A Milwaukee Bucks arena financing plan may include a tax on NBA athletes competing in the arena, generating upwards of $150 million over 20 years.Bucks owners Wes Edens and Marc Lasry have been working on a financing plan for a new Bucks arena to replace the outdated BMO Harris Bradley Center. So far there’s about $300 million on the table: Lasry and Edens have committed $100 million, former Bucks owner and U.S. Senator Herb Kohl has committed another $100 million, and private investors are committed to another $100 million. With a new arena expected to cost between $400 million and $500 million, finding a source like a tax on athletes to supply backing for state-issued bonds is welcome news for Bucks fans, as there’s the distinct chance the Bucks will be out of town if there’s no arena by 2017.
“I think that how we actually pay for it and what the form of the financing is and kind of all the technical nuances at some point will be very important,” Edens said in an interview with the Journal Sentinel. “To me it’s less important today than just the notion that, let’s just agree what’s on the table with the benefit of the team being in town. Once we have done that, we’ve got a really useful place to start the dialogue.”
Using the tax year 2012, a report from the state Fiscal Bureau said the amount of taxes that could be captured totaled $10.7 million. Assuming a flat, 20-year repayment structure on the bonds, $10.7 million in annual revenue could support $150 million in state general-obligation bonding.
“The total 20-year cost to repay the $150 million in general obligation debt would be $214 million, which includes $64 million in interest costs,” the report states.
As stated, there’s the distinct chance the team could be moved if no arena plan is in place: Seattle is certainly waiting in the wings, and some Louisville investors say an NBA team would draw well there. The Edens/Lasry group does have time to put together a plan. One big issue will be political support for a Bucks arena financing: With co-owner Marc Lasry meeting with President Barack Obama and Democratic candidate Mary Burke during the recent gubernatorial election, Wisconsin Assembly Speaker Robin Vos crudely suggested that Lasry would do better to support Republicans than Democrats:
“I think it makes it harder for me to sell to our caucus,” Vos said. “Don’t forget, for people who live in most of the rest of Wisconsin, they look at Milwaukee as a place that already gets too much of our money. And now what you’re doing is making an even more difficult decision happen for a lot of folks around the state. So they’ve got to be a lot smarter with their technique. I mean, I want to bring those jobs and keep them in Wisconsin, but having us give hundreds of millions of dollars to big-time donors who give to Democrats, but also have billions of dollars of their own? That’s a hard sell. So I don’t think they need to do anything that makes my job more difficult.”