UPDATE: After a 90-minute meeting on Wednesday delivered progress but no conclusive agreement, representatives from the Bucks, state, city and county agreed to meet again on Thursday.
Deadlines -- real or imagined -- typically help push the pace of complex negotiations.
But deadlines also tend to scare people, which probably helps explain why Bucks president Peter Feigin did a bit of two-step yesterday regarding the required timing of an arena financing package. Via Don Walker of the Journal-Sentinel:
Over the noon hour Tuesday, Peter Feigin, addressing a conference of commercial Realtors and shopping center executives, said, "The clock is ticking. This has to be wrapped up in the next 10 days."
However, late in the afternoon — and three hours after his comments were posted online — Feigin released a statement from the Bucks that attempted to backtrack.
"There is no immediate deadline for a financing plan and we're not creating one," it said. "We're simply hopeful that progress continues with our partners and throughout the legislative and political process."
Bucks' spokesman Jake Suski said Feigin had misspoke. He said Feigin didn't want to leave the impression that the Bucks were imposing their own deadline. "That wasn't his intent," Suski said.
Earlier, however, the Bucks president had been quite clear, saying if an arena financing deal doesn't get completed, "the Bucks will be gone from the state of Wisconsin."
The tone of Feigin's comments naturally spooked some people, though presumably that was also partially the intent. Striking the balance between urgency and confidence can be a tough needle to thread, especially given the cat-herding involved with multilateral negotiations involving the state, city, county and team on a $500 million project development that isn't even particularly well-defined at this point. A lack of public support for arena funding doesn't help, though it's also to be expected given the general lack of clarity that currently exists.
Hopefully things will become a bit clearer on Wednesday, when representatives from the Bucks, the governor's office, legislature, city and county will try to hash out who will pay what and how. A comprehensive solution may be unlikely, but it would be nice if some consensus could emerge regarding the level of each stakeholder's contribution and the specific mechanism for public funding.
Over the past month, key state republicans led by Senate Majority Leader Scott Fitzgerald and Assembly Speaker Robin Vos have broken from Gov. Scott Walker's $220 million jock tax proposal, offering up an alternate plan that would leverage $150 million in bonds issued by the Board of Commissioners of Public Lands. Using the BCPL seems reasonable and in many ways preferable to issuing revenue bonds at the state level, but the actual means of repaying the BCPL debt (kind of important!) is not entirely clear. Given Walker's stature among state republicans, the break between the two republican factions is interesting to say the least, particularly given that the new plan has raised some talk of new sales taxes -- the precise thing Walker's plan sought to avoid. I would assume a scaled-down version of Walker's original jock tax approach could also work, though the bigger issue may simply be the preference of the Fitzgerald camp to move the repayment obligation out of the state's lap in the first place.
Speaking of which, the other obvious pressure point is the role of the city and county, who (other than the Bucks) stand to benefit the most from a new arena project. State republicans (and their constituents) presumably aren't thrilled at the perception of Milwaukee getting a free ride from the state, though local officials have cried poor when pressured to up their stake. Mayor Tom Barrett suggested last week that the city and county could each provide $25 million -- mostly in land and infrastructure spending -- but that they're otherwise limited in their ability to increase funding without other tax increases. County Executive Chris Abele hasn't been quite as forthcoming about his plans, though he's been generally supportive of the project and has floated the useful idea of consolidating the Wisconsin Center District with the Bradley Center and its successor arena entity. That's a state issue though, so once again it's a matter that will need buy-in from a broader group of stakeholders.
The Bucks' own $250 million contribution -- $150 million from Wes Edens, Marc Lasry and company plus another $100 million from Herb Kohl -- has mostly been assumed constant, though that will presumably also be a subject for discussion. Issues like naming rights and what kind of rent the Bucks would pay have the potential to create huge swings in value for the various stakeholders, yet there's been nothing said publicly about how those might play into a final deal. Consider that last year Bucks investor Ted Kellner projected a deal would see $250 to $300 million in total private investment once naming rights, suites and other sponsorships were factored in, but that's seemingly the last we've heard of it publicly.
In any case, the situation is complex enough that it's easy to see it as a glass half empty -- or at least one $50 to $100 million short, with the clock ticking on a solution. But that also ignores the perspective of where we were a year ago, when $150 million in state funding would have seemed like a huge number to most of us. So if you want the optimist's view, consider that negotiations of this scale should involve some tension; every stakeholder wants to feel like the other parties had to reach a pain point before signing on the dotted line. And while there may still be a gap to the $500 million theoretically needed for a new arena, there are also huge financial incentives for all of the stakeholders to see it closed -- and soon. Bucks ownership has no interest in seeing the NBA buy back the team for just $25 million more than the team's sale price, especially if it means publicly failing as owners of a pro sports team. Neither Walker nor state leaders are eager to lose a state institution that will generate tens of millions in taxes in the next decade alone, especially considering that the Bradley Center will be a $100 million albatross around the state's neck if the Bucks leave. And city and county leaders won't want to miss out on a potentially transformative project for downtown, one whose impact would dwarf that of the city's proposed streetcar.
In short, the motivations are all there. Now how about some results?