A big splash was created when Herb Kohl sold the Milwaukee Bucks earlier this year. One of the most pressing issues has been the Bradley Center and what will happen with where they play basketball.
Depending on how you price out the new arena, 40 to 50 percent of the costs are already accounted for. Presuming it will cost in the area of $500 million, the new owners and the old owner have already brought $200 million to the table. The new owners will sell 20 percent of the team to local investors, so that should net an additional $100 million. Naming rights can go for $4-5 million a year in the NBA, so for 20 years that’s somewhere in the area of $80-100 million. What we are really talking about is a $100 million to $150 million problem.
To achieve this Alderman Joe Davis wants to increase Milwaukee’s bonding authority by $100 million during the upcoming 2015 budget process. This wouldn’t commit the funds yet, but it would make it possible for the debt to be issues by the city for flexibility purposes.
According to Davis, this initiative would minimize the taxes the public would pay, but would only accrue debt if city leaders would further instruct the Comptroller to issue bonds for this specific purpose. The City of Milwaukee has bonding authority and could bond for $100-150 million, yet remain under the debt limit (which will be calculated when the State of Wisconsin releases the 2014 equalized value for the city in the month of August). Bond rating agencies like to see cities carry debt limited to a maximum of 65 to 70 percent of the ceiling. Currently, the city’s equalized value of outstanding debt is 58 percent of the limit.
One idea is to spread the cost of the arena across many of the communities in the greater Milwaukee area. Moving the tax that’s collected for Miller Park to the new arena is a feasible way to have this done. This idea has received pushback from many of the surrounding communities that want their sales tax to go down from the original Miller Park tax.