Impact of New Bucks Arena Remains Questionable
Monday the city of Milwaukee will begin the formal process of considering financing for a new Bucks arena. Earlier this summer, the state agreed to its share of the $500 million project. But most of the public funding - $250 million before interest, would come from local sources – Milwaukee County, the City Center District and the city. The impacts remain in dispute.
Gov. Walker signed the state share of the arena into law a few weeks back.
“We cap off the state’s investment at no more than $80 million, and in return, the state gets in directly in income tax revenues upwards of $299 million,” Walker says.
County Supervisor Theodore Lipscomb says the deal is good for some.
“The state got a great deal, the city actually got a pretty good deal I’d say, and the county unfortunately, not so much,” Lipscomb says.
Lipscomb says the county will be out of about $4 million annually over the next 20 years.
He says that while he supports the Bucks, the premium is a high one to pay.
“The county faces a continued structural deficit. Things like the Bucks deal, adding that $80 million commitment really take us in the wrong direction,” Lipscomb says.
The county’s portion will be taken directly out of the money it receives from the state. The county is also expected to sell, very reasonably, unused land for the project.
When it comes to the city share, Milwaukee’s biggest cost is supposed to be the $35 million parking garage it builds near the new arena. The city will also give the Bucks half the revenue. Mayor Tom Barrett says it’s not such a bad deal.
“We were able to bargain with them where we agreed that there would be a 50/50 split. But when they started out, they thought they were going to get all the revenue,” Barrett says.
Barrett says city taxpayers would also extend $12 million in credits for a public plaza, cover more than $4 million in street work and pay over a million to demolish a parking garage. The mayor says in return, the city will get a huge economic boost.
“The first thing the city’s going to get is a $500 million public works project. It is paid for with $250 million of private money. Which is going to create hundreds of construction jobs. And I want as many of those jobs to go to people who live in and around the area as possible,” Barrett says.
Nice in theory, but it doesn’t always work out that way according to Robert Baade. He’s an economics professor at Lake Forest College in Illinois.
“When Miller Park was being built and when there was that construction accident which caused several deaths, it was discovered that some of those deaths were people who lived as far away as Houston, Texas,” Baade says.
As for the amount of public money likely dedicated to this project - well over half the cost, Baade says it’s not unusual. Though he adds, the winners are clear.
“Ultimately, what happens is that owners are enriched and players are enriched,” Baade says.
Still, Eve Hall remains hopeful. She’s president of the African American Chamber of Commerce of Wisconsin.
“We are, as an African American community, 40 percent of this city and 25 percent of this county. With the building of the arena, the building of the entertainment district this means dramatic impact on our community around contracts, jobs, business and retail, retention and recruitment of African American young professionals,” Hall says.
There has been a push by some to ensure that the jobs associated with the arena and entertainment district are family supporting. Hall predicts there will be a mix of opportunities, with some jobs paying the minimum.