milwaukee is no longer adequate and that a new arena is needed for the Milwaukee Bucks in order for the team to remain in the city long-term.
The cost for a new arena is estimated between $400 million and $500 million. New Bucks owners Wes Edens and Marc Lasry have pledged $100 million to the project and former owner Herb Kohl has also pledged $100 million to the project.
“Depending on how you price out the new arena, 40 to 50 percent of the costs are already accounted for,” Davis said. “Presuming it will cost in the area of $500 million, the new owners and the old owner have already brought $200 million to the table. The new owners will sell 20 percent of the team to local investors, so that should net an additional $100 million. Naming rights can go for $4-5 million a year in the NBA, so for 20 years that’s somewhere in the area of $80-100 million. What we are really talking about is a $100 million to $150 million problem.”
The city has options including the issuance of revenue bonds, general obligation bonds and tax exempt bonds, Davis said.
“I will be proposing the City of Milwaukee become an equity partner as an investor in the new facility, with the intent of gaining a return on investment as revenue for the usage of the facility increases,” Davis said. “As an investor, the city will exercise a leadership role in the operations of the facility with the authority to appoint a private sector partner to represent the city’s long-term initiative to liquidate its equity at the appropriate time.”
Davis threw cold water on one funding option, a so-called “Super TIF” that would divert all taxes from a district toward the project.
“While (a Super TIF) has worked in other communities and I think it’s a marvelous idea to fill the gap, it simply will not happen,” Davis said. “Suburban community leaders have expressed their objections loud and clear, and I respect their decision.”
The location of a new arena has not been determined, but Mayor Tom Barrett has said he wants it to be located downtown, west of the Milwaukee River and as close to Wisconsin Avenue as possible.
Some observers expect most public officials to wait until after the November elections to tackle the arena issue.
“While there may be hesitance to use public money for sports facilities because of a lack of political will and commitment, in Milwaukee’s case, the arena writes our future,” Davis said. “Let’s not wait for reelection time—let’s look our situation straight in the eye, create alternatives beyond the imposition of some new tax and get the job done.”