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Bucks target new site in 3-4 months, arena tax referendum stalls, minority investors raise $84.5 million

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Mary Langenfeld-USA TODAY Sports

Journal-Sentinel: Bucks target new arena site decision in within 3-4 months
Don Walker reports that Bucks co-owner Wes Edens and new VP of Business Affairs Bob Cook met with city officials on Thursday, continuing efforts to sort through the not-so-minor issue of where to put a potential new Bucks arena. Alderman Bob Bauman participated in some of the discussions and offered some useful insight into the teams' thinking about the project:

"They have a very tight timetable," Bauman said.

"They want to have a site identified in three or four months. Then they want to do the engineering and design. Then they will focus on the financials."

In a brief interview at City Hall, Edens said the meetings were about "educating me about the city and the different constituencies and what people are thinking about development and the pluses and minuses of different places."

Walker also quotes Mayor Tom Barrett as reaffirming that he would prefer a site "as close as possible to Wisconsin Avenue," which dovetails with previous reports that team and city officials were focusing on downtown options near the current BMO Harris Bradley Center. To get your bearings: the Wisconsin Center convention center is three blocks south of the BC at the corner of 4th Street and Wisconsin Ave., while the UWM Panther Arena (previously the Mecca) and the Journal Communications Building are each a block south of the BC and two blocks north of Wisconsin Ave. While much of the site discussion to date has focused on the vacant Park East corridor a few blocks north of the BC or some of the parking lots around the arena, the Milwaukee Business Journal threw out the possibility of the Journal building and Panther Arena as additional options given their closer proximity to Wisconsin Ave. The Journal responded by terming the idea speculative, but that should be expected even if last week's Scripps-Journal Communications merger is likely to bring its own raft of changes. Pro tip: If someone wants your land, you don't tell them how much you'd love to sell it.

Barrett's preference for a location closer to the Wisconsin Center/Wisconsin Avenue could certainly be interpreted as a means of keeping open the possibility of a compromise solution with the Wisconsin Center District as well. Remember that WCD Chairman Frank Gimbel has proposed pairing the development and funding of a new arena with a $200 million WCD expansion, though at this point I'm not sure if that idea actually helps or hurts the task of moving forward with an arena. The WCD released a study in May arguing an expansion was necessary for Milwaukee to remain competitive as a convention town, though Gimbel and company will also want more public money to do it. Note that the WCD already has dibs on all the taxes collected inside the Wisconsin Center Tax District, which according to the WCD's last annual report accounted for $28 million in 2013. Tourist taxes--which target out-of-towners with things like hotel and rental car taxes--are usually one of the first targets for new arena fundraising since it's not the locals bearing the cost. But unfortunately the WCD also has $225 million in long-term debt and has previously cried poor about sparing any of those tax dollars for a new arena.

Milwaukee Business Journal: Arena tax referendum likely dead, as board minority vote prevails
On the topic of arena financing, there was some good news for arena proponents last week: Milwaukee County residents will be voting on plenty of things in November, but a non-binding arena tax referendum likely won't be one of them. Supervisor John Weishan was among those attempting to put a referendum on the ballot to oppose new taxes for a potential Bradley Center replacement, but Chris Ryan of the MBJ reports that a minority vote to send the proposal to the County Board is likely too late to get on the November ballot. The proposal would have to be heard by August 26 for that to happen, but a) the board is off for the entire month of August and b) County Executive Chris Abele was unlikely to sign it if even if it did gain approval through a special session of the board.

And in case you're wondering how to feel about this, the short answer is it's a good thing if you support public funding of an arena. While an arena financing plan will eventually need to gain broader public support, arena proponents understandably want to delay a referendum until there's an actual proposal on the table--you know, that thing which is at least a few months away from beginning to take shape. Asking voters whether they want to fund a project without any specifics--location, size, cost, etc.--is decidedly not the best route to winning anyone over, which is why Edens, Lasry and local business leaders have made figuring all that out a major priority. One step at a time...

MBJ: Bucks raise $84.5 million from minority investors
How much money did the Bucks' recently-announced minority investors contribute to the team? Rich Kirchen and the MBJ did some snooping and found what appears to be the answer in recent regulatory filings:

They filed information with the U.S. Securities and Exchange Commission on conducting a private stock sale July 17, which was one day after the Bucks announced the minority-investor news.

A spokesman for Lasry and Edens had no comment other than to say Wednesday that "Fear The Deer LLC is the holding entity for the capital raised outside of the principal investors."

The Bucks' $550 million valuation technically broke down to $425 million for the team and $125 million to retire its debts under the NBA's revolving credit facility, so Kirchen notes that the $84.5 million works out to around 20% of the equity valuation paid by Lasry and Edens. However, whether the new investors actually have 20% of the team also depends on the valuation they subsequently agreed to with Lasry and Edens. Maybe it's the same, maybe it's more, maybe it's less. Either way, it's a good chunk of change that suggests the locals have real skin in the game and aren't just token investors brought on for their Wisconsin ties.