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Milwaukee Journal Sentinel (Wisconsin)

Two key players in the possible development of a new, multipurpose arena say they believe the amount of private-sector support will be significant, with one estimating it could reach as high as $300 million.

Ted Kellner, one of six minority investors in the Milwaukee Bucks under co-owners Marc Lasry and Wes Edens, said in an interview that he believes there is potential for raising as much as $300 million. The $300 million includes the $100 million pledged by former owner Herb Kohl and the $100 million Lasry and Edens have put on the table.

"Collectively, there will be $250million to $300 million of support, especially when you add in naming rights and suites," Kellner said.

Timothy Sheehy, president of the Metropolitan Milwaukee Association of Commerce, said he believed raising at least $250 million was achievable. He has formed a committee of business leaders working on an arena plan.

Many expect that Edens, who has a strong real estate and development background, will be able to entice additional investors in what some see as a potentially transformational project for Milwaukee and its downtown.

There has been no specific estimate what a new arena would cost, but many knowledgeable observers believe it will be between $400 and $500 million.

Asked what a new arena could produce in the way of additional development, Kellner said new hotels, health facilities, commercial, high-end residential and, perhaps, a new corporate headquarters.

Sheehy said that of the 13 arenas that have opened around the country since 1999, the average amount of public funding was 69%. In contrast, Denver's arena was built with only 3% public financing.

"I don't think we will beat that. But I think the point is that with strong private-sector support, Milwaukee's need for public financing will be significantly less than the average. How much less is still a question based on the estimated cost, for which we don't have a figure yet," Sheehy said.

A spokesman for Lasry and Edens declined to comment.

The process of determining where an arena might be built, how much it would cost, the level of private-public financing and what kind of additional development a new arena could produce is still in its early stages. Last week, Edens had meetings with Mayor Tom Barrett, Common Council President Michael Murphy and County Executive Chris Abele.

Abele said he was impressed with Edens.

"I wouldn't bet against them," Abele said of Edens and Lasry.

The vast majority of new stadiums and arenas nationwide have some form of public support. In the Milwaukee area, suburban opposition to any kind of regional tax to finance a new arena or expansion of the Wisconsin Center is well entrenched. The county boards in Ozaukee, Waukesha and Racine have already passed resolutions opposing a regional tax.

At the same time, Common Ground, a community organization, is pushing its Fair Play campaign. The group says that if public funds are used for a new arena, $150 million should be set aside to improve Milwaukee County public schools' athletic facilities and recreational spaces.

A new arena and additional development can have a meaningful impact on the city, said Kellner, who runs Fiduciary Management, and Craig Karmazin, who owns Good Karma Brands, a sports marketing, events planning, retail and radio broadcast firm.

"I think this will be about development, it will be about jobs, being a first-class city, being one of 230 prime franchises in the world, right here in Milwaukee," Kellner said.

"It builds the property tax base, it provides jobs and it adds an element to the city," he said.

Asked where an arena could be built, Kellner replied, "In an area that will give us the greatest flexibility and opportunity for development surrounding the facility."

Karmazin said the project is about more than building an arena.

"I do see this as what Milwaukee is going to look like 20 years from now," Karmazin said. "I see this as a real critical point in our growth as a community and as a defining project in a lot of ways."

Karmazin said he has been impressed with the new owners' approach to the process of getting an arena built.

"I think the thing about their vision is they didn't come in with all the answers," Karmazin said. "They came in with the right experience, the right resources and the right processes to be able to make the decisions that are going to be right."

In contrast, Karmazin said, he would have been concerned if Lasry and Edens left the impression they were moving ahead without collaboration "and we know how to do it better than anybody else."

"They have such a collaborative, open-door way of communicating with us and to this point with the community. I just see them doing things the right way," Karmazin said.

Besides Kellner and Karmazin, the other named local investors are Jim Kacmarcik, president of Kapco Inc., a group of companies that includes Kapco Metal Stamping, Advanced Coatings, K-Nation Entertainment and the Lakeshore Chinooks; Mike Kocourek, a portfolio investor who is president of Mid Oaks Investments in Buffalo Grove, Ill.; Keith Mardak, chairman and CEO of Hal Leonard Corp.; and Teddy Werner, vice president of business development for the Milwaukee Brewers.

 

August 10, 2014

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