Steve Greenberg and Allen & Company’s auction process to sell the Milwaukee Bucks (“Bucks”) for owner Herb Kohl has not only served the NBA but the City of Milwaukee. I have always said that a public investment in a new arena requires a sports.comm, i.e. a sports community. A sports community is a planned 365 day a year destination place, where people can not only congregate to watch sporting events, but eat, live, work, socialize, and learn.
In my article, “Sports.comm: It Takes a Village to Build a Sports Facility” I indicated that:
Sports venues have become a catalyst for urban transformation or revitalization. A sports facility is a destination place, an entertainment district, a bundling stimulus, a real estate development, and a place where people can work, eat, watch, congregate, buy, and socialize. Sports facility development is nothing more than real estate development. If constructed thoughtfully, a sports facility could convert the image of a league or team owner from a tax vulture into a long-term leader and visionary for a community. Moreover, a newly constructed or renovated venue can bring complete renewal and revitalization to blighted areas, environmentally hazardous sites, aged communities, or near-downtown areas. Real estate development has become a central component of sports facility development, and the results thereof—urban revitalization and transformation—may be as important as the building of the sports facility itself.
On April 8, 2015, the Bucks unveiled their plans for a sports.comm:
One of the Bucks new owners, Wesley R. Edens (“Edens”), is co-chairman of the Board of Directors of Fortress Investment Group, LLC (“Fortress”). Fortress is a leading global investment management firm based in New York City and is involved in private equity. Fortress was named hedge fund manager of the year by Institutional Investor in 2014 and has a history of a wide range of real estate investments. Fortress was a primary lender to Millennium Development Group for the building of the $875 million (CAD) athlete’s village for the 2010 Winter Olympics in Vancouver, British Columbia. By having Edens as an owner, of course Milwaukee was assured of benefiting from a larger vision and an arena that would be much more than just simply a sports facility.
Subsequent to the acquisition of the Bucks in May, 2014, primary owners, Mark Lasry and Edens added other investors. One of those investors was Mike Fascitelli (“Fascitelli”), former president and CEO of Vornado Realty Trust (“Vornado”). During Fascitelli’s 16 year term at Vornado, the company bought the Merchandise Mart building in Chicago and numerous office buildings surrounding Madison Square Garden in Manhattan. Under Fascitelli, Vornado also developed the Bloomberg, L.P. headquarters in Manhattan. Fascitelli had previously acted as the head of real estate investment banking at Goldman Sachs & Company. After his retirement from Vornado, Fascitelli formed a new investment firm, Imperial Companies. He is currently involved in a residential development in Hudson Yards through his new investment firm.
Milwaukee is so fortunate to have an ownership group that has not only financial, but development capabilities. In addition to creating a new Bucks arena the ownership group is envisioning roughly another $500 million investment in housing, offices, retail, and other buildings surrounding the new arena on the former Park East corridor. The county and city of Milwaukee own 9.8 acres between West Juneau and West McKinley avenues where Bucks owners unveiled plans for development to surround a new arena. The Bucks organization in its press conference announced that the new development will be a 24/7 community with residences, shopping, and office space. The ownership group has submitted a proposal to purchase some of the vacant land in the Park East corridor and to recruit local developers to help build out the properties. Fascitelli, who will be taking a lead role in the development, stated, “[w]e see multiple people, Milwaukee developers, participating in a big way. It’s not exclusive to us in any way.” Peter Feigin, Milwaukee Bucks team president, said Fascitelli will be “quarterbacking” development of the project. The overall vision for the downtown sports.comm could take ten years to build out.
“Fascitelli called the arena an engine or nucleus for future development. The arena and a surrounding plaza with retail and parking could be about 1 million square feet. But the surrounding retail, residential, including student housing, entertainment and office buildings could be an additional 1 million square feet. Bucks owners also envision a new Bucks practice facility on the western end of the Park East land, near The Brewery development.”
Alex Lasry, son of Bucks owner Mark Lasry, said at the Milwaukee Business Journal executive roundtable on downtown Milwaukee that “The alternative is for the [Park East] land to continue to be a hole in the middle of downtown. This is just the beginning of what Marc and Wes and Jamie want to do. This is not the end of the investment in Milwaukee if the Bucks are here.”
“It would not be a successful thing if we were just trying to build an area, but we’re trying to build a community,” Fascitelli said.
At the April 8, 2015 press conference the Bucks revealed three components of its proposed development plan, including:
- The arena and entertainment “live block” that would anchor the new development. The live block would front Fourth Street and connect with Old World Third Street;
- The arena design itself. The building would include glass and “transparency” that would provide views of Milwaukee’s skyline.
- The “live block,” which the Bucks said would be an “arena arrival experience” augmented by a transparent facade that marks the front door and a “monumental atrium.”
“The proposed site primarily sits between North Fourth Street and North Sixth Street and West State Street and West McKinley Avenue. The Bucks said the new development would be linked to nearby commercial zones already in existence including North Old World Third Street, Schlitz Park, The Brewery, the Milwaukee riverfront, Water Street and the Wisconsin Center District.”
The new Bucks ownership group is willing to invest in the vision it has not only with respect to sports, but with respect to real estate development in the city. This is a major plus for Milwaukee. They will infuse capital, they will transform our downtown and they will create a sports entertainment district that is so vitally needed in Milwaukee and for its future. All of this should be welcome grounds for a public investment in a billion dollar enterprise.