Gov. Tony Evers’ recent proposal to provide $290 million in state money for improvements to American Family Field also includes a property tax exemption for any future development around the stadium.
The tax exemption would apply to the stadium itself as well as other operations, including “retail facilities, hospitality facilities, commercial and residential facilities, health care facilities, and any other functionally related or auxiliary facilities or structures,” developed on land owned by the Southeast Wisconsin Professional Baseball Park District, according to Evers’ proposed state budget.
Last week, Evers unveiled a proposal that would provide the Southeast Wisconsin Professional Baseball Park District with a one-time $290 million cash payment from the state’s $7 billion surplus. The cash, combined with $70 million in existing reserves and interest earned on the cash would be used to pay for future upgrades and repairs the district is required to make under its lease with the Milwaukee Brewers. In exchange, the Brewers would sign a lease through 2043 and agree to a non-relocation agreement. The team would also commit to making its own discretionary investments in the stadium.
The recommended property tax exemption was first reported by Dan Shafer in his weekly opinion column, “The Recombobulation Area.” As Shafer points out, it could complicate any development plans the Brewers might pursue for the 82 acres of surface parking lots around American Family Field. Some have suggested that the Brewers should create a mixed-use entertainment district around American Family Field – like the Deer District around Fiserv Forum in downtown Milwaukee or the Titletown District around Lambeau Field in Green Bay – as a possible solution to raise tax revenue to help pay for stadium upgrades.
But without the promise of forthcoming property tax revenues – as recommended in Evers’ proposal – any development done by the Brewers at the stadium site could not generate tax incremental financing, and the development itself would not financially benefit the city or other local government entities.
While the greater Milwaukee area stands to benefit from the economic activity generated by the Brewers and stadium operations, the state directly benefits from the sales tax revenue that flows through the stadium and any future development on the grounds.
The stadium generated $2.5 billion in total economic output, $1.6 billion in direct spending and $263 million in new taxes to the state of Wisconsin from 1999 to 2019, according to an independent study released by the Metropolitan Milwaukee Association of Commerce in 2020.
In his budget address, Gov. Evers said the Brewers’ presence will generate around $400 million in tax revenue for the state through 2024.
After accounting for inflation and contingencies, a report by Brentwood, Tennessee-based Venue Solutions Group that was commissioned by the Brewers puts the total cost for repairs and upgrades at $428 million for work taking place through 2040. The capital plan would have a little more than 25% of the spending occur in the next three years and 61% of it occur by 2030, which is when the Brewers’ current lease at the ballpark ends.
The pacing of the projects outlined in the VSG report suggests the stadium district would need annual growth of its reserves of about 2.75% to cover the $428 million capital plan and a little more than 3.2% to account for the additional $20 million in contingency planned for by the Brewers and the Evers administration.
The team has identified roof maintenance, infrastructure, HVAC, mechanical, electrical and plumbing systems, boilers, vertical transportation and fire suppression as areas of top priority in the report.
Evers’ proposal still needs to make it through the Legislature, which is controlled by Republicans. Assembly Speaker Robin Vos and the leaders of the powerful Joint Finance Committee criticized Evers’ approach to announcing the plan, arguing there was a lack of collaboration with Republican lawmakers.
