Brewers Inflated Stadium Costs

The more we learn about Gov. Tony Evers’ plan to give away $290 million of the state surplus (otherwise known as taxpayers’ money) to the Milwaukee Brewers the worse it gets.

This week Bruce Murphy of Urban Milwaukee wrote a stunning and stinging analysis of how Evers arrived at that $290 million figure. It’s pretty ugly.

The top line numbers go like this: $84 million became $428 million which grew to $572 million before Evers settled on $290 million.

Let me explain.

The $84 million. That’s the estimate that the Southeast Wisconsin Professional Baseball Park District came up with for maintenance on American Family Field through 2040. The number was based on an exhaustive analysis from the consultant hired by the District, M.A. Mortenson. The consultant concluded costs for maintenance would run about $72 million and that it would be prudent to add another $12 million or so for inflation and unhappy surprises. And, in fact, the District did put $70 million in the bank before the regional sales tax that funded most of the park’s original construction costs went away a couple of years ago.

The $428 million. But the Brewers didn’t like that number, so they commissioned their own study, this one by a consultant of their own choosing. Venue Solutions Group came up with a whopping $428 million. The Brewers sat on this report until after the November election, apparently because they didn’t want it to become an issue in the gubernatorial election. They knew stadium subsidies are unpopular and they didn’t want Evers or his opponent, Tim Michels, to get backed into a corner and pledge to oppose this.

The $572 million. If you’re not outraged already (and why the heck aren’t you?) get ready for this. How did Evers do his due diligence? He hired a third consultant to check the numbers. That was fine except that the consultant chosen was an outfit called CAA-ICON. Murphy reports that this group touts itself as being “TRUSTED BY OWNERS”, the capital letters being supplied not by Murphy, but by the firm itself. And, surprise!, CAA-ICON told Evers — after only a few weeks of work — that even the Brewers’ number was too low. They came in with a range that had a median of $572 million.

The $290 million. So, Evers now had “data” that purported to show that the Brewers were being stingy with their own $428 million, which was five times higher than the Mortenson estimate. So, he added “only” $20 million to that to get to $448 million. Then he subtracted the $70 million that the District already had in the bank to get to $378 million. The $290 million is to be paid in a lump sum, which the Brewers can put in the bank and draw on over 20 years. With interest, it could grow to around $378 million.

That last point is really significant. I had assumed that the difference between the taxpayers’ $290 million and the $428 million in alleged costs would be borne by the team. Apparently not. Murphy reports that under the current contract the Brewers are responsible for 36% of maintenance costs, but under Evers’ proposal taxpayers would assume all of it.

There’s even more in Murphy’s excellent piece and there’s a lot of other good stuff in Urban Milwaukee. It’s worth visiting the site.

Evers has now put Speaker Robin Vos in a jam. He announced this without checking in with Vos, which undermines what had appeared to be a welcome rapprochement between the two. But now Vos is going to have to navigate between heavy breathers in the Milwaukee business community and rural right-wing populists in his caucus who hate all things Milwaukee.

In any event, don’t trust the numbers.