Bucks Arena Financing Clears Wis. Legislature

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CHICAGO — A $250 million public financing package for a new Milwaukee Bucks basketball arena is headed to Wisconsin Gov. Scott Walker's desk.

The Assembly's passage of the package Tuesday in a 52-34 vote followed the Senate's approval last week. Walker is expected to sign the legislation after having pressed for its passage.

During an appearance related to his bid for the Republican presidential, Walker called the assistance a "good deal' and added "it's critical not only for those who love sports….this was really about protecting the taxpayers of the state."

Walker argued in pressing for legislative support that the aid means the state keeps the team and millions in income tax revenue. Walker put a 20-year price tag of $419 million on the potential lost revenue if the team moves out of state.

The Milwaukee Common Council still must vote on the plan and a final agreement on a land sale with Milwaukee County is needed. The team hopes to begin construction this year.

Common Council President Michael J. Murphy said hearings will be held ahead of the council's consideration of the agreement which has been the subject of various revisions in recent weeks. "To help us take a deep dive into the numbers and details, I've asked the city of Milwaukee Comptroller to complete an analysis related to the city's financing package prior to public hearings that will be held before the Finance and Personnel Committee and the Zoning, Neighborhoods and Development Committee," Murphy said in a statement.

Critics contend that the actual costs is much higher due to about $175 million in interest costs and say the money could be better spent for the public good instead of aiding a professional basketball team.

The financing plan was crafted with the support of Walker, city and county officials, and team owners. A $2 surcharge on ticket sales was added to help cover the public's share of the tab with a portion going to the state and the remainder going to pay down debt on the arena instead of operating costs, as the current $2 surcharge tickets at the BMO Harris Bradley Center does.

The new arena would replace the Bradley Center.

The financing plan relies on a mix of borrowing and other funding from the state, the city, Milwaukee County, and the Wisconsin Center District, which manages the city's convention center.

The other $250 million comes from Bucks owners, Wes Edens and Marc Lasry, and the previous owner, former U.S. Sen. Herb Kohl, D-Wis. The public support is capped at $250 million, requiring the team to cover overruns and the public funding must be repaid if the team is sold.

Under the plan, the Wisconsin Center District's powers would be expanded from managing the city's convention center to include the new arena. The state would provide an annual subsidy of $4 million annually over 20 years for a total of $80 million.

In addition to the state's $80 million contribution, the county would also provide $4 million annually for a total of $80 million, the city would provide $47 million in tax-increment financing support, and the Wisconsin Center District would issue $93 million of new debt.

The district was created in 1994 and collects taxes on hotel rooms, food and beverage sales at restaurants, and car rentals, which go to repay a $185 million bond issue for the convention center. The $93 million would also be repaid with those taxes. The district could issue additional debt leveraging the state and county's annual subsidy. Officials said the state and county subsidies could each be leveraged to generate $55 million in additional borrowing, bringing the total possible bonding for the project to about $200 million.

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