Here & Now

Tim Sheehy On Latest In Milwaukee Bucks Arena

Frederica Freyberg:

I’m Frederica Freyberg. Tonight on “Here & Now,” to build or not to build. Both sides of the proposed new Bucks arena. Chief Justice Shirley Abrahamson’s attorney is here. Her lawsuit challenges the referendum passed by voters Tuesday that almost certainly strips her of her leadership position. Our Budget Watch report looks at teacher licensing. But first, Tuesday’s statewide election results also included a return to the state’s high court for incumbent Ann Walsh-Bradley. She defeated James Daley by a 16-point margin. Now for continuing coverage on our Budget Watch series: On Wednesday, investors unveiled drawings of a proposed billion dollar new Milwaukee Bucks arena. The Bucks’ franchise is banking on Scott Walker’s proposed $220 million state bonding plan for the arena. Former Bucks owner and U.S. Senator Herb Kohl pledges $100 million. The new owners pledge $150 million. The City and County would also contribute. Peter Feigin, the Bucks president says it’s a win for Milwaukee and a win for the state.

Peter Feigin:

This is the first example of the vision of our owner group. Not only do we want to create a championship-caliber team on the court and off the court, but we want to invest in the future of this state and this city.

Frederica Freyberg:

We turn now to a supporter of the new arena, the president of the Metropolitan Milwaukee Association of Commerce. Tim Sheehy joins us from Milwaukee. Thanks a lot for doing so.

Tim Sheehy:

You’re welcome.

Frederica Freyberg:

Well, so I understand that without a new arena, the Bucks say that they will leave Wisconsin. In your mind, how big of a deal would that be?

Tim Sheehy:

It would be a big deal because it gives Milwaukee and the state a global presence. There’s only 30 markets in the world that have an NBA team. But more importantly it’s an catalytic anchor to almost a billion dollars of planned new development in downtown Milwaukee. And that means not only jobs, but tax revenue for the entire state.

Frederica Freyberg:

How tantalizing is that new billion dollar project that was released this week with the new arena and the development around it?

Tim Sheehy:

Well, as J.J. Watt likes to say, “Dream big, work hard.” And it’s a big dream, but I think there is the reality here that we’ve got to come together on a financing plan. We’ve got to work hard to make this a reality. But it could be a signature project that really shows the world what Milwaukee is going to look like for the next 50 years.

Frederica Freyberg:

How far is the project, in your understanding, from kind of putting all those financing pieces together?

Tim Sheehy:

Well, I think we’re close. We’re not there yet, but we’re close. And, you know, the train is going to leave the station, so to speak, once Joint Finance finishes its work in may. So we’re close. We’ve got a couple weeks to come together. I’m confident that the Governor and the state legislative leadership, along with the Mayor and the County Executive, are going to pull this together. But we’ve got some hard work to do over the next couple weeks here.

Frederica Freyberg:

What about the owners? In your mind, are they kind of “ponying up” enough for this?

Tim Sheehy:

Well, I think that’s a really good question. I mean, the owners right now have put $250 million on the table, along with the interest in investing in some of the commercial development around the arena. If this comes out close to a 50/50 partnership, it will be much better, in terms of the public financing, than most of the other arena projects done around the country.

Frederica Freyberg:

No, that $250 of which you speak, that’s not for the arena itself, but for the development around it?

Tim Sheehy:

No. Look at it two ways: The arena is a $500 million project and the ownership is putting $250 million towards the arena. There’s another $500 million in projected or planned development around the arena, and they’ve also evidenced an interest in investing in those projects.

Frederica Freyberg:

So what about the criticisms that are kind of being heard and concerns that state taxpayers will be on the hook for up to as much as $450 million in principal and interest in the public financing piece of the arena plan?

Tim Sheehy:

Well, there certainly is. Just like when you purchase a house, you pay for the price that you buy and then the interest payments over 30 years. And this is a similar kind of relationship. But unlike the home analogy here, the team, through the taxes that it pays from its payroll, will be contributing anywhere from $400 to $500 million over the next 20 years and that revenue will leave the state if we don’t have a new arena for the team to play in. So the way I’d look at this is it’s a way for the state to secure existing revenue that it has now.

Frederica Freyberg:

If statewide taxpayers are being called on to help finance the Bucks Arena, what do they get back for that investment, say in Wausau or Superior?

Tim Sheehy:

Sure. What they get right now is they’re collecting $10 million a year in state income tax revenue. So that’s $250 million at current level over the next 20 years. And that payroll is going to go up. So that number is going to increase to $400 to $500 million. So what taxpayers are getting right now around the state is the contribution from the income taxes that the players are paying right now to the state, and that’s an important part of this picture.

Frederica Freyberg:

All right. Well, Tim Sheehy, thank you so much for joining us.

Tim Sheehy:

You’re welcome. Thanks for having me.