Senior Vice President for the Milwaukee Bucks Alex Lasry explains how the city’s bid for the Democratic National Convention made it a finalist.
Organizers of Milwaukee’s bid for the 2020 Democratic National Convention have to solve an economic puzzle.
They’re looking for a third-party entity to guarantee at least a $10 million line of credit, essentially serving as a backstop for the bid.
Milwaukee Mayor Tom Barrett said he is “confident” the bid committee will be able to get the line of credit “resolved.”
But he’s not committing the city to that role.
The backstop wouldn’t come into play until after the convention, and only then if the host committee falls short of fundraising and runs a deficit.
“We are actively working to secure financing for the convention and I’ve spoken to a number of business leaders, a number of banks to help us,” Barrett told the Milwaukee Journal Sentinel.
“And I’ve made it very clear in the conversations that I’ve had that the city’s budget is pretty severely restricted. And so nobody should be expecting property tax dollars for a political convention,” he added.
Milwaukee, Miami Beach and Houston are the three finalists for the convention that will be held July 13-16, 2020.
The pick is expected to be announced early next year, with the winning committee putting up $5 million when it signs the contact with the Democratic National Committee.
A line of credit will also need to be opened.
According to the DNC’s requests for proposals, the winning city will need a $20 million line of credit. But that’s likely open for negotiations based on the size of the city and the projected costs of the convention.
Milwaukee organizers have said a convention here would cost up to $70 million to stage, with the money raised privately. They’re looking at a $10 million line of credit.
In the past, Democratic conventions have been funded by large donors, unions and corporations.
Philadelphia’s host committee raised $85.4 million for the 2016 Democratic Convention, which included a $10 million grant from Pennsylvania’s Department of Community and Economic Development.
The federal government provides each convention city a grant to cover security costs.
The last time a line of credit was not repaid for a Democratic Convention was in 2012 in Charlotte, N.C. The shortfall was $6 million.
Barrett has been exploring the possibility of some funds coming from the Wisconsin Center District and Visit Milwaukee. But that would be in the hundreds of thousands of dollars, well short of the $10 million loan guarantee.
“Anytime you’re looking at a convention, you need to follow the stream of money,” he said.
That stream leads to the Wisconsin Center District, which receives between $33 and $35 million annual funding through the city hotel tax and countywide hotel, food and beverage taxes as well as a rental car tax.
The money is used to pay for debt service for the construction of the Milwaukee Convention Center and the renovation of the Miller High Life Theatre, along with $8.5 million sent to Visit Milwaukee.
Barrett said he’d like to see what’s available from the Wisconsin Center District.
“That’s not to say there’s a pot of gold there,” he said. “But that’s the natural place for us to go.”
Last week, Barrett said he spoke with Tom Perez, the chairman of the DNC, and during the telephone call he said they “went through the issues” on the convention.
“It was a very constructive conversation,” Barrett said. “I know what our challenges are, he knows what his challenges are. He has challenges in other cities. This is an arm’s-length transaction, but at the end of the day part of our argument is from a political standpoint there is a lot of advantage to having the convention here.”
Besides Wisconsin being a battleground state, another advantage for Wisconsin is that Fiserv Forum, the proposed convention site, is a state-of-the-art arena.
Alex Lasry, executive vice president of the Milwaukee Bucks, heads the local bid committee. The Bucks are more than willing to have the convention at the arena.
“We have things going for us,” Barrett said adding that the Democrats are “going to look at the full package and then make the decision that’s best for them.”
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