CHICAGO - Annual income taxes Wisconsin receives from Milwaukee Bucks basketball players and team employees would cover repayment of $150 million of 20-year state general obligation backed bonds for a new arena, according to the nonpartisan Legislative Fiscal Bureau.
The state currently receives $10.7 million annually in income taxes from employees and players on the National Basketball Association team. Lawmakers had asked the bureau to conduct the review. It was completed in late September but only just made public by Republican Assembly Speaker Robin Vos.
The estimates provided in the report assume 20-year bonds are issued with a flat repayment structure at current interest rates with a cost of about $64 million in interest. State law requires that GOs support improvement projects and federal law requires projects financed with tax exempt borrowing have a public purpose. To qualify, the stadium would need to be publicly owned.
"Legislation authorizing the bonds to be issued for these purposes typically declares that such facilities or improvements have a public purpose. The legislation also declares that if such a facility is not used for that public purpose, the state would retain ownership in the facility equal to the state's commitment for the facility or improvement," the report read.
A new arena to replace the Bucks current home carries an estimated price tag of $500 million, with about $350 million expected to come from the new owners of the team and other private sources. Public funding of about $200 million would be demanded.
Former Sen. Herb Kohl sold the team earlier this year for $550 million to a group of buyers led by Wes Edens and Marc Lasry. As part of the sale, Kohl pledged to contribute $100 million toward the cost of the new arena. While Kohl made keeping the team local a requirement of the sale, a clause allows the NBA to buy the team from the new owners if a deal on a new arena is not in place by late 2017. The league has been pushing for a new venue to replace the 26-year-old 18,600-seat arena.
The new owners have been meeting with local elected officials and groups to try to raise support for public funding for a new multipurpose arena and have said they hope to zero in a new site by the end of the year. The Bucks' lease runs through the 2016-2017 season.
