The Journal Sentinel building at 333 W. State St. is part of one possible location for a new arena. Credit: Mike De Sisti

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The Milwaukee Bucks have hit a snag in talks with Journal Communications involving the acquisition of the firm's headquarters as the site of a proposed, multipurpose arena.

As a result, Marc Lasry, one of the co-owners of the Bucks, says the team may have to look at another site downtown.

"I think it's gotten more complicated," Lasry said in an interview before Friday's Miami Heat-Bucks game at the BMO Harris Bradley Center. "I think it's going to force us to sort of go to Plan B. Because I think time really isn't our ally. We've tried to be pretty honest about it. We've tried to say, 'We need to get something done sooner than later because we've got to get everything on board, we've got to start to break ground.'"

The Bucks' preferred site has long been the land occupied by Journal Communications, the UW-Milwaukee Panther Arena and, possibly, the Milwaukee Theatre. The Bucks have focused first on Journal Communications.

Asked what Plan B was, Lasry declined specific comment other than to say there were other sites. Those sites known to be under consideration include land just north of the BMO Harris Bradley Center, which is largely vacant and mostly shovel-ready; a city-owned parking lot at the corner of N. 4th and W. Wisconsin Ave.; and land at the corner of N. 2nd and W. Michigan streets.

Lasry did say that a month ago he felt there was a higher probability of securing the Journal Communications site. "Today, there is a lower probability," he said.

A source familiar with the negotiations said the complications Lasry referred to involved the Journal Communications building itself, bounded by W. State St., N. 4th St., W. Kilbourn Ave. and N. Old World Third St. Another complication is the difficulty of meeting the NBA's deadline of having a new arena in place by the fall of 2017.

The Bucks have said they wanted to secure a site by the end of the month. That possibility appears to be in doubt.

Steven J. Smith, chairman and CEO of Journal Communications, publisher of the Milwaukee Journal Sentinel, said Saturday in a statement that "the position of Journal Communications has not changed. The company position has remained consistent and it will do what is in the best interests of the employees, the community and the company."

In a statement on Nov. 1, Smith said the company was "excited about the ideas that they (the Bucks) have articulated for the development of downtown Milwaukee and we do not want to stand in the way of progress for our city." He also alluded to the fact that if Journal Communications has to move to a new location, "we need to be located in a place where we can continue to be a relevant, meaningful company serving our community and state."

Efforts to secure a site for the proposed arena comes as arena backers, particularly the Metropolitan Milwaukee Association of Commerce, are forging a plan to ask state legislators to approve state bonding as the public financing part of the project.

State bonding, which could be $150 million or more, would require action by the Legislature and the Building Commission. The money would be repaid by state taxpayers in contrast to a revenue mechanism in which the bonds would be paid off by the income tax paid by professional basketball players and other team employees.

In theory, the Bucks' request for state bonding would be treated the same as any other capital building project in the state budget.

In the most recent state budget, such projects included replacement of the state Department of Transportation Building and expansion of the KI Convention Center in Green Bay. An estimated $1.4 billion was spent on building projects.

But a Bucks' spokesman said talk of a specific financing plan is premature.

"We won't have a financing plan until we have a site selected and can determine the costs," said spokesman Jake Suski. "Any specifics at this point are nothing more than speculation. When we have a site, we'll work with everyone involved to ensure that the process is a collaborative public-private partnership that results in the best possible outcome."

To date, Lasry and Wes Edens, another Bucks co-owner, have pledged $100 million toward the arena and it is anticipated additional private capital will be secured. In addition, former Sen. Herb Kohl pledged $100 million when he sold the team to Lasry, Edens and investor Jamie Dinan for $550 million.

A new arena is expected to cost $400 million to $500 million.

"We're not ruling out any idea, but I think right now if you're reading tea leaves, the more likely scenario is a traditional enumerated project backed by state debt rather than some new tax mechanism," said Steve Baas, government relations director of the Metropolitan Milwaukee Association of Commerce.

"We have the same goal in mind," Baas said. "The quantification of the economic benefit of the team to the state is a basic building block of any argument for state support. Right now, the appetite in Madison among the leadership ... is pretty cool toward creating some new tax per se. Or some specific diversion that can be called a new tax funding the project."

Baas was referring to what has been called the jock tax, which in reality is a diversion of income taxes already paid by professional athletes in Wisconsin. A recent Legislative Fiscal Bureau report determined that the amount of money NBA players and other employees paid in December 2012 was approximately $10.7 million and will likely increase in years to come. That amount of money, the fiscal bureau report said, should be able to pay debt service on approximately $150 million in state general obligation bonding.

Baas said the Fiscal Bureau report provided evidence of the direct tax benefits the Bucks bring to the state that "a lot of the other building and bonding projects the state does don't necessarily have."

Baas said a financing plan could take on different forms, depending on the reaction in Madison from Gov. Scott Walker and the Republican leadership in both houses. He said Republican leaders had been briefed on the bonding idea, but said legislators are looking for more specific details of the arena plan.

"We are not taking anything off the table," Baas said about various financing plans. The Legislature, he said, may decide to take 50% of the projected tax revenue from the athletes or team officials as part of a financing plan.

"There is a higher comfort level of viewing this in the context of economic development and an enumerated project to keep a company in the state," Baas said.

Walker is expected to appear at the MMAC's annual meeting on Dec. 22 to discuss some of his policy objectives in the new budget.

Don Walker of the Journal Sentinel is on a fellowship established through Marquette University Law School's Sheldon B. Lubar Fund for Public Policy Research. The fellowship is aimed at providing support for journalism projects on issues of civic importance. All the work is done under the direction of Journal Sentinel editors.