Menominee money for Milwaukee? Walker says no.

As if the ongoing efforts to build a new arena in downtown Milwaukee weren’t confusing or divisive already, another log was thrown on the fire Tuesday morning when the Menominee Indian Tribe announced that it would contribute $220 million to the project if Gov. Scott Walker were to reverse his earlier decision rejecting the Tribe’s application to build an off-reservation casino just outside of Kenosha.

As far as public funds going to an arena go, not everybody is keen to the idea pitched by Gov. Walker, who proposed the state issue up to $220 million in bonding which would be repaid by a so-called “jock tax” on the salaries of Bucks employees and players, as well as visiting players and employees.

Walker’s budget, and the jock tax provision, will be debated at length by state lawmakers, who have final say on the budget but ultimately, it’s Walker who has final say on the casino application and while he’s already made his decision — a decision which a spokesperson said Tuesday he is not going to overturn — he has until Feb. 19 to change his mind.

The Bucks, meanwhile, seem to be taking the high road.

Team president Peter Feigin took questions on the topic Tuesday at a press conference meant to introduce a new naming rights sponsor for the Bucks’ practice facility.

Feigin dismissed reports that team and Menomonee officials were involved in a conference call to discuss the proposal and said he would at least listen to what they had to say, but it seemed apparent that the Bucks were planning to stick to the existing plan.

“We stand by how excited we are about the Governor’s leadership — and building his legislation toward what he started about a week ago,” Feigin said. “We’re in the midst of working with local, municipal, county and state authorities to build a private-public partnership.

“We’re really not going off track — we’re centered on following the Governor’s lead.”

So, where does this leave the arena project? It’s hard to say for sure.

This is what we know so far: assuming the final price tag is around $500 million, as many have suggested, the Bucks are halfway to that goal.

When Sen. Herb Kohl announced he was selling the team to Wes Edens and Marc Lasry, he personally committed $100 million toward the construction of a new facility, as did the new owners, for a total of $200 million. Since then, with the addition of additional investors, the amount of private funds pledged toward the project is believed to be approximately $250 million.

That still leaves another $250 million or so to cover. Enter the state of Wisconsin and the jock tax which is no sure thing, either; plenty of lawmakers on both sides of the aisle have expressed concerns about the proposal. But let’s assume for a second that it passes, and at the full amount Walker proposed. That leaves another $30 million or so to cover before shovels hit the ground.

Where does the rest come from?

The Bucks have added a significant number of minority owners, so that group could still kick in some additional funds. And at some point, the City of Milwaukee and Milwaukee County will get involved. It’s just unknown when or how those two entities will participate.

As has often been the case in this process, Milwaukee Mayor Tom Barrett been largely silent on the matter. He was obviously a little busy Tuesday, with the Common Council approving his Milwaukee Streetcar proposal. Just last week, though, the Mayor appeared on the Bill Michaels Show and said the city would “have some skin in the game” but didn’t elaborate to what extent.

Milwaukee County Executive Chris Abele has also suggested the County will be involved in the process but he, too, has declined to offer specifics. Monday, after meeting with the Bucks, Abele seemed to suggest that the new facility would be built on County-owned land in the Park East Corridor but again, it’s all just speculation.

(An interesting side note: Abele is a court side season ticket holder to Bucks games and a man of considerable wealth … perhaps he will latch on as a private contributor).

There are many, many other factors at play here — at some point, expect the Milwaukee Admirals and Marquette University to get involved in the process too — and there’s a lot of work to be done before Feigin, Edens and Lasry turn over the first ceremonial shovels of dirt.

But with more and more frequency, the conversation around the arena seems more about when and how rather than if.

Editor’s Note: This story has been updated to reflect a potentially misleading statement regarding the Menominee Tribe. It was my fault. – Jeremy

Categories: Arena Debates

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3 Comments

  1. An interesting caveat for sure; however, the main problem remains the same. A former governor (Doyle) signed a deal saying if the Potawatomi tribe lost money (aka didn’t make as much) due to a different tribe’s casino being built within 50 miles of theirs, the taxpayers will reimburse the Potawatomi any and all losses. This could be tens of millions, if not hundreds of millions, of dollars a year; for example, the Potawatomi casino made $363 million in revenue during 2013, so if the Kenosha casino took just one third of that revenue away ($121 million) the Potawatomi would have to be reimbursed by the state (read: taxpayers) for that amount for that year. Also, the Potawatomi would stop paying their gaming fees (~25 million a year) to the state and would ask for their previous gaming fees that they gave to the state to be returned too. This is a terrible contract that was signed between the state of Wisconsin (thanks to Doyle) and the Potawatomi tribe. So even though the Menominee would be willing to pay 200 million up front, over a certain time frame, the state will lose money and will continue losing money from there on out.

    A side note: The Bureau of Indian affairs has recently ruled that the state would not be liable for future payments of losses. According to them the only thing in question is the money Potowatomi paid for the Doyle compact, which was mainly 100 million. Even then they believed the State would have a strong case if Potowatomi sued for this money; however, Potawatomi would likely contest and sue the Bureau of Indian affairs for their judgement as well as the State. If the Bureau of Indian affairs and the State were to lose in court (and the legal battle would also come with its own high costs), it’ll mean a monumental loss of state revenue in the present time and going forward. Overall, I assume Governor Walker just didn’t care to take the fiscal risk to the State’s budget.

  2. I need to correct one LARGE factual error in your story. The Menominee Indian Tribe of Wisconsin (note how “of Wisconsin” is part of their name) is NOT “uninvited guests to Walker’s home state.”

    The Menominee Indian Tribe of Wisconsin has been in what is now called Wisconsin for over 10,000 years.

    The other commenter on here is painting the very complex compacts with broad brush strokes.

    The Potawatomi compact does not call for the taxpayers to reimburse the Tribe. The compact calls for a new casino to do that. In fact, when the 2005 compact was being negotiated, the Kenosha casino had been in the planning and submittal stages for at least 6 years. The Potawatomi compact actually took that into consideration and specifically addresses the possibility of a casino within 30 and 50 miles of their casino.

    What you hear from our governor are talking points from the Potawatomi who have sunk millions and millions into fighting the Kenosha casino. If it was such a slam-dunk, can’t do it, why would the Kenosha casino have been in the works for more than 15 years?

    And, commenter L, do you seriously think that Hard Rock International doesn’t have the cash to back up their proposal?

    Get real.

    • I’m pretty sure we both do not have a 100% clear understanding of the amended compact and a big reason for that is that its legally being debated in regards to how it should be perceived and implemented. Also, the most recent proposal put forth by Hard Rock Casino project group did not promise that they would pay for all the lost income the State of Wisconsin could potentially incur; the Menominee Tribe’s original proposal to have the Casino built did hint that they would pay for any lost income to the State, but they have since re-tracked from that.

      The deal that the Bureau of Indian Affairs (BIA) rejected was indeed the Doyle amendment of the State’s gaming compact. That amendment called for the State of Wisconsin to ensure that the Potawatomi were reimbursed for any financial losses tied to any new casinos built within a specific range of theirs. One legal perspective of that amendment was that the State of Wisconsin was financially responsible; meaning, the taxpayers would be on the hook for any loses incurred. The other legal perspective, which is the one that the BIA has taken with regards to the amendment that they rejected, is that the State of Wisconsin would essentially be a collection agency for mitigating payments between the offending Casino’s owners to the Potawatomi tribe.

      The Potawatomi remain confident that the rejected amendment will be re-instated by the courts; they have filed a lawsuit within the federal courts looking to have the amendment become legally binding once again. With the deadline for Scott Walker to make a decision being February 19th it would be imprudent of him to give an approving decision to the Hard Rock Casino when it is unknown how the federal courts will rule in regards to the BIA’s rejection of the amendment as well as the clarification of the amendment itself; especially, if the wasn’t a rock solid proposal by the Menominee that would absolve the State of Wisconsin from any potential costs whether that be by fee, penalty, or revenue.

      If the BIA rejection is found to be unlawful and further more if the amendment is clarified to place the responsibility onto the State itself then the risk of massive costs to the State of Wisconsin could be in the hundreds of millions of dollars and over multiple years. Not to mention, the Potawatomi would likely sue the State of Wisconsin which would also bring additional costs. Anyways, while I am a supporter of building the new Casino based solely on wishing to see the jobs added to the State as well as the potential economic boom for that particular area I don’t pretend to fully understand ever tiny detail of the discussions that are being had nor the potential ramifications that could afflict the state; therefore, I leave the matter up to the State leaders who have proven to me thus far, or at least in my opinion they have proven, to have the taxpayers’ best interests in mind so if they don’t think its a wise decision to allow the Casino to be built out of concern for the State’s future revenue than so be it.