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Bucks Arena Latest: Plan calls for naming rights revenues to fund arena operations, Kidd and Bucks' brass at County public hearing

By Frank Madden

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The Bucks' first annual summer block party on Saturday was a rousing (and well-attended) success, bringing together an estimated 10,000 fans (!) to see the Bucks unveil their sharp new uniforms. Thankfully, the jerseys themselves proved worthy of the spectacle, maintaining the organization's remarkable streak of hits since Wes Edens and Marc Lasry first landed on the shores of Lake Michigan over a year ago.

Saturday's festivities also a marked convenient time to celebrate Thursday's news that a public financing proposal for a new arena had mercifully been agreed to by state and local leaders. Still, it's not to suggest that anyone's ordering shovels just yet. If a picture is worth a thousand words, arena advocates will hope that the sight of Scott Walker, Robin Vos and Scott Fitzgerald flanked by Tom Barrett and Chris Abele could be worth $250 million towards a new downtown facility. But Fitzgerald also made it clear on Thursday that legislative approval of arena funding was still a major work in progress. Via Allison Bauter and Rich Kirchen:

"I don't really have a handle yet on where the support is," he said, adding that discussions are ongoing. "I think that will take a while. Now that (the plan is) out on the street, they will get a feel for what they can support and what they have concerns about."

Among the remaining questions is whether Republicans will have the votes necessary to pass a budget including the arena deal, or if the plan will require a separate up-down vote. Much of that uncertainty can likely be ascribed to the way the deal was done in the first place; given the complexity of the deal and in the interest of actually getting something done, representatives of Walker, Vos, Fitzgerald, Barrett, Abele and the Bucks had intentionally sought to limit the number involved in direct negotiations.

The downside is that few people had seen the fine print of the deal until after it was officially announced; not surprisingly, that left many rank-and-file legislators unwilling to offer much enthusiasm leading up to the big reveal. There's no guarantee they come around once they get the full scoop, but getting to this point does allow Walker, Fitzgerald and Vos to now figure out if the deal can gain the necessary support as-is, or if further horse-trading will be necessary. If the deal is broken out for a separate vote, don't be surprised to hear talk of further reducing the state's obligation, tweaking funding mechanisms and leaning on the Bucks for more up-front contributions. All of which underscores why the key stakeholders' first preference has been keeping the arena deal in the current budget; taking it out opens a Pandora's box of political posturing and gamesmanship, which could threaten a pragmatic (and expeditious) outcome.

One major point that was clarified over the weekend: aside from being on the hook for project cost overruns, the Bucks would also cover ongoing operations and maintenance costs for the new facility in exchange for naming rights revenues associated with the arena. The Journal-Sentinel notes that similar naming rights deals have been worth up to $4 million annually, though shifting the risk of ongoing maintenance to the Bucks would also mitigate a major source of long-term uncertainty for taxpayers. Indeed, the fact that taxpayers are on the hook for $100 million in Bradley Center maintenance costs over the next decade has been a major (and somewhat ironic) driver of legislative support for the new arena financing package. No one's going to claim the deal will be a money-loser for the Bucks -- they're not going to do stuff like this just to be charitable -- but from a risk standpoint it makes sense to shift that risk to a private entity.

As for the local angle, Mayor Tom Barrett offered his own insight into the plan and the negotiations that led up to it on Friday as part of a presentation to Milwaukee alderman. Sean Ryan of the Milwaukee Business Journal has the full scope, including this bit on the split of parking revenues and potential local hiring requirements. Naturally, Barrett touted his role in getting a fair deal for taxpayers, continuing a similar theme we saw

"They (Bucks executives) came to this conversation thinking they would get all of those dollars," Barrett said. "But we fought very, very, very hard to ensure that there would be a 50-50 split. That was one of the last elements here that was important to me and the city because we are going to be owning that."

Barrett said he also had to wrangle for local hiring requirements. Those set a goal that at least 30 percent of the hours on the construction project be done by Milwaukee residents, and that 10 percent be by residents of Milwaukee County. The deal is crafted so local workers on Northwestern Mutual’s downtown corporate headquarters project now under construction can transition to work on the arena, he said.

The local hiring issue had previously been raised by Milwaukee Democrats in the legislature, so that bit won't hurt the plan's prospects, especially if it gets split out from the overall budget. While Democrats are by definition expected to vote against Walker's budget bill (yay politics!), a separate vote on the arena would assuredly earn support from at least some Milwaukee Democrats, albeit at the cost of losing some Republicans who would otherwise vote in favor of the budget. Whether that trade is a net positive for the arena isn't clear, but there's a good chance we'll find out soon enough.

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There was a strong Bucks presence at tonight's County Board public hearing at the War Memorial, as team president Peter Feigin made the team's case for a $400 million ancillary development project. County Executive Chris Abele has proposed selling the long-vacant land to the Bucks for $1 as a means of facilitating the development, with the Board expected to vote on June 15. Note that the Board's decision is separate from the arena development itself, though that didn't stop the Bucks from bringing out the heavy artillery tonight.

Dan Schafer of Milwaukee Magazine argues that funding an arena may not be ideal public policy, but it's also a pragmatic option for a city in need of an economic and cultural moonshot.

When I interviewed John Daniels, chairman emeritus at Quarles & Brady, last fall about the big Downtown projects at stake, he lamented the city’s lack of a diverse environment.

"People don’t want to acknowledge it, but until you acknowledge that it’s something to work on, you won’t move it forward," he told me. "The way I look at it is if we do something really transformative, it’s going to help the entire community."

Make no mistake, the arena is not the solution to all of Milwaukee’s problems — far from it. But there is no other project of this scale capable of engaging the city and its diverse population the way this one could.

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