Study says Stadium District may run out of money- Will Brewers ask for more taxpayer funding?

[nate82]

Cities really shouldn't be managing sports arenas when they have a horrible track record at keeping roads maintained properly.

[Jopal78]

But you’re still incorrect. I don’t think there has been any suggestion the Brewers can force the Stadium District to spend money they don’t have, and would not make sense anyways since the Stadium District can’t simply restart taxing the 5 counties because they want to.

 

I’d suggest reading up on the actual terms of the lease before calling something incorrect, because the Brewers actually can force them to spend money because of the state of the art clause.

 

Again, ignorance is bliss I suppose. The State of Wisconsin passed a law that eliminated the 5 county sales tax. Since that time, the Stadium District has no way to generate revenue. If the Brewers are adamant they need certain improvements to the stadium that the district cannot afford, Attanasio will most likely take his team somewhere else when the lease expires in 2030.

 

As to your comment about a “State of the Art” clause. That can literally mean anything or nothing depending on the metrics used to define it. I do know both sides would have a bevy of lawyers to fight over what it means. Even if it came to that the Brewers are most likely gone anyways because it necessarily would mean the Stadium District already told them to pound sand, and on top of that would still need a bill passed by the legislature and signed by the governor to generate any money besides what they have in their pocket now.

 

They can ask the Stadium District for whatever they want, absent litigation they can’t compel the District to do anything, and if there’s litigation the team probably attempts to relocate anyways. It’s testing the waters to ask for more public financing, plain and simple.

[MrTPlush]

1) The Brewers aren’t getting a new stadium any time even remotely soon.

 

2) They won’t leave

 

Will they demand a new stadium or threaten to leave as a negotiating tactic? Yah, definitely so…that’s just how it works. I don’t think they really care for a new stadium. They know Miller Park is still modern and has been updated impressively well.

 

I’m not going to predict where the money comes from, but the reality is the Brewers do generate millions and millions in tax revenue for the city/state/surrounding area. So if they can lock the Brewers into another long lease throwing some cash every year for an improvement fund really shouldn’t be a major obstacle in the end.

[TURBO]

the Brewers haven't and won't ask the taxpayers for anything.

 

 

How can you possibly know this?

[PeaveyFury]

the Brewers haven't and won't ask the taxpayers for anything.

 

 

How can you possibly know this?

 

Because in this particular case, it’s not the Brewers that need to do the asking.

[owbc]

The Brewers will absolutely ask for taxpayer contributions to stadium improvements when the lease is up. The Mariners were just in a similar situation. They asked for $180 million in exchange for a 25-year lease and they got $135 million approved.

 

The difference is that the source of the taxpayer money will be different than the 5-county sales tax. I’m not sure how that will work. The Brewers also own about a third of the stadium which I didn’t realize until recently. It would be interesting to know what is likely to happen based on how the contract is written.

 

I disagree about the relocation threats. There won’t be any.

[DHonks]

I'm right there with you. I'd rather the Brewers leave than to spend one more penny of taxpayer money. Let some other city empty their coffers for a team with an estimated value of over a billion dollars and an owner with an estimated net worth of $700 million.

 

You should ask fans in Cleveland, Montreal, Seattle, Oakland, San Diego, Houston, etc how it feels to be without a major professional sports team. Besides the Packers, they are our #1 most popular pro sports team. Yes, the Bucks have had a nice run in recent years...but even about 6 years ago if you asked people their favorite basketball team most would have stated the Badgers or Marquette. The Bucks had limited appeal and many were indifferent to them leaving. The Brewers have had a very nice run of sustained success in the last 15 years and they have an outstanding owner that has stated he wants the franchise in Milwaukee left to his kids to run. Losing them would have a huge impact on the city, the region, and the state. It would be an economic and psychological disaster for the area. The $200-300 you spent in taxes for Miller Park in the last 25 years is amazingly cheap.

 

The priority needs to be to keep AmFam Field a state of the art facility that works for the city, the state, and the ball club. It's a wonderful place to watch a game.

[Invader3K]

We should be at least about 20 more years away from any serious discussion of a new stadium. AmFam is a palace. Keep improving it, but there is no need for any chatter about replacing it in the near future.

[JosephC]

I'm right there with you. I'd rather the Brewers leave than to spend one more penny of taxpayer money. Let some other city empty their coffers for a team with an estimated value of over a billion dollars and an owner with an estimated net worth of $700 million.

 

You should ask fans in Cleveland, Montreal, Seattle, Oakland, San Diego, Houston, etc how it feels to be without a major professional sports team. Besides the Packers, they are our #1 most popular pro sports team. Yes, the Bucks have had a nice run in recent years...but even about 6 years ago if you asked people their favorite basketball team most would have stated the Badgers or Marquette. The Bucks had limited appeal and many were indifferent to them leaving. The Brewers have had a very nice run of sustained success in the last 15 years and they have an outstanding owner that has stated he wants the franchise in Milwaukee left to his kids to run. Losing them would have a huge impact on the city, the region, and the state. It would be an economic and psychological disaster for the area. The $200-300 you spent in taxes for Miller Park in the last 25 years is amazingly cheap.

 

The priority needs to be to keep AmFam Field a state of the art facility that works for the city, the state, and the ball club. It's a wonderful place to watch a game.

 

Maybe fans, but what about the rest of the general public that doesn't give a hoot about watching other people play sports?

 

I very much doubt that the majority of people in San Diego are crying because they lost the Chargers, considering they had a referendum regarding stadium funding and the measure was crushed with only 42% of the people voting yes.

 

As far as Seattle. I remember all the hand-wringing that was going on with the Bucks potentially moving to Seattle and the economic devastation that would follow. I couldn't help but think that the city of Seattle didn't fall into the Pacific after the SuperSonics left town. It seems that Seattle has done just fine without them.

 

I oppose any public money going to these major sports leagues for the simple reason that they are now taking in billions every year and they don't need the public's help. It's as simple as that. At the very minimum, there should be public referendums on these issues so that the people have a say in the matter.

[StearnsFTW]

So weird to me that someone would be a big enough Brewer fan to post here, but would rather see them leave than pay a tiny amount of tax to keep them. I can see why non-Brewer fans feel that way, but not the people here who are obviously die-hards.

 

To each their own, just strikes me as strange.

 

You're getting screwed on taxes either way, might as well get something out of it. I know that's an extremely cynical point of view, but the older you get, the more obviously true it is.

[PeaveyFury]

I guess I'd be interested in seeing updated projections on dollars spent vs. revenue gained on those scenarios, as if $1 of taxpayer money spent equals $1.25 of resulting tax revenue, that's a net positive for taxpayers regardless of whether you're a sports fan or not.

 

But, I do think the needle has moved on 'new stadium' construction because of the mammoth projects most of those have become. Whether taxpayer dollars for maintenance & team retention related to an existing facility is a net positive, however, is something that would be interesting to know.

[SomewhereInTime]

If our elected officials hand Attanasio more money, they are even more stupid than I think they are, which is saying a lot. How much revenue does MLB take in annually? Not one more penny from Wisconsin taxpayers. Not a single one.

 

 

I'm right there with you. I'd rather the Brewers leave than to spend one more penny of taxpayer money. Let some other city empty their coffers for a team with an estimated value of over a billion dollars and an owner with an estimated net worth of $700 million.

 

Then enjoy travelling to Chicago or Minneapolis next time you want to watch a major league baseball game.

[owbc]

I guess I'd be interested in seeing updated projections on dollars spent vs. revenue gained on those scenarios, as if $1 of taxpayer money spent equals $1.25 of resulting tax revenue, that's a net positive for taxpayers regardless of whether you're a sports fan or not.

 

But, I do think the needle has moved on 'new stadium' construction because of the mammoth projects most of those have become. Whether taxpayer dollars for maintenance & team retention related to an existing facility is a net positive, however, is something that would be interesting to know.

 

The needle has certainly moved since 10 or 20 years ago -- but it depends on the city and the specifics of the situation.

 

The Brewers' situation is on the simpler side of things and the recent Seattle Mariners negotiations are the most relevant comparison. Similar to the Mariners, there is no way the Brewers are going to relocate or get a new stadium. The Mariners never threatened either. What the Mariners did say is that they would not sign a long-term lease extension without a commitment from their landlord (King County) to pay for improvements to the facility over the 25-year term of the lease extension. The Mariners "threatened" to only sign a short-term lease if they didn't get public funding for the stadium. Which was a real possibility since the vote ended up being 5-4 in favor of $135 million in improvements over 25 years. The initial ask was $180 million. Had that vote gone the other way, the negotiations would have continued until something was agreed to...probably less than $135 million but certainly greater than zero.

 

I would say $135 million is a fairly small number over the course of 25 years, but it serves as a useful baseline for what the Brewers might ask for. And as 1/3 owners of AmFam Field, the Brewers will probably offer a 1/3 match to any public funds.

 

What matters here is that it's in the public interest to keep AmFam modern. Say what you want about the downsides "state-of-the-art" clause, but it's existence is the reason why AmFam is currently in great condition and why the Brewers have no leverage to threaten to build a new stadium or for relocation. This isn't Tampa Bay or Oakland. The Brewers will ask for public funds in exchange for a 25-year lease and it's a fair ask given that the public ownership of the stadium was locked in 25 years ago.

 

There's also no option to do anything other than come to an agreement. There are no relocation options that wouldn't incur the same or greater challenges in terms of securing public financing for a stadium, not to mention the impossible challenge of building a fanbase that would even come close to matching what Wisconsin can offer. That wasn't the case in the 1990s, but it is now, and neither party to the lease extension can escape that.

[MrTPlush]

I mean at the end of the day there really is no reason the state/city would not come forward and help update AmFam. Between player salaries and other higher end personnel you have millions a year they bring in. Heck even ticket sales, concessions, etc....At worst you would throw the Brewers that bone back just to keep them around just to have them around.

 

The problem is, so much of the funding comes via city/county...when the state is the one collecting so much of the tax revenue being generated.

 

It doesn't make sense to have the logic of "I don't want to give them a single penny". Why? If they give $2.5mil to makes $7mil a year of tax revenue...why would you not do that?

[owbc]

I mean at the end of the day there really is no reason the state/city would not come forward and help update AmFam. Between player salaries and other higher end personnel you have millions a year they bring in. Heck even ticket sales, concessions, etc....At worst you would throw the Brewers that bone back just to keep them around just to have them around.

 

The problem is, so much of the funding comes via city/county...when the state is the one collecting so much of the tax revenue being generated.

 

It doesn't make sense to have the logic of "I don't want to give them a single penny". Why? If they give $2.5mil to makes $7mil a year of tax revenue...why would you not do that?

 

Exactly. If the stadium wasn't already there or was a piece of junk it would be a different story. But it is there and the public owns it. So the taxpayers are obligated to keep it functional. And the ROI for a lease extension makes it an easy sell.

 

The real question is why the public owns a very expensive asset that has one billionaire tenant and no useful purpose if that tenant leaves. That also was an issue in Seattle when the prospective new NHL owners were looking for a place to play. The city basically blocked them from building a new arena and forced them to renovate the old home of the Supersonics which was an outdated money pit. Plus they transferred majority ownership of the renovated arena to the new owners so they don't have to deal with it anymore. The renovation project ran way over budget and the ownership group had to eat all of cost overruns (which they did, but have been grumbling about it).

[JosephC]

So weird to me that someone would be a big enough Brewer fan to post here, but would rather see them leave than pay a tiny amount of tax to keep them. I can see why non-Brewer fans feel that way, but not the people here who are obviously die-hards.

 

To each their own, just strikes me as strange.

 

You're getting screwed on taxes either way, might as well get something out of it. I know that's an extremely cynical point of view, but the older you get, the more obviously true it is.

 

Technically speaking, I'm not sure the last time I gave Attanasio any free money since I don't live in the five-county area. I used to visit Milwaukee fairly often, but probably haven't been there in the last five years or so.

 

I do feel sorry for the old folks living on fixed incomes in Racine who have no interest in the Brewers but yet have to pay the tax. I'm sure most of them get free stuff from the county to make up for that though, LOL.

[JosephC]

I guess I'd be interested in seeing updated projections on dollars spent vs. revenue gained on those scenarios, as if $1 of taxpayer money spent equals $1.25 of resulting tax revenue, that's a net positive for taxpayers regardless of whether you're a sports fan or not.

 

 

Due to dwindling office space, there is a good chance I will be a remote worker in the next 12-18 months. If that occurs, I may relocate to Arizona.

 

Maybe I'll go up to Peter Barca and say, "Last year I paid $8000 in state taxes. I'm thinking about moving to Arizona. But how about this, I'll stay in Wisconsin if you give me $6400 now and I'll pay the $8000 in taxes at the end of the year. If I leave you get nothing, if I stay you get $1.25 of revenue for every dollar you gave me at the beginning of the year. That's a win for the average taxpayer."

[MrTPlush]

The difference is you have zero negotiating power. You are $1,600 by yourself. A pro franchise is worth millions in tax revenue and other various economic impacts.

 

Big companies have such power to get the tax cuts they do because if supply/demand. Now, I do think government entities are starting to learn emotions have been put into these types of deals too much in the past…thus making it look really questionable how much they have give. Teams have easily taken the other side to the cleaners getting way more than they probably should. But thus, there is that pride to have the team.

 

I think things are starting to swing and be more reasonable. Where the teams will get some incentive, but the city/state will still get benefits on their end too. At least more obvious than it is now. AmFam is well set up to last many more decades…if they proactively keep it up to date. If you let it get run down then, yah, suddenly there will be a need for massive renovations or even a new building.

[xisxisxis]

A pro franchise is worth millions in tax revenue and other various economic impacts.

Over $600 million in taxes have been collected for the Miller Park/AMFam construction and maintenance for a 30 year lease. That's $20M per year.

 

The tax revenue to equal that amount (or $20M) to make a net zero in cost to the taxpayers (assuming the current 7.6% top rate) is $263M in payroll. Maybe I missed a few FA signings, but the Brewers aren't even close.

 

What are the actual numbers? The Players (the largest part of the teams payroll) count half of their payroll as WI taxable due to playing half their games in another state. If we say the teams player payroll has averaged $70M the past 21 years with another $15M in other payroll (at 100% WI taxable) that's an average of $50M ($70M/2 + $15) with a income tax revenue for the state of $3.8M. The team probably contributes more from paying sales tax. Let's say the average taxable revenue over the last 22 years has been $120M which equates to about $6.6M per year. That's about $10M in tax revenue for $20M in tax subsidies. Who wants to sell their house for 50% of the market price? Anyone want to sell me their $20 bills? I'm offering $10. But the state/counties should be losing 50% of their investment?

 

Economic Impact? It could matter if the tax revenue was close to or equal the tax subsidy. I won't go into all of the studies that show the impact as minor. It just doesn't move the needle. People will spend the money on other entertainment options. Spending $600 million to raise the education standards of WI youth, retraining programs for people who lose jobs, subsidies to high tech industries/jobs would create way more high paying jobs than a few baseball positions in their offices that surprisingly go to out-of-staters. It's not that $200-$300 out of the average persons pocket that's the issue, it's how you spend $600M in tax revenue and paying for a new stadium is pretty much a poor use of that money.

 

If the city/county wants to renegotiate a lease extension they should stipulate that the money to cover the Brewers subsidy will come from a ticket tax. Say $5 per ticket for 2.5M tickets gets you to $12.5M per year. That should cover the operating expenses and let's the people who go to the games pay for the pleasure.

[PeaveyFury]

Technically, the lease is likely to end up being a 40 year lease, which would modify the annual expense to $15 million. And I know you’re jut making a best effort rough calculation, but historical looking average numbers are going to be less by due to the general increase in both the interest in the team vs. the mess of day 2002 and the overall increase in team spending since the ownership change. IE, payroll is far more likely to be closer to $90-$100 million+ than it would be to $70 million, IMO.

 

But I do agree completely on a focused ticket-tax type item….

[BrewFan130]

I’d hate to see the Brewers go anywhere else, but there are some definite issues with the relationship between the team, Wisconsin Professional Baseball Park District and tax payers in regards to the stadium. First off I don’t understand why the team receives all revenue from stadium naming rights. They own 29% of the team with the WPBPD owning 71% and receiving nothing. The other issue is transparency, the WPBPD meeting minutes are of public record yet it’s been stated that the notes are always short with limited detail. I don’t live in the area, but I’d be curious to know if their meetings are open to the public since the WPBPD is tax payer funded

[MrTPlush]

A pro franchise is worth millions in tax revenue and other various economic impacts.

Over $600 million in taxes have been collected for the Miller Park/AMFam construction and maintenance for a 30 year lease. That's $20M per year.

 

The tax revenue to equal that amount (or $20M) to make a net zero in cost to the taxpayers (assuming the current 7.6% top rate) is $263M in payroll. Maybe I missed a few FA signings, but the Brewers aren't even close.

 

You are referring to the past agreement. Really, that is entirely meaningless when it comes to the next lease/agreement. Unless you think they are going to demand a new stadium or leave.

 

Reality is they likely can come to an agreement to keep Miller Park modern/up to date for a fraction of building a new stadium. Thus, it makes sense for both sides. I am going to guess I die before the Brewers leave or get a new stadium....and I am far from dying...hopefully.

[xisxisxis]

You are referring to the past agreement. Really, that is entirely meaningless when it comes to the next lease/agreement.

I don't think it's entirely meaningless. The Brewers don't have open books and can proclaim anything they want when looking for new lease terms. The county has data that the last series of negotiations did not net the benefit that the prior Brewers ownership claimed. The city/county should be clear with the Brewers that without transparency they won't take the Brewers claims at face value. As I stated in my previous post I think the reasonable approach to recover the counties costs for that extension is to institute a ticket tax. The Brewers will absolutely hate that idea as it makes the ticket prices higher. But that's a reasonable approach to subsidizing the costs for the county instead of another "tax" that is inequitable and as the past agreement clearly shows, the taxpayers lose and lose and lose. I have personally flipped on the issue myself going from JosephC's position of not one more dime, to being fine with a lease extension that keeps MP/AmFam up to date, but coming from those that utilize that facility and not the average taxpayer who derives no benefit from the Brewers.

 

Technically, the lease is likely to end up being a 40 year lease, which would modify the annual expense to $15 million. And I know you’re jut making a best effort rough calculation, but historical looking average numbers are going to be less by due to the general increase in both the interest in the team vs. the mess of day 2002 and the overall increase in team spending since the ownership change. IE, payroll is far more likely to be closer to $90-$100 million+ than it would be to $70 million, IMO.

Yes, but it still is an uphill battle to get to tax expense/revenue equity. By 2030+ it will be closer to break even on a yearly basis (dividing the capital cost across the lease years), but we can't ignore the >$200M+ deficit that's accumulated. If an extension comes in at a $ amount that actually drives an excess benefit to the taxpayer then that takes significant sting out of the current deficit, but I doubt we ever get back to parity. I just hope the next extension is fair to the taxpayers and if it means that Mark Attanasio is only taking home $10M a year instead of $20M then I'm fine with that.

[DHonks]

One of the newest types of supports for stadiums is creating a special tax district. Basically take the income tax collected on the ball players, musicians, etc that use Miller park, and instead of kicking it to the General Fund, earmark it for stadium updates and a future ballpark in 30 years. This is basically what was done with Fiserv Forum, right?

[MrTPlush]

One of the newest types of supports for stadiums is creating a special tax district. Basically take the income tax collected on the ball players, musicians, etc that use Miller park, and instead of kicking it to the General Fund, earmark it for stadium updates and a future ballpark in 30 years. This is basically what was done with Fiserv Forum, right?

 

Yah, that is a big chunk of how it got paid for, was taking into consideration all the tax collection from it. They then added a surcharge to ticket sales to reduce the amount they are paying in the long run.

 

If all they are trying to do is save for renovation over time it is honestly a really easy way to pay for it. Of course the politics around that gets complicated because usually it involves cutting budget from something, helping pay for the stadium, and then all that tax revenue from having the pro team suddenly starts going somewhere else whoever in office wants it to go. So in practice it doesn't really work out how logic should say and instead becomes overly political.

 

Of course part of the problem is the state isn't getting any additional money because the team already exists here. So they would have to cut budget to then send money to a general fund for stadium improvements. If they don't think the team has much ground to stand on to move...the state/government probably won't be running to give them money. Part of the reason it worked for the Bucks is the fact the NBA was going to move them if they didn't get a stadium. So in that case the state did have motivation to help as that lose of money was a very real risk.