Publicly-financed arenas for privately-owned sports franchises are usually a bad deal for taxpayers. And the proposal for a new Milwaukee Bucks facility looks like a humdinger.
Patrick Small at Urban Milwaukee reports that city officials, including Mayor Tom Barrett, haven’t told residents exactly how much they could be on the hook for — though so far the Bucks have agreed to cover just $150 million of the arena’s $500 million price tag. “[T]here is still no public document with specific details,” writes Small, “and the numbers keep changing.”
When the New York Yankees built a new stadium in the Bronx, the city and state subsidized the development of thousands of parking spots with tax-exempt bonds. Small says parking for the new downtown Milwaukee arena figures into the Bucks deal as well.
[W]hen Ald. Nik Kovac asked why the mayor agreed to give the Bucks half the income from a parking facility the city would build for the team, Barrett revealed that the Bucks first demanded all the parking revenue, and also wanted to control the facility and have it be tax exempt.
The Bucks will nominally contribute $8 million for the parking facility and land it sits on, but under the deal that amount will later be returned to the Bucks from property taxes collected in a tax incremental financing (TIF) district the city will create for the Bucks project. In short, the Bucks will have no out-of-pocket costs the for parking facility while the city would take on $35 million in bonding to build it, yet would only get half the income, with the other half going to the Bucks. The city’s estimated take of $350,000 a year means it would take 100 years (and that would be with zero percent interest) to pay off the bonds. By that time there may be at least two more new arena projects, given the current average life span of NBA arenas.
There’s more. Small says the city has agreed to tear down a city-owned parking garage, built in 1988, to build a new one for the Bucks a block away. Writes Small: “The mayor defended the scheme by saying that building a parking garage is what’s expected each time Milwaukee builds a new arena.”
Elsewhere on the Network today: Greater Greater Washington reports that the Federal Transit Administration is demanding big changes from the DC transit system, City Theorist maps latent transit demand in New York City, and Global Site Plans says São Paulo wants to reduce downtown motor vehicle traffic by reducing parking minimums and adding transit and bike infrastructure.