State rejects Hard Rock arena offer tied to casino OK
Just hours after the Menominee tribe floated the idea of paying $220 million to cover the taxpayers' share for a new downtown Milwaukee arena in exchange for approval of its proposed Kenosha casino, Gov. Scott Walker's administration quickly shot down the offer.
No dice, said Mike Huebsch, Walker's administration secretary. He said the governor will not reverse his decision to kill the Menominee casino.
Plans called for Hard Rock International, owned by the Seminole tribe in Florida, to develop and manage the casino complex.
"We're finding out through news releases," Huebsch said in Madison. "When you get to the point that you're negotiating by news release, you realize that there isn't any validity to these offers.
"On looking at it, I don't believe these are genuine offers that they can fulfill."
At news conferences Tuesday morning in downtown Milwaukee and Madison, Menominee Chairman Gary Besaw and Jim Allen, chairman of Hard Rock, said they wanted a meeting with Walker, who is in the United Kingdom on a trade mission. Walker is expected to return Friday.
Walker has unilateral authority to approve or reject any off-reservation casino in Wisconsin.
The Menominee tribe made a similar offer during negotiations with the state in October, according to a copy of the confidential proposal. At that time, the tribe offered to pay the state 2.5% of the casino's net win for 10 years, with that money going into a trust to help pay the cost of the arena.
"That would have been less that the $220 million," said a source with knowledge of the project, explaining the October offer would have equaled about $100 million. "But the state could have asked for more if they were interested."
The $220 million offer made Tuesday could actually be larger, Besaw and Allen said. The money would be paid out over a 25-year period and could be valued at as much as $300 million.
"Our $220 million proposal eliminates a big political problem and creates a major advantage to state taxpayers," Besaw said. "We want Wisconsin to stay big league."
Besaw also said the Menominee would increase to $275 million the bond it would post to cover any potential state losses from the Potawatomi and Ho-Chunk casinos. From the Menominee point of view, the commitment includes the $220 million toward an arena, a $275 million bond to cover losses, plus the estimated $1.2 billion in Kenosha gaming proceeds the tribe has committed to the state.
Walker administration officials said they were skeptical whether the Kenosha casino would generate enough revenue to cover payments for the arena as well as the operation's promise to pay the state 7.5% of its net win.
The Menominee have also agreed to pay Hard Rock 26% of its net gaming revenue to build and manage the proposed $800 million facility.
Some of the details of the Hard Rock offer were first reported by WISN-AM (1130) talk show host Mark Belling.
Even before Huebsch spoke, those close to the project acknowledged it was unlikely Walker would change his mind.
"It's not a Hail Mary pass," said a source with ties to the project. "It's more like a half-court shot with the buzzer about to go off."
Walker has proposed using $220 million in state appropriation bonds toward the new arena.
The $220 million in bonds that Walker is proposing to issue would ultimately cost at least $380 million when accounting for interest, according to the nonpartisan Legislative Fiscal Bureau.
So far, the Walker plan has had a cool reception in the Republican-dominated Legislature, with leaders suggesting the bond amount should be trimmed to $100 million.
At the Madison news conference, Sen. Van Wanggaard (R-Racine) said if Walker rejected the latest offer on the casino, it would be difficult for him to support Walker's proposed budget that includes bonding for the Bucks. That's because Wanggaard now sees a way for the arena to be built without public funding, he said.
Bucks President Peter Feigin said Tuesday that the organization is standing behind Walker's bonding proposal.
"We've been in lock-step with state, county and city officials to build toward a very accelerated schedule to get a shovel in the ground this fall," he said.
Walker rejected the casino plan on Jan. 23, the day before he visited Iowa in a run-up to his expected presidential run. Conservatives there had urged him to reject the project.
The state's $220 million would be combined with $150 million from Bucks owners Wesley Edens, Marc Lasry and Jamie Dinan and $100 million from former Sen. Herb Kohl.
An additional $50 million would have to come from the city, county or other sources.
The team is still focusing on a site just north of the BMO Harris Bradley Center for the new arena, but also has designs on land in the Park East as well as a city-owned parking ramp at N. 4th St. and W. Highland Blvd.
The land in the Park East adjoining W. Juneau Ave., would be used for new development in the form of retail, commercial and office space.
The Bucks have not released details of the arena design or what the team has in mind in terms of new development.
Reported by: The Milwaukee Wisconsin Journal Sentinel
No dice, said Mike Huebsch, Walker's administration secretary. He said the governor will not reverse his decision to kill the Menominee casino.
Plans called for Hard Rock International, owned by the Seminole tribe in Florida, to develop and manage the casino complex.
"We're finding out through news releases," Huebsch said in Madison. "When you get to the point that you're negotiating by news release, you realize that there isn't any validity to these offers.
"On looking at it, I don't believe these are genuine offers that they can fulfill."
At news conferences Tuesday morning in downtown Milwaukee and Madison, Menominee Chairman Gary Besaw and Jim Allen, chairman of Hard Rock, said they wanted a meeting with Walker, who is in the United Kingdom on a trade mission. Walker is expected to return Friday.
Walker has unilateral authority to approve or reject any off-reservation casino in Wisconsin.
The Menominee tribe made a similar offer during negotiations with the state in October, according to a copy of the confidential proposal. At that time, the tribe offered to pay the state 2.5% of the casino's net win for 10 years, with that money going into a trust to help pay the cost of the arena.
"That would have been less that the $220 million," said a source with knowledge of the project, explaining the October offer would have equaled about $100 million. "But the state could have asked for more if they were interested."
The $220 million offer made Tuesday could actually be larger, Besaw and Allen said. The money would be paid out over a 25-year period and could be valued at as much as $300 million.
"Our $220 million proposal eliminates a big political problem and creates a major advantage to state taxpayers," Besaw said. "We want Wisconsin to stay big league."
Besaw also said the Menominee would increase to $275 million the bond it would post to cover any potential state losses from the Potawatomi and Ho-Chunk casinos. From the Menominee point of view, the commitment includes the $220 million toward an arena, a $275 million bond to cover losses, plus the estimated $1.2 billion in Kenosha gaming proceeds the tribe has committed to the state.
Walker administration officials said they were skeptical whether the Kenosha casino would generate enough revenue to cover payments for the arena as well as the operation's promise to pay the state 7.5% of its net win.
The Menominee have also agreed to pay Hard Rock 26% of its net gaming revenue to build and manage the proposed $800 million facility.
Some of the details of the Hard Rock offer were first reported by WISN-AM (1130) talk show host Mark Belling.
Even before Huebsch spoke, those close to the project acknowledged it was unlikely Walker would change his mind.
"It's not a Hail Mary pass," said a source with ties to the project. "It's more like a half-court shot with the buzzer about to go off."
Walker has proposed using $220 million in state appropriation bonds toward the new arena.
The $220 million in bonds that Walker is proposing to issue would ultimately cost at least $380 million when accounting for interest, according to the nonpartisan Legislative Fiscal Bureau.
So far, the Walker plan has had a cool reception in the Republican-dominated Legislature, with leaders suggesting the bond amount should be trimmed to $100 million.
At the Madison news conference, Sen. Van Wanggaard (R-Racine) said if Walker rejected the latest offer on the casino, it would be difficult for him to support Walker's proposed budget that includes bonding for the Bucks. That's because Wanggaard now sees a way for the arena to be built without public funding, he said.
Bucks President Peter Feigin said Tuesday that the organization is standing behind Walker's bonding proposal.
"We've been in lock-step with state, county and city officials to build toward a very accelerated schedule to get a shovel in the ground this fall," he said.
Walker rejected the casino plan on Jan. 23, the day before he visited Iowa in a run-up to his expected presidential run. Conservatives there had urged him to reject the project.
The state's $220 million would be combined with $150 million from Bucks owners Wesley Edens, Marc Lasry and Jamie Dinan and $100 million from former Sen. Herb Kohl.
An additional $50 million would have to come from the city, county or other sources.
The team is still focusing on a site just north of the BMO Harris Bradley Center for the new arena, but also has designs on land in the Park East as well as a city-owned parking ramp at N. 4th St. and W. Highland Blvd.
The land in the Park East adjoining W. Juneau Ave., would be used for new development in the form of retail, commercial and office space.
The Bucks have not released details of the arena design or what the team has in mind in terms of new development.
Reported by: The Milwaukee Wisconsin Journal Sentinel
