Monday, June 16, 2014

A Bucks Arena Op-Ed to the Journal-Sentinel

Ed. Note: I submitted the following opinion piece to the Milwaukee Journal-Sentinel today. 

Milwaukee is in jeopardy of losing the Bucks.  The short-term move threat is because of the BMO Harris Bradley Center.  It lacks the size, shape and amenities of a modern NBA arena.  The long-term threat is because of Milwaukee's economic status.  The city and region are home to too few high-paying jobs.

Proposals for a new Bucks arena have centered around tax increases.  Everything from a new tax-increment financing district to an extension of the Miller Park sales tax has been proposed.  If passed, these solutions may well get the Bucks a modern NBA arena.  New taxes may also, however, only exacerbate the "brain drain" problem where so many educated natives leave the state.

I am an example of the brain drain problem.  I grew up in Milwaukee and graduated from West Allis Central high school.  After graduating from the University of Southern California (USC) in 1999, staying in the Los Angeles area was the obvious choice.  The opportunities for high-paying jobs were far more abundant.  As my career has progressed I have looked into relocating myself and my business to Milwaukee at various times, but it makes little economic sense.  Property, sales and income taxes are all high, and the potential base of businesses that might use my services is relatively small.

The city seems to be stuck between a rock and a hard place.  Losing the Bucks would likely decrease the attractiveness of the city to young, educated professionals.  Increasing taxes to keep the Bucks would make the city less economically attractive.  So, what to do?

The good news for proponents of the Bucks and the city is that Milwaukee already has a potential arena funding mechanism in place.  A tourist tax on hotels, rental cars and food & beverage sales at restaurants -- similar to ones used to build the Sprint Center in Kansas City and the Amway Center in Orlando -- already exists.  Tourist taxes in Milwaukee generated $27 million in 2013; far more than the estimated annual debt service on the public share of a new Bucks arena.  The problem is that these taxes are being used to keep the Wisconsin Center District -- owner of the Wisconsin Center, Milwaukee Theatre and former MECCA Arena -- afloat.  

Redirecting the tax revenues being spent by the Wisconsin Center District towards a new Bucks arena would likely be a win-win for the city.  Taxes could be kept at current levels, the Bucks could enter into a long-term lease with the city and the property that Wisconsin Center District facilities currently sit on could be sold or repurposed for uses that better serve a revitalization of downtown.  I believe that an honest survey of young, educated professionals with Milwaukee ties would find that alternative more attractive than either losing the Bucks or seeing taxes increased even more.

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