Last updated on July 3rd, 2019 at 07:13 pm
Racine is mulling plans for a $40 million arena with an attached 135-room hotel that could host a junior hockey team and potentially the planned Milwaukee Bucks D-League team.
The Racine County Board on Tuesday got its first look at a study done by Chicago-based Hunden Strategic Partners on the 3,800-seat arena, which would be located on vacant land at the southeast corner of Lake Avenue and Gas Light Drive in downtown Racine.
The Racine Area Manufacturers and Commerce commissioned the study, which found a new arena could have a dramatic impact on downtown businesses and quality of life.
“The visibility that visitors will have of the downtown from the new arena will show off the community to a new population that may consider visiting again or even moving to the community,” according to the study. “Currently, many people outside Racine simply are not visiting as there are few places to hold events.”
The study does not establish a specific plan for how to pay for the arena.
Rick Kozuback, president and CEO of Scottsdale, Ariz.-based International Coliseums Company, has been working as a consultant with the city of Racine and could serve as the developer if the project moves forward.
Racine County Executive Jonathan Delagrave is non-committal to the project at this point.
“Like with any economic development opportunity, we are in a learning phase and we are going to vet it,” Delagrave said.
One of the primary tenants in the arena could be the Milwaukee Bucks minor league team. The Bucks are in the process of choosing a city to host their D-League team. Racine, Oshkosh and Sheboygan are being considered.
The Bucks executive team is expected to visit Racine Friday.
“If this project is bigger than the Bucks is something that we’ll have to decide,” Delagrave said. “It’s all part of it.”
So is paying for it. According to the study, the $40 million cost of the project is not insignificant and will likely need to be paid for with some type of public-private partnership.
“It will require a strong commitment from the public sector, along with private partner commitments for naming rights and other sponsorships,” the study said.
The assumed tenants, a USHL hockey team and an NBA D-League team, are expected to combine to host 55 home games. Family shows, concerts, other sporting events, graduations, flat-floor events and meetings/banquets are expected to add 51 other annual events.
Attendance is projected to start at 279,700 and stabilize at approximately 257,700 annually, led by hockey attendance and followed by D-League, concerts, and family shows.
Total revenue is projected to increase from $2.3 million to $2.7 million. This includes the annual naming rights payment, which is not always counted as an operating revenue item, but instead used to support initial debt service, according to the study. After accounting for all operating expenses, net operating income is projected to be negative $24,000 in the first year, increasing to $265,000 by the 10th year.
Without the D-League, revenue is projected to be $1.8 to $2.1 million, according to the study.
The arena is expected to generate more than 11,000 room nights per year, when the D-League is factored in.
County and city officials will begin meeting to discuss financing options Aug. 30.