Taxpayers would pick up half the cost of a $500 million arena for the Milwaukee Bucks under a financial deal that would rely on current and former team owners for the rest, Gov. Scott Walker said Thursday.
Walker, a likely presidential candidate, has argued for months that it will cost the state more in lost income-tax revenue if the NBA team leaves Milwaukee than it will to pay for a new downtown arena.
Standing behind a podium with a sign that read, “Cheaper to Keep Them,” he announced the long-awaited deal surrounded by Republican legislative leaders, along with the Democratic leaders of the city and Milwaukee County.
“The price of doing nothing is not zero. It’s $419 million,” Walker said, one of repeated references to the estimated lost revenue and growth over 20 years if the team moves. “It’s not just a good deal. It’s a really bad deal if we don’t do anything.”
Walker, team officials, state lawmakers, Milwaukee’s Democratic mayor and the Milwaukee County executive have been negotiating behind closed doors for weeks.
The plan Walker spelled out includes $250 million already committed by the Bucks’ current and former owners. The other half will come from taxpayers, a contribution capped at $250 million, with the team bearing any responsibility for cost overruns. The taxpayer cost would grow to an estimated $400 million over 20 years with interest.
“This is a much better deal than most other projects like it around the country,” state Sen. Alberta Darling, the co-chairwoman of the Legislature’s budget-writing committee, said before the news conference.
The Legislature’s top two Republicans, Senate Majority Leader Scott Fitzgerald and Assembly Speaker Robin Vos, both said they weren’t certain whether the plan would win enough support to pass.
Without a new arena by 2017, the NBA has said it will buy the team and move it. The Bucks currently play in the 27-year-old BMO Harris Bradley Center.
The Bucks issued a statement calling the plan “a big step forward in our collective effort to build a transformative economic and cultural asset in downtown Milwaukee.” The arena has been pitched as part of a larger $1 billion entertainment district in the Park East district in downtown Milwaukee.
Under the proposal, the state would issue $55 million in bonds, which paid back over 20 years would cost $80 million. The city would contribute $47 million, including building a new parking structure. The county would also issue $55 million in bonds and the Wisconsin Center District would issue $93 million in bonds.
Republicans who control the Legislature criticized parts of the plan reported during negotiations. And the conservative group Americans for Prosperity, founded by billionaires Charles and David Koch, called for rejecting the deal.
“Government shouldn’t be in the business of financing private sports stadiums,” AFP Wisconsin state director David Fladeboe said. “The current deal is based on fuzzy math, complicated accounting and millions of taxpayer dollars.”
A majority of Republican state senators don’t want the arena financing plan to come under the two-year $70 billion state budget, the Milwaukee Journal Sentinel reported Wednesday. An alternative route could be introducing the plan as a separate bill, where Democrats would join with Republicans to get enough votes in support.
Democratic Assembly Minority Leader Peter Barca withheld judgment, saying he wanted to carefully review it and discuss it with others. The Milwaukee Common Council must also approve the deal.
Current Bucks owners Marc Lasry and Wesley Edens bought the team in April 2014 from former U.S. Sen. Herb Kohl for $550 million.
At the time, Lasry and Edens pledged to contribute $100 million toward an arena, but have since increased that to $150 million. Kohl also has pledged $100 million.