New Stadium Imminent?

[ThatDude]

Sorry.  I took a chance that you were from the area.

The mayor of Milwaukee is an invisible man.  He doesn't even offer opinions on things related to Milwaukee much less offer leadership on said topics. I honestly have no idea what he does that he would consider fulfilling his mayoral duties.

The Mayor has a lot of power and his words or actions could go a looong way to making things happen. Basically, if he is not active in the pursuit to keeping the team in Milwaukee then theres no hope.

[reinko]

If Detroit can figure out a way to build the new Red Wings stadium (coming in 2016) I'm pretty confident that Milwaukee will get it worked out. The Wings stadium is going to be a 400 million dollar building with Ilitch paying for half of it. We're talking about a pretty similar situation here as far as private vs public funding.

Not quite this simple,  at least according to this.

http://deadspin.com/detroit-scam-city-how-the-red-wings-took-hockeytown-fo-1534228789

[humanlung]

My question is what does Milwaukee get out of it?  Adding a bunch of bars, restaurants usually means low wage, service related jobs, low paying, low tax income.  That doesn't mean you don't do it, but often it isn't the gangbuster payoff that people are sold on.  They hear things like "hundreds of jobs"...sounds great....what kind of jobs?  Are 85% of them waiters, waitresses, cooks, bartenders, bus boys, etc? 

To me, this is where the ROI comes into play.  Qty is great, but what are the details.

Are you serious?

Milwaukee gets tax revenues out of it.  Converting an empty, decaying (and perhaps abandoned) warehouse into a condo building is a massive, sustainable increase in property tax revenue.  Same thing goes for street level shops.  Multiply this by all the buildings in the Third Ward that have been redeveloped.  It's a HUGE number.

And who employs all those "low wage, service related" people like bartenders, servers, etc...?  Business owners do.  If successful, these owners are taxed and contribute substantially to the tax base. 

[Spotcheck Billy]

Do you people understand how much business the Bucks/MU/Admirals drive to businesses downtown?  I have friends who own a bar on Water Street and they count on those events.  That business is not unique.  Underestimating the ripple effect of letting the Bucks go would be a serious mistake that would definitely show up in a loss of tax revenue from businesses that see profitability go down/away.

So how much are the bars/restaurants willing to contribute to the new arena fund?

[reinko]

Are you serious?

Milwaukee gets tax revenues out of it.  Converting an empty, decaying (and perhaps abandoned) warehouse into a condo building is a massive, sustainable increase in property tax revenue.  Same thing goes for street level shops.  Multiply this by all the buildings in the Third Ward that have been redeveloped.  It's a HUGE number.

And who employs all those "low wage, service related" people like bartenders, servers, etc...?  Business owners do.  If successful, these owners are taxed and contribute substantially to the tax base. 

Most bar owners (many of who bartend), bartenders, and servers pay pennies on the dollar of taxes they should pay. 

Straight cash homey.

[humanlung]

Most bar owners (many of who bartend), bartenders, and servers pay pennies on the dollar of taxes they should pay. 

Straight cash homey.

Ok, cuz...you base your statement on what data and analysis? 

[warriorchick]

Ok, cuz...you base your statement on what data and analysis?  

I have done my share of work in the service industry, and I can tell you that no one I have ever met reports all of their tips for taxes.  You have to report the tips that are on a credit card, but cash tips -- forget it.

Bars are notorious for not reporting all of the income.  When I was in public accounting, one of our clients was one of the popular bars on Marquette's campus.  It was common knowledge in our office that the bar had two cash register, but only recorded the receipts from one of them on their books.

[Canned Goods n Ammo]

Are you serious?

Milwaukee gets tax revenues out of it.  Converting an empty, decaying (and perhaps abandoned) warehouse into a condo building is a massive, sustainable increase in property tax revenue.  Same thing goes for street level shops.  Multiply this by all the buildings in the Third Ward that have been redeveloped.  It's a HUGE number.

And who employs all those "low wage, service related" people like bartenders, servers, etc...?  Business owners do.  If successful, these owners are taxed and contribute substantially to the tax base. 

Right, but have the buildings in the 3rd ward been redeveloped because of a new basketball arena, or because there was demand? Surely the city helped the thrid ward, but was it 300million worth of help?

There are a lot of high end restaurants opening in Walker's Point. Is that because the city is building an arena, or because there is simply demand for that kind of dining?

The eastside has seen a TON of condo development in the past 10 years. Is that because of the Bucks arena, or because of the demand for housing in that neighborhood?

I'm all for the city incentiving/assisting with development, but I'm not sure 300m for a basketball arena is worth it. If they can get the taxpayer cost down, then it might be worth it for the city.

I guess we'll see.

As a resident, I'm not really on board with "Get it done". I'm on board with "Show me how this works".

[reinko]

Ok, cuz...you base your statement on what data and analysis? 

Common sense.  

Go ask any bartender or server if they report 100% of tips to the IRS.  You will get laughed at.

[humanlung]

I have done my share of work in the service industry, and I can tell you that no one I have ever met reports all of their tips for taxes.  You have to report the tips that are on a credit card, but cash tips -- forget it.

Bars are notorious for not reporting all of the income.  When I was in public accounting, one of our clients was one of the popular bars on Marquette's campus.  It was common knowledge in our office that the bar had two cash register, but only recorded the receipts from one of them on their books.

Tips I know.  He was talking about owners, SOME of whom bartend (although these tips are nothing in the grand scheme of things).

[Canned Goods n Ammo]

But you don't necessarily need to get them from out of state.  Get visitors from Mequon, Brookfield, Waukesha, Madison, Sheboygan, Racine etc.  If they spend their entertainment dollars downtown instead of elsewhere, it's good for Milwaukee.

You're right, but if the city is going to spend $300million, we better hope they are getting more than $ from the surrounding metro and Sheyboygan.  

I'm not sure attracting suburbanites to downtown is really a big enough economic lift to justify the cost of a new "entertainment district". We're going to need some out of state money... that's where you can really find some economic growth vs redistribution of Wisconsin entertainment dollars.

[humanlung]

My question is what does Milwaukee get out of it?  Adding a bunch of bars, restaurants usually means low wage, service related jobs, low paying, low tax income.  That doesn't mean you don't do it, but often it isn't the gangbuster payoff that people are sold on.  They hear things like "hundreds of jobs"...sounds great....what kind of jobs?  Are 85% of them waiters, waitresses, cooks, bartenders, bus boys, etc? 

To me, this is where the ROI comes into play.  Qty is great, but what are the details.

Guns, I was responding to this post - where Chicos questioned what Milwaukee got out of giving breaks for the redevelopment of the Third Ward.  It had nothing to do with a new arena.  Maybe I misread the intent of his post but I thought he was talking about that.

And...I am done with this thread.  The sad fact is that thanks to MPS, Milwaukee is the least educated city/town in the entire state.  There is also a sense of entitlement that is almost breathtaking.  These two things will make it almost impossible to get a deal of this size done.  

As I have said many times, the track record of stupid decisions surpasses good decisions by a wide margin when it comes to development programs in this area.  I have little doubt history will repeat itself.

Good luck to all.

[BCHoopster]

How is Golden State building a new 18,000 seat arena?  How is that being funded?

[reinko]

How is Golden State building a new 18,000 seat arena?  How is that being funded?

http://bit.ly/Ptysl0

[warriorchick]

Tips I know.  He was talking about owners, SOME of whom bartend (although these tips are nothing in the grand scheme of things).

Um, read the second paragraph of my post.

[Benny B]

Um, read the second paragraph of my post.

I'll second Chick's second paragraph.  I wasn't in public accounting, but I can tell you first hand that I could name a half dozen bars where I saw the cash drawer simply left open during busy periods, i.e. not every transaction was being "rung up" (i.e. recorded).  Of course, this will likely be claimed as a matter of convenience regardless of whether those open-drawer revenues were being claimed.

Most of these are mom-and-pop shops, but one was actually corporate-owned.  The former never surprised me, the latter most certainly did.

[Canned Goods n Ammo]

Regardless of what is being reported for wages and tips or not, I can't imagine that there is a great ROI on the city spending 300million in order to keep a bunch of bars and restaurants in business for the next 25 years.

IF Milwaukee does move forward with building a new facility, it needs to be apart of a bigger plan to attract more economic growth (ie REAL careers, REAL development, REAL $ coming from outside the city and outside the state).

Building a new arena and getting a bunch of remodeled bars and restaurants isn't going to generate enough impact (in my mind). You've got to sell a lot of Miller Lites and burgers to get to 300m in tax revenue.

[MU111]

You're right, but if the city is going to spend $300million, we better hope they are getting more than $ from the surrounding metro and Sheyboygan.  

I'm not sure attracting suburbanites to downtown is really a big enough economic lift to justify the cost of a new "entertainment district". We're going to need some out of state money... that's where you can really find some economic growth vs redistribution of Wisconsin entertainment dollars.

Guns, I agree with your sentiments on this matter.  The sports fan in me wants a new arena but the urban planner in me thinks $300 million in taxpayer funding is a raw deal for metro residents.  I was originally gung ho about a new arena, but have realized that we need to get much more private money to make this thing work.

The economic impact of new stadiums is next to nothing, at best.  Numerous studies have shown that building new stadiums does not increase per capita income of the metro area in question, redistributes entertainment spending from other establishments to the surrounding stadium's area, and don't really even generate significant spending from outsiders.  Obviously, there are opportunity costs to building a new arena, as well, as taxpayer money could be instead used for rebuilding infrastructure, schools, or whatever else.

It's ridiculous too when officials are complaining about the BC being old and worn out.  Well, yeah, every stadium has O&M costs.  A new one would have plenty, as well.  If the NBA weren't proclaiming that the Bucks would be gone by 2017 without a new arena, would officials be more interested in repairs to the BC?  A repair project of $40 million is a lot more to stomach than $500 million.  Actually, they still would want the new arena- more money to line the owners' pockets.  You don't see English Premier League clubs threatening to leave if they don't get now stadiums.  In fact, it is incredibly hard to build new there, because most aren't funded by much taxpayer money.

Rant over.

[Benny B]

The bottom line here is that unless the Bucks can figure out how to make Milwaukee a destination for a much more substantial number fans outside the metro area that they currently do, then there won't be anywhere near enough marginal tax revenue to ever justify a new arena.

Therefore, the pro-arena crowd needs to abandon this argument and start fighting on another merit point.

[MUSF]

Once again, you won't have to pay for a new arena. So don't sweat it. Too many forces are at work to make sure it doesn't happen.

Ladies and gentlemen, your Seattle Bucks.....

Don't forget that the public arena funding we are discussing now is the same thing that caused the Sonics to leave Seattle. Taxpayers in Seattle sunk a bunch of money into renovating the Key Arena, and team ownership demanded public funding for a new facility only a few years later. What makes you think that they are going to be receptive to public financing this time around?

[source?]

 You don't see English Premier League clubs threatening to leave if they don't get now stadiums.  In fact, it is incredibly hard to build new there, because most aren't funded by much taxpayer money.

This is maybe the worst comparison of the thread. EPL teams can't threaten to move because they are in (a) an absolutely saturated market where cities as small as 90,000 have professional teams and most major cities have multiple teams, (b) the most popular sport by far in that country (a position basketball can't even come close to claiming), and (c) the shells of massive soccer stadiums are easier to alter than replace. Dare I add one more "apples to oranges" statement to the thread?

[MU111]

Fine.  I'll give you that one, but it doesn't negate the rest of my argument.

[source?]

Fine.  I'll give you that one, but it doesn't negate the rest of my argument.

Agreed. I am pro getting a new arena, but there are definitely reasonable arguments to either position.