Milwaukee’s arena situation is reaching a critical point as the franchise’s president indicated the team had 10 days to get a deal in place for the arena, then he backed away from that statement. It’s becoming more likely that the Bucks situation will be settled within the next couple of months.
Bucks president Peter Feigin stated that the franchise, along with the politicians, had 10 days to get a deal done in a conference call with reporters on Tuesday.
“The clock is ticking. This has to be wrapped up in the next 10 days.” — Milwaukee Journal-Sentinel
While Feigin walked back his comments three hours after he made them, but the damage has been done. By giving a deadline, Feigin has publicly put the pressure on local politicians to get the deal done…and it’s hard to see how that will be productive for the franchise — generally threatening politicians doesn’t help you get what you want.
Currently, the Bucks are expecting the arena to cost $500 million with nearly half of the cost coming from private investors. The other half is going to come from public construction bonds; the big question confronting the politicians is how those bonds are going to be paid back. And that’s what makes the politicians nervous, because there seems to be very little support for issuing bonds for an arena…or creating a new tax/slightly increasing existing taxes to pay for the new building.
As of right now, the only plan for public money is governor Scott Walker’s proposal for $220 million in state bonds paid back by the expected increase in revenue from the jock tax on Bucks players. Walker’s proposal currently has the support of the city, county, and the Bucks; but it is encountering resistance in the state house. Many of the state representatives don’t feel comfortable with the state taking on the majority of the financial risk in the deal, especially since the state will hardly see any of the additional tax revenue generated by the arena on game days…they want the city and county to help out. As a result, this proposal is pretty much dead in Madison at the moment.
If there’s no plan for public funding for the arena plan, then there is no arena and the Bucks are going to leave Milwaukee. The franchise has a NBA mandated deadline of 2017 to be playing basketball in a brand new arena, or the league will buy back the franchise for $575 million — a $50 million profit for owners Wes Edens and Marc Lasry. If the association does end up buying the franchise, it will sell the Bucks to anyone it wants…which includes Chris Hansen’s ownership group in Seattle.
Feigin’s quote from his press conference indicates that it is do or die time in Milwaukee. The Bucks and the governments need to agree to a financial plan, vet said plan, execute an environmental review of the project, and break ground on the arena within the next year and a half. It is definitely doable for this list to get completed in that time frame, but it’s going to be extremely difficult.
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