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Kenosha casino developers offer $220 million payoff for arena, but Gov. Walker not expected to reverse decision on casino

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Gambling! Basketball! Political intrigue!

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Just when you thought building a new arena in downtown Milwaukee wasn't complicated enough, it's now being thrown into the middle of a turf war over a proposed Indian gaming project in Kenosha.

Following Gov. Scott Walker's rejection of their proposed Kenosha casino on January 23, the Menominee tribe and casino owner Hard Rock International called a press conference Tuesday morning to announce their Godfather offer for the governor: Change your mind about the casino, and we'll pay for the proposed $220 million taxpayer contribution toward a new Bucks arena. As we posted yesterday, the story was first reported by Mark Belling of WISN on Monday night.

But as tantalizing as that might sound (Free money! The arena is done! WOO!), Gov. Walker doesn't appear to have any intention of reversing his original decision, which cited potential litigation against the state by rival tribes if the Kenosha casino was built.

Superficially that might seem unfortunate for Bucks fans, though Don Walker at the Journal-Sentinel reports that the Menominee's arena offer isn't a new one either:

The Menominee tribe made a similar offer during negotiations with the state last October, according to a copy of the confidential proposal. At that time, the tribe offered to pay the state 2.5% of the casino's net win for 10 years, with that money going into a trust to help pay the cost of the arena.

"That would have been less that the $220 million," the source said, explaining the October offer would have equaled about $100 million. "But the state could have asked for more if they were interested."

The state's main concerns with the Menominee plan appear to revolve around the economic viability of the proposed payback plan, in addition to potential litigation that could be brought against the state if another casino is built within 50 miles of the Potawatomi's Milwaukee casino. Former Gov. Jim Doyle controversially granted the Potawatomi a local gaming monopoly as part of an amendment to the state's gaming pact with the tribe in 2005, an amendment that Gov. Walker wasn't bashful about citing in his rejection of the Menominee proposal.

To that end, the Menominee and Hard Rock are now offering to post a $275 million bond to cover potential state losses resulting from litigation, though the bonding solution may not be enough to assuage concerns over the project's costs and benefits. Check out Save Our Bucks for an excellent FAQ on the topic, including some guesses as to just how significant the state's potential liability might be if the casino was approved (hint: very significant). Don Walker's story notes that the state has also been "skeptical" that the project will generate enough revenue to cover the arena payoff, Hard Rock's 26% share of gaming revenues, and the state's own 7.5% cut. I won't pretend to know how legitimate those concerns are, nor does there seem to be consensus on how significant the state's potential liability to the Potawatomi might be. It's worth noting that the Potawatomi have also been one of the BMO Harris Bradley Center's primary sponsors since 2012.

Caught in the middle of all this are the Bucks, who it's important to note were not involved with the formulation of the Menominee's latest proposal. Walker announced his decision to include an arena bonding plan in his new state budget just two weeks ago, so it wouldn't have made any sense for the Bucks to have been working behind his back with the Menominee, especially if a similar offer was already floated to the state last fall. Team President Peter Feigin implied as much during a Tuesday afternoon press conference to announce the team's newest sponsorship deal:

How this tangibly affects the path forward on the arena is unclear, though ultimately the casino decision is Walker's alone and has broader implications than just the arena project. After all, whether the Menominee "bribe" is set aside for an arena or something else in the state budget doesn't necessarily make any difference so long as the amount and timing are the same -- and on that front the Walker administration appears to have already done whatever homework it felt was needed. I won't claim to know if the calculus is right or wrong, but it doesn't sound like the governor is about to pull his graphing calculator back out of his briefcase.

That's bad news for the Menominee, which is why it's also not surprising for them to be taking desperate PR measures in the face of Walker's rejection. They know that jumping into the arena funding debate will attract attention and could help rally some last-ditch support for their project, particularly among critics of Walker's arena funding proposal. The Menominee proposal may not get a casino built, but it could make life a bit more uncomfortable for Walker as he seeks to push his budget through legislative approval this spring and summer. And that wouldn't be good news for the Bucks either, as the Menominee offer -- strawman or not -- could be used against the current Walker plan and unnecessarily entangle the casino and arena issues. Hopefully it won't, but this is politics after all.

In the meantime, the Bucks continue to focus on getting the details of an arena site proposal buttoned up and ready for public consumption. All indications are that it will involve some combination of the area immediately north of the Bradley Center and/or Park East corridor properties owned by the county, with Wes Edens reportedly meeting with Milwaukee Mayor Tom Barrett and County Executive Chris Abele to discuss just that on Tuesday. Without those specifics hashed out it's difficult to expect much further progress on any financing plan, though it does sound as though a formal announcement from the team isn't far off.

As always, stay tuned.