The process of bringing a new multi-purpose arena to downtown Milwaukee has been and will likely continue to proceed with glacial speed for the foreseeable future, but it's no secret that the clock is ticking on the Bucks and civic leaders to figure out a new long-term home for Milwaukee's NBA franchise.
And the NBA's soon-to-be commissioner is under no illusions about the urgency of the issue. Speaking at a panel organized by the Bucks and the NBA earlier this week, Adam Silver weighed in with a mixture of optimism and reality about Milwaukee's current arena issues.
"At the end of the day compared to other modern arenas in the league, this arena is a few hundred thousand square feet too small," Silver said. "It doesn't have the sort of back-of-house space you need, doesn't have the kinds of amenities we need.
"It doesn't have the right sort of upper bowl/lower bowl (seating) configuration for the teams frankly that Milwaukee wants to compete against," he said.
None of these things are new ideas, and nothing Silver said in Milwaukee this week should be interpreted as much more than his opening move in what will be a multi-year chess match between those pushing for arena action (Herb Kohl, the NBA, local business spearheaded by the MMAC) and those averse to having to pay for it (election-weary politicians and, unfortunately, a majority of taxpayers).
As is almost always the case, public money is ultimately what this will be about; everything else can be figured out much more easily. What's not clear is how exactly the key parties will play their hand, and how quickly they'll opt to do so. Here's what we know and what we can look forward to in the future:
When do Adam Silver and the NBA officially become the bad cop?
For now, Silver is doing all the obvious things you'd expect him to do. Over at Bucks.com, there's an interview with him hitting all the main talking points: talking up how much the NBA wants Milwaukee as part of its future, how great Herb Kohl is for Milwaukee (hint: he's the good cop in this scenario), why tanking doesn't work (the future commissioner of the NBA doesn't think being bad helps teams? Shocking!), and highlighting how small markets can still be competitive (ignore that the Spurs and Thunder used bad basketball as a key component of their talent acquisition, OK?).
Like David Stern before him, Silver will have to toe the line between encouraging an arena deal and saber-rattling when things (inevitably) stall. Which is only normal given the interests he represents. Stern and the NBA took a beating for "allowing" the Sonics' departure from Seattle, and the league's default preference will always be the continuity of keeping franchises where they are--just look at the Kings' situation.
But there are also some big differences between Sacramento and Milwaukee. On the positive side, Kohl will do everything he can to keep the Bucks in Milwaukee--in terms of local loyalty, consider him the anti-Maloof. But Milwaukee also seems far more indifferent to its basketball team than Sacramento, partly driven by the lack of urgency to the current situation and partly driven by, well, general indifference.
In the end, Silver wants what the other NBA owners want: for the league to make money, for franchise values to rise, and for small market teams to pull their own weight. Sure, the Bucks can keep playing in the Bradley Center, and they may even be able to turn a profit thanks to expanded revenue sharing. But that won't win them any friends among the league's other 29 teams, and there's no shortage of cities willing to throw around public money to attract an NBA team. So at some point the league's patience will run out if a new arena deal can't be sorted out; while the BC is fine for minor league hockey and college hoops, it's not for a profit-maximizing professional league like the NBA. And if you don't play ball, they'll want to take theirs and go to a city that will.
For the foreseeable future Kohl and Silver are on the same team, fighting for the same thing. It's difficult to imagine Kohl playing the relocation card too overtly, but Silver can do it for him. But what if Kohl can't get an arena deal done? Or what if he does and wants to sell to a local group at a huge discount? The NBA's Board of Governors ultimately has a say in all of these things, and there's no guarantee that they'll always be aligned with Kohl. Let's hope it doesn't come to that.
How quickly can a real plan be developed?
No one has pushed the arena envelope more aggressively than Tim Sheehy and the Metropolitan Milwaukee Association of Commerce, who are in the process of forming a task force to study the arena issue. Rich Kirchen from The Business Journal has been all over the arena issue for some time and offered the latest a few weeks ago:
Sheehy invited elected officials from five counties: Milwaukee, Waukesha, Ozaukee, Washington and Racine. Representatives of both Racine County and Ozaukee County already have said they oppose a regional tax to fund the cultural institutions and BMO Harris Bradley Center.
Also invited were community leaders and representatives of cultural institutions such as the BMO Harris Bradley Center, Milwaukee Public Museum, Milwaukee Art Museum, Milwaukee County Zoo and the Marcus Center for the Performing Arts.
The task force will tackle the questions of which "cultural assets" need funding and how to pay for their capital needs. The genesis of the discussion involves either upgrading or replacing the BMO Harris Bradley Center so it meets the requirements of the NBA and the Milwaukee Bucks.
Sheehy's push seems like the best bet for seeing action on the issue in the short term, and it's a savvy move because it broadens the issue beyond just the Bucks. Which is reasonable considering that even the best NBA teams don't play more than 60 home games including the playoffs and preseason. The Bucks will be the lightning rod for arena debate, but ultimately it's a venue that would benefit Marquette, the Admirals, concert-goers, and anyone else with an interest in seeing downtown Milwaukee get a major shot in the arm.
Still, there's no shortage of public officials digging their heels in against the mere concept of a new arena, the kind of political posturing that shouldn't be surprising given the way these dances tend to go. Everyone knows Herb Kohl's legacy is toast if he allows the Bucks to leave, so it's obvious for the peripheral counties in particular to play hardball before the game is even started. We're not paying for anything damnit! Don't even ask!
Fine. All that means is that it's critical for someone to come up with an actual plan, something that can be substantively discussed based on, you know, actual facts. There's no way to have a meaningful debate without knowing what a new arena/entertainment development looks like, how much it will cost and where it will be, which is precisely why the "debate" at the moment is little more than positioning.
Things will of course change and evolve, but there has to be a starting point, and the optics are much better if an initial arena proposal comes from a community-spanning committee versus from Kohl or the Bucks directly. That also means it will take longer and Kohl will likely play less of a public role than you might otherwise expect, but consider it a necessary evil in the process. The more stakeholders that can be brought into the fold now, the longer it will take to put forth concrete ideas that everyone can stand behind. But it's also much more likely that those ideas will get traction once they are put forward publicly.
How much does Milwaukee and Southeastern Wisconsin actually care about the Bucks?
It's not a question that can be answered easily, though as a die-hard Bucks fan the answer is one that admittedly scares me.
For now, there's no indication that taxpayers have an appetite for publicly funding a new Bucks arena, though I'm not sure that should be surprising or if it will ultimately be telling of where we'll be one, two and five years from now. Because the reality is that a number of things are working against the idea at the moment. Kohl's track record with the team has been abysmal to mediocre over the past two decades, the economy has been similarly poor for upwards of five years, and most people don't feel like there's any imminent danger of the Bucks leaving anyway. So of course people are indifferent to the vague idea of subsidizing a new arena.
Still, the lack of urgency is likely to change over the next few seasons, and we can only hope that the economy and the Bucks themselves also improve sooner rather than later. But will that be enough to make people care about investing big public dollars in the Bucks? I certainly hope so, but it's a major challenge in a state where football (both Packers and Badgers) is king and the Brewers have overcome their own long-term mediocrity to pull well ahead of the Bucks in terms of relevance.
The upside? History has shown that Milwaukee will support the Bucks when they are competitive, which is likely why Kohl has fought against an outright rebuild so steadfastly. But that also highlights the Bucks' biggest problem: it's not that Milwaukee refuses to rebuild, it's that they haven't been able to execute on their plan to be competitive. Either path can work if done correctly, but that hasn't happened with any consistency since the Big Three era crashed and burned over a decade ago (this is a topic for a separate 3,000 word column, eh?).
We can only hope that the Bucks' fortunes change, but even then it will take a well-orchestrated plan to win over taxpayers. After all, we're talking about an area that seems to reject the idea of another stadium tax despite the fact that the last one ended up paying huge dividends. The Miller Park experience was hardly an easy one, but I'd challenge anyone who believes it didn't ultimately work out to the benefit of Milwaukee and the Brewers. Considering a new Bucks arena would be downtown and used for much more than just Bucks games, you'd think that its civic appeal would be easier to sell.
But we also have to be reasonable about what is being sold. The economic impact of publicly-funded stadiums is hazy at best, which is why the private parties standing to benefit need to have plenty of skin in the game, particularly if the project runs over budget. It's also not just an economic question. Governments subsidize entertainment every day, whether it's an arena, a public park or local theater. They do it because people like them, they increase the profile of the city in ways that can't always be measured, and because the benefits are felt by more than just the private entities that use and in some cases own them (externalities, y'all). The rub is in finding the right balance between the public and private dollars--which gets to the next question.
How much will Kohl pony up, and will he need to sell first?
Ultimately, an arena deal will be ridiculously complicated with a million different points needing to be debated and bargained over with dozens of parties. But the single most important point will undoubtedly be the amount of private money that will be going into any project, with Kohl (or incoming ownership) bearing most of it. He's already said he will contribute significantly to a new arena project (duh), and his $25 million donation to the Kohl Center in Madison offers at least a baseline for the kind of money Kohl has been willing to put to use for an arena project bearing his name.
Unfortunately Kohl isn't rich by NBA owner standards, and a new Milwaukee arena figures to cost far more than the $77 million it took to build the Kohl Center in 1998. Kohl's reported net worth of around $300 million is curiously close to valuations of the Bucks themselves, though that's not to say he's broke aside from his basketball team. With a new arena likely to run between $350 and $500 million, it's been suggested Kohl will need to put up at least $100 million of his own money as part of a project, which would likely constitute a rather significant chunk of his non-Bucks assets. Whether he can come up with that kind of money without selling part or all of the team isn't exactly clear. Still, considering his history and the fact that he has no direct heirs, a massive investment in a new arena to keep the Bucks in Milwaukee would seem like the perfect way for Kohl to cement his legacy as one of the state's great philanthropists. Oh, and the fact that his basketball team would be the most direct beneficiary of such a move? Consider it a happy coincidence.
Logic would suggest that an arena deal would also be a necessary precursor to facilitating the sale of the Bucks to an ownership group willing to keep them in Milwaukee. Chris Hansen's half-billion dollar valuation of the Kings shows how ridiculously valuable a free agent NBA team can be, particularly with expansion unlikely in the next five years. And once the Bucks' lease is up in 2017, there's no reason to think they couldn't fetch the same or more if Kohl was open to a new owner looking to relocate. On the flip side, good luck finding anyone willing to pay half as much if the Bucks were forced to play another decade in the Bradley Center.
Still, the Kings' ultimate sale to local owners also underscores that small markets can support big valuations if they have a new arena plan to back it up. And it's important to note that Sacramento's deal isn't one big taxpayer handout, with Marquette's own dean Mathew Parlow highlighting it as a deal whose structure stands to benefit the city as well as the team. Vivek Ranadive's investor group is expected to put up close to $200 milllion of the $450 million facility, with the city to retain ownership of the facility once completed. Those numbers will be obvious benchmarks for the arena process in Milwaukee, though it's unlikely Kohl can afford to bring that kind of cash to the table on his own.
The obvious solution then is for an arena deal to be paired with a sale of the team to a group committed to keeping the team in Milwaukee. It's unclear who that might be, though the Brewers' sale to Mark Attanasio shows that local ownership isn't a necessity if you have a stadium deal that enables profitability. Either way, the ultimate solution figures to look something like this: Kohl and the new ownership group fork over somewhere between $100-200 million, the city gets a new multi-purpose building without having to bankroll all of it, Kohl's legacy as the savior of basketball in Milwaukee would be reaffirmed, and the new owners roll into town with a few years' worth of fan goodwill to use however they please.
It certainly won't be in terms of execution, and odds are that we'll have our share of nervous moments between now and 2017. But don't bet against the Bucks' future in Milwaukee just yet.