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Author Topic: Bucks to unveil $500 million stadium plan just north of BC  (Read 250642 times)

Litehouse

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #550 on: May 15, 2015, 11:00:02 AM »
Here's an article on how Milwaukee's downtown attractions are more spread out than other similar cities.  This is why the JS/Arena location would have been better for the city to create more of a critical mass.
http://www.jsonline.com/business/downtown-seen-as-less-active-because-attractions-are-spread-over-wide-area-b99498771z1-303813461.html

Pakuni

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #551 on: May 27, 2015, 03:47:02 PM »
Looks like taxpayers are about to be on the hook for about half of the stadium's cost.

http://www.jsonline.com/news/statepolitics/arena-negotiations-continue-no-deal-imminent-b99508223z1-305192861.html


GGGG

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #552 on: May 27, 2015, 04:03:54 PM »
Looks like taxpayers are about to be on the hook for about half of the stadium's cost.

http://www.jsonline.com/news/statepolitics/arena-negotiations-continue-no-deal-imminent-b99508223z1-305192861.html


Let's say "government entities" are on the hook for that much because I don't see a lot of downside risk for the average Wisconsin citizen.

"The state would be responsible for bonds worth more than $55 million.

That figure covers only the amount of the initial bonds, but not interest costs. The state would commit $4 million a year over 20 years, or $80 million total, to cover its shares of principal and interest costs."


So this is covered by the "jock tax" right?  If the Bucks leave, this revenue leaves as well.


"The Wisconsin Center District would add $93 million."

How does the Wisconsin Center District cover these bonds?  Do they have a taxing authority on those who buy tickets to Center events?


"The City of Milwaukee would spend $35 million on a new 1,240-vehicle parking structure and provide $12 million in tax incremental financing."

OK, this is purely on the City's taxpayers.  (But the City will also reap the revenue from new development around the site.)


"In the most unusual feature of the deal, Milwaukee County would "certify" tens of millions of dollars in uncollected county debt. The county, in effect, would then count on the state to recover at least $4 million of that debt a year for 20 years, a total of $80 million that would then be funneled to the arena project."

I don't know what this means.  Does this also get covered by the state's jock tax?

Litehouse

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #553 on: May 27, 2015, 04:05:53 PM »
Based on that summary, it looks like the state is getting a heck of a deal.  I like the idea of putting everything under one board, but concerned about who will actually be on that board.

Litehouse

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #554 on: May 27, 2015, 04:08:22 PM »

"The Wisconsin Center District would add $93 million."

How does the Wisconsin Center District cover these bonds?  Do they have a taxing authority on those who buy tickets to Center events?


Those bonds would be repaid using the three taxes the district levies in Milwaukee County: 3% on car rentals, 2.5% on hotel rooms and 0.5% on restaurant food and beverage sales.

GGGG

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #555 on: May 27, 2015, 04:12:22 PM »
Those bonds would be repaid using the three taxes the district levies in Milwaukee County: 3% on car rentals, 2.5% on hotel rooms and 0.5% on restaurant food and beverage sales.


Ah OK.  So sales taxes paid by non-citizens in many cases.  Does this mean that those taxes will increase?

mu03eng

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #556 on: May 27, 2015, 04:13:37 PM »


"The Wisconsin Center District would add $93 million."

How does the Wisconsin Center District cover these bonds?  Do they have a taxing authority on those who buy tickets to Center events?



Milwaukee County: 3% on car rentals, 2.5% on hotel rooms and 0.5% on restaurant food and beverage sales.

Center District has the above revenue streams, in theory they could raise those taxes to generate additional revenue.  However, in the article the plan was to use those funds in 2026.  Right now the Center District revenue is used to cover the debt on the theater upgrade and other stuff(convention center)....that debt is paid off by 2026 so it's essentially re-purposing the revenue to the back half of the arena debt (state and city pay first then the center district etc)


I also guess that the county portion is essentially a debt against county assets that is then paid off by non-county revenue streams (state and center district revenue).  So to get to the full $550 million the county is taking on some debt but will use a shell game to pay off the debt, which keeps the county board from getting involved.
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mu03eng

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #557 on: May 27, 2015, 04:14:58 PM »

Ah OK.  So sales taxes paid by non-citizens in many cases.  Does this mean that those taxes will increase?

See my post....I believe it's a repurposing of the revenue that's currently used on the theater and convention center to pay for the later years debt.  Which is why they are expanding the reach of the Center District.
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Pakuni

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #558 on: May 27, 2015, 04:17:27 PM »

Let's say "government entities" are on the hook for that much because I don't see a lot of downside risk for the average Wisconsin citizen.

"The state would be responsible for bonds worth more than $55 million.

That figure covers only the amount of the initial bonds, but not interest costs. The state would commit $4 million a year over 20 years, or $80 million total, to cover its shares of principal and interest costs."


So this is covered by the "jock tax" right?  If the Bucks leave, this revenue leaves as well.

Do only NBA players pay the jock tax? Or is only the NBA portion of the jock tax being used? And are professional athletes who pay the jock tax not taxpayers?
Regardless, it's funding that otherwise would be going to the general fund that will a) either need to be replaced through another revenue stream or b) be paired with a corresponding funding cut, which would mean fewer services for state residents.
So, any way you paint it, taxpayers are paying.

Quote

"The Wisconsin Center District would add $93 million."

How does the Wisconsin Center District cover these bonds?  Do they have a taxing authority on those who buy tickets to Center events?

WCD says all its operations are funded through operating revenues, but they do collect taxes (hotel, food and beverage, car rentals, etc.) to pay off bonds that led to its creation in the first place. So, again, taxpayers are footing the bill.


Quote
"The City of Milwaukee would spend $35 million on a new 1,240-vehicle parking structure and provide $12 million in tax incremental financing."

OK, this is purely on the City's taxpayers.  (But the City will also reap the revenue from new development around the site.)

Assuming there is substantial new development which, we know from history, is far from a sure thing.


Quote

"In the most unusual feature of the deal, Milwaukee County would "certify" tens of millions of dollars in uncollected county debt. The county, in effect, would then count on the state to recover at least $4 million of that debt a year for 20 years, a total of $80 million that would then be funneled to the arena project."

I don't know what this means.  Does this also get covered by the state's jock tax?

Not 100 percent sure, but it sounds like the county is owed money and will turn over to the state the right to collect that money. The state would then, rather than giving the money to the county, use it for stadium funding. So while the taxpayers aren't necessarily losing anything - after all, its uncollected taxes right now - they also won't get money that's owed to them.
If that makes sense.

I'm not opposed to this deal - and as a MU fan living in Illinois, don't really care who foots the bill - but it's disingenuous to claim taxpayers aren't funding half of this. Whether that taxpayer is a jock, a visitor, or a resident, it's still tax money. And remember, these aren't "new" tax revenues. For every tax dollar funneled into this project is a tax dollar not going elsewhere, and that money then will either need to be replaced with another tax dollar or be matched with a corresponding reduction in service.
« Last Edit: May 27, 2015, 04:19:38 PM by Pakuni »

GGGG

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #559 on: May 27, 2015, 04:19:33 PM »
Do only NBA players pay the jock tax? Or is only the NBA portion of the jock tax being used? And are professional athletes who pay the jock tax not taxpayers?
Regardless, it's funding that otherwise would be going to the general fund that will a) either need to be replaced through another revenue stream or b) be paired with a corresponding funding cut, which would mean fewer services for state residents.
So, any way you paint it, taxpayers are paying.

WCD says all its operations are funded through operating revenues, but they do collect taxes (hotel, food and beverage, car rentals, etc.) to pay off bonds that led to its creation in the first place. So, again, taxpayers are footing the bill.


Assuming there is substantial new development which, we know from history, is far from a sure thing.


Not 100 percent sure, but it sounds like the county is owed money and will turn over to the state the right to collect that money. The state would then, rather than giving the money to the county, use it for stadium funding.

I'm not opposed to this deal - and as a MU fan living in Illinois, don't really care who foots the bill - but it's disingenuous to claim taxpayers aren't funding half of this. Whether that taxpayer is a jock, a visitor, or a resident, it's still tax money. And remember, these aren't "new" tax revenues. For every tax dollar funneled into this project is a tax dollar not going elsewhere, and that money then will either need to be replaced with another tax dollar or be matched with a corresponding reduction in service.


In looking at previous figures, the jock tax on NBA players is currently about $6.5M annually, with anticipated growth to $13M over time.  I guess if you count the 20 year payment on state bonds and the county debt, that looks to be similar to the source of these payments.

Of course the $6.5M is currently being used now by the state, so it's not like it is "new" money.

And you are right, "taxpayers" are footing the bill.  Just a lot of those taxpayers aren't residents. 

mu03eng

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #560 on: May 27, 2015, 04:27:13 PM »

In looking at previous figures, the jock tax on NBA players is currently about $6.5M annually, with anticipated growth to $13M over time.  I guess if you count the 20 year payment on state bonds and the county debt, that looks to be similar to the source of these payments.

Of course the $6.5M is currently being used now by the state, so it's not like it is "new" money.

And you are right, "taxpayers" are footing the bill.  Just a lot of those taxpayers aren't residents. 

Additionally, a lot of that tax revenue is lost without the deal, so it's money that would have to be replaced anyway.  In theory you are paying now to hopeful increase the revenue in other places and retain the targeted revenue long term once the debt is paid down.
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source?

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #561 on: May 27, 2015, 05:08:55 PM »
Do only NBA players pay the jock tax? Or is only the NBA portion of the jock tax being used? And are professional athletes who pay the jock tax not taxpayers?
Regardless, it's funding that otherwise would be going to the general fund that will a) either need to be replaced through another revenue stream or b) be paired with a corresponding funding cut, which would mean fewer services for state residents.
So, any way you paint it, taxpayers are paying.



What replaces this tax revenue when the Bucks leave?

Pakuni

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #562 on: May 27, 2015, 05:22:02 PM »
What replaces this tax revenue when the Bucks leave?

Nothing.
So it's no loss either way. Or, more appropriately, a loss either way.
If the Bucks stay, any jock tax their presence generates goes to the stadium, not state coffers.
If the Bucks leave, there's no need for a stadium.

But the reality is, this is money currently going into the general fund. Under either scenario, that money will be disappearing and either needs to be replaced or spending will have to be correspondingly reduced.

Again, as an Illinois resident, I don't really care who pays for the stadium, and I want it built. But it would be wrong to suggest there's no impact on the taxpayers here. The truth is, taxpayers - directly and indirectly - are paying for half of it.
« Last Edit: May 27, 2015, 05:30:44 PM by Pakuni »

martyconlonontherun

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #563 on: May 27, 2015, 07:01:26 PM »
I look at it as basically a wash economically but huge benefits for quality of life in downtown Milwaukee if this thing is built right. Whee. Was the last time the city had this many huge projects going on at once?

Dr. Blackheart

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #564 on: May 27, 2015, 07:27:30 PM »
The white elephant is 100% on the taxpayers whether there is a new arena or not (Bradley Center).  In fact, the taxpayers could,claim four white elephants in that district.  It is a total taxpayer hose job if the arena doesn't get done.  And absolutely no upside potential.  All costs, all risks.

If the new arena is built, it is shared public and private, with a lot of upside potential.  Risk and reward more balanced.

That said, the ideal package for the taxpayers and Bucks was to knock down the JS building, Arena, BC and Theater, and put in the new arena and expand the convention center space to make it viable.  Three taxpayers white elephants knocked down and off the public subsidy payroll, and the fourth expanded to take on major conventions so it is revenue positive with increased utilization.  And leaving a lot more empty space for private development north of the BC.

Instead, Milwaukee again settles for the path of least resistance...and not without a struggle of stupidity to even get to that option.  One must balance the cost of subsidy and underutilization with the potential investment.  It really isn't close...but Milwaukee is afraid of the future.

monkeyman34

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #565 on: May 27, 2015, 08:03:29 PM »
Nothing.
So it's no loss either way. Or, more appropriately, a loss either way.
If the Bucks stay, any jock tax their presence generates goes to the stadium, not state coffers.
If the Bucks leave, there's no need for a stadium.

But the reality is, this is money currently going into the general fund. Under either scenario, that money will be disappearing and either needs to be replaced or spending will have to be correspondingly reduced.

Again, as an Illinois resident, I don't really care who pays for the stadium, and I want it built. But it would be wrong to suggest there's no impact on the taxpayers here. The truth is, taxpayers - directly and indirectly - are paying for half of it.

I'm sorry, but I have to call you out on this.  If the Bucks leave, that's $6.5m of taxes that the state will no longer receive, it's not as simple as "there's no need for a stadium."  On top of that, if they leave and a new stadium is not built, the state (I believe ... this has been talked about at length) is on the hook for something like $100m over the next 10 years to keep the BC running.

Groin_pull

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #566 on: May 27, 2015, 08:13:40 PM »
The white elephant is 100% on the taxpayers whether there is a new arena or not (Bradley Center).  In fact, the taxpayers could,claim four white elephants in that district.  It is a total taxpayer hose job if the arena doesn't get done.  And absolutely no upside potential.  All costs, all risks.

If the new arena is built, it is shared public and private, with a lot of upside potential.  Risk and reward more balanced.

That said, the ideal package for the taxpayers and Bucks was to knock down the JS building, Arena, BC and Theater, and put in the new arena and expand the convention center space to make it viable.  Three taxpayers white elephants knocked down and off the public subsidy payroll, and the fourth expanded to take on major conventions so it is revenue positive with increased utilization.  And leaving a lot more empty space for private development north of the BC.

Instead, Milwaukee again settles for the path of least resistance...and not without a struggle of stupidity to even get to that option.  One must balance the cost of subsidy and underutilization with the potential investment.  It really isn't close...but Milwaukee is afraid of the future.

It wouldn't be Milwaukee if it was bold, aggressive and forward thinking.

GGGG

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #567 on: May 28, 2015, 09:07:00 AM »
The white elephant is 100% on the taxpayers whether there is a new arena or not (Bradley Center).  In fact, the taxpayers could,claim four white elephants in that district.  It is a total taxpayer hose job if the arena doesn't get done.  And absolutely no upside potential.  All costs, all risks.

If the new arena is built, it is shared public and private, with a lot of upside potential.  Risk and reward more balanced.

That said, the ideal package for the taxpayers and Bucks was to knock down the JS building, Arena, BC and Theater, and put in the new arena and expand the convention center space to make it viable.  Three taxpayers white elephants knocked down and off the public subsidy payroll, and the fourth expanded to take on major conventions so it is revenue positive with increased utilization.  And leaving a lot more empty space for private development north of the BC.

Instead, Milwaukee again settles for the path of least resistance...and not without a struggle of stupidity to even get to that option.  One must balance the cost of subsidy and underutilization with the potential investment.  It really isn't close...but Milwaukee is afraid of the future.


They tried to go for the JS space, but my understanding is that the JS thinks their building is worth a lot more than anyone else seems to.

And I would argue that the Arena is a needed venue in Milwaukee.  It's a perfect place for UWM, the Wave, etc.  There really is no replacement for them if you tore it down. 

Pakuni

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #568 on: May 28, 2015, 09:22:31 AM »
I'm sorry, but I have to call you out on this.  If the Bucks leave, that's $6.5m of taxes that the state will no longer receive, it's not as simple as "there's no need for a stadium."  On top of that, if they leave and a new stadium is not built, the state (I believe ... this has been talked about at length) is on the hook for something like $100m over the next 10 years to keep the BC running.

You misunderstand.
Yes, if the Bucks leave, the state loses the portion of jock tax revenues their presence generates.
But under this deal, that money - or at least the majority of it - goes to funding the stadium. So the net loss isn't the $6.5 million you think it is.

And yes, the state would be on the hook for BC costs, but some of those costs they'll be on the hook for regardless (i.e. debt service) and that also doesn't account for revenues.

Again, I'm not sure what the controversy here is. I'm not saying this is a bad deal or that you or anyone else should oppose it. But it's inaccurate to argue that taxpayers aren't carrying a large share of the costs here, because they are.

Nukem2

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #569 on: May 28, 2015, 09:42:34 AM »
You misunderstand.
Yes, if the Bucks leave, the state loses the portion of jock tax revenues their presence generates.
But under this deal, that money - or at least the majority of it - goes to funding the stadium. So the net loss isn't the $6.5 million you think it is.

And yes, the state would be on the hook for BC costs, but some of those costs they'll be on the hook for regardless (i.e. debt service) and that also doesn't account for revenues.

Again, I'm not sure what the controversy here is. I'm not saying this is a bad deal or that you or anyone else should oppose it. But it's inaccurate to argue that taxpayers aren't carrying a large share of the costs here, because they are.
But, many of those taxpayers will not be residents ....

GGGG

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #570 on: May 28, 2015, 09:48:33 AM »
But, many of those taxpayers will not be residents ....

Here is how I see it:

State of Wisconsin residents will be responsible for covering the redirected jock taxes, but since those would go away without a new arena, they will be covering them anyway.  They would also be responsible for anytime they eat out, rent a car or stay in a hotel room in Milwaukee County.  The former is the most likely, but is a fairly small amount.

City residents would be responsible for the parking garage and the cost of the TIF, but they would also capture the upside of any development in the area.  In the long run, they could come out ahead actually. 

Jocks who play in Milwaukee are just seeing their income taxes to Wisconsin redirected.  It doesn't substantially affect them either way.  (Unless the Bucks move to a state with a lower tax rate.)

Am I missing something?

Pakuni

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #571 on: May 28, 2015, 10:18:22 AM »
Here is how I see it:

State of Wisconsin residents will be responsible for covering the redirected jock taxes, but since those would go away without a new arena, they will be covering them anyway.  They would also be responsible for anytime they eat out, rent a car or stay in a hotel room in Milwaukee County.  The former is the most likely, but is a fairly small amount.

City residents would be responsible for the parking garage and the cost of the TIF, but they would also capture the upside of any development in the area.  In the long run, they could come out ahead actually. 

Jocks who play in Milwaukee are just seeing their income taxes to Wisconsin redirected.  It doesn't substantially affect them either way.  (Unless the Bucks move to a state with a lower tax rate.)

Am I missing something?

Milwaukee County residents are giving up $80 million.

GGGG

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #572 on: May 28, 2015, 10:34:02 AM »
Milwaukee County residents are giving up $80 million.

OK, I still don't quite understand the county's contribution.  Are they simply giving up on $80 million in uncollected debt to the state, and the state is going to collect that debt and use it for this project?  So what kind of debt is this?

Pakuni

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #573 on: May 28, 2015, 10:48:29 AM »
OK, I still don't quite understand the county's contribution.  Are they simply giving up on $80 million in uncollected debt to the state, and the state is going to collect that debt and use it for this project?  So what kind of debt is this?

That's my understanding.
Though it appears that if the state is unable to collect that $80 million, the state will deduct the difference from the amount of tax revenue it shares with the county.
In other words, if the state can collect only half that $80 million, it will reduce by $40 million the amount of money it gives the county.

GGGG

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Re: Bucks to unveil $500 million stadium plan just north of BC
« Reply #574 on: May 28, 2015, 10:51:19 AM »
That's my understanding.
Though it appears that if the state is unable to collect that $80 million, the state will deduct the difference from the amount of tax revenue it shares with the county.
In other words, if the state can collect only half that $80 million, it will reduce by $40 million the amount of money it gives the county.


OK, and this is a transaction that is legal for the County Executive to undertake without having to involve the County Board right?  Or at least that's the presumption?

Watch the County Board file a lawsuit, but my guess is that if it is in the state budget, such a lawsuit will have no standing.