Don Walker: Bucks say talks for preferred arena site hit snag
Since Rich Kirchen of the Milwaukee Business Journal first reported that the Journal Communications building could be an arena site target in late July, Journal Chairman and CEO Steven Smith has seemingly been begging the Bucks to make an offer. And with good reason: The paper moved its printing operations from the Journal Square facility to West Milwaukee in 2003, and its recent merger with Scripps has already started to result in staff downsizing that would seem to make a similar office downsizing a no-brainer. But a deal with the Bucks has yet to be agreed, and over the weekend Don Walker (in the Journal-Sentinel, of course) reported that Marc Lasry now viewed the Journal site as "lower probability" than a month ago.
"I think it's gotten more complicated," Lasry said in an interview before Friday's Miami Heat-Bucks game at the BMO Harris Bradley Center. "I think it's going to force us to sort of go to Plan B. Because I think time really isn't our ally. We've tried to be pretty honest about it. We've tried to say, 'We need to get something done sooner than later because we've got to get everything on board, we've got to start to break ground.'"
While this could be taken as a clear move in direction away from the Journal site, I'd mostly read it as a message to the Journal that they aren't the only game in town. Just as the Bucks are facing pressure to lock up a site and move forward, the Journal doesn't seem like it's in an obvious position of strength either; I'd bet the bankers' pitch decks for the Scripps merger didn't plan on keeping an oversized building for the newspaper business it planned to spin off. And considering that the Bucks appear to be the best and perhaps only candidate to make the Journal an offer in the near-term, it's likely premature to assume the site is off the table.
That doesn't mean the Bucks and Journal can take their time, nor does it preclude other factors -- the Wisconsin Center District elephant, potential environmental concerns with leveling the Journal site, etc -- from derailing the team's preferred solution. Still, the good news is that the Bucks still have options, and (publicly at least) there were only good vibes being spread by NBA Commissioner Adam Silver during his visit to Milwaukee two weeks ago. So maybe the team will head in another direction, or maybe some public hardball will motivate both sides to lock something up shortly.
JS: Edens lays out vision for Milwaukee
In an interview with Don Walker right before Thanksgiving, Wes Edens suggested last that the team would likely seek to build a venue with a capacity of around 16,500, slightly smaller than the current BMO Harris Bradley Center but better aligned with demand in a small market such as Milwaukee. Edens also reiterated the team's hopes of sealing a financing deal by next spring, while hinting at existing NBA tax collections as the most obvious path toward a public financing piece. Via Walker's piece:
Once a financing plan is developed with more exact numbers, the right thing to do is "look at what is the appropriate way to get this done."
"If you step back, look, the team generates over the term of this arena's utilization... many tens of millions of dollars of direct tax benefits.
"While people can argue about what the impact is on the team and the community long term, you can't argue that there's not a team playing there that no one is paying taxes. That's not much of an argument."
Save Our Bucks had some good thoughts on the Walker story earlier this week, and we wrote a few weeks ago about how the coming surge in NBA TV revenues could allow for public funding without new taxes and without putting a hole in the current tax budget. In my piece, I conservatively assumed that by 2016 the league's new TV deal could boost NBA-related tax revenues by at least 50% over the $10.7 million collected in 2012, meaning that merely the increase in tax income could potentially finance $80-100 million in state bonding for a new arena.
That's why it's no small deal that Milwaukee Mayor Tom Barrett was quoted on Tuesday suggesting NBA tax revenues could surge as high as $25 million per year. Barrett of course has his own angle here -- his main priority is having any public funding for the Bucks come from somewhere other than Milwaukee's own pockets, leaving more local funding for projects like (gulp) Barrett's streetcar pet project. It's not clear where Barrett got the $25 million figure or what time horizon he was assuming, but needless to say it would be fantastic news for arena proponents and the state in general. More NBA revenue means more money coming from out of state (hint: that new $24 billion TV deal doesn't have much to do with Wisconsin), which means more money flowing into the state's tax coffers that disappears if the Bucks aren't around.
Milwaukee Business Journal: New York real estate tycoon Michael Fascitelli buys into Bucks
Not to be overlooked in all the action is another big name the Bucks have added to their roster: New York real estate mogul Michael Fascitelli. Rich Kirchen -- who also put together an excellent profile of Bucks President Peter Feigin recently -- reports that Fascitelli's development expertise will be central to the team's arena efforts.
Feigin, who started as the Bucks president about five weeks ago, said he was hired in large part to quarterback the arena project. However, Fascitelli is providing his real estate expertise to the ownership group on the endeavor.
"He will be involved at an extremely high level" in the arena project real estate," Feigin said. "He's the one I confer with as we start building the team of developers, environmentalists, architects, feasibility guys. He's the senior guy to default to on all of that."
Milwaukee Business Journal: Lasry, Edens, Jamie Dinan named 2014 Executives of the Year
The Bucks' principal owners would be the first to admit that they have their plate full of things still left to do -- an arena deal being the most obvious -- but they're already racking up honors for their work in turning around their flagging franchise on and off the court. Congrats, gentlemen. Let's hope for another string of awards next year, eh?