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Spurred on by an educational meeting by the Wisconsin Taxpayers Association on how to get a referenda question on the ballot, a group against the public funding of an arena has started.

The Racine Common Council voted 10 to 5 in March in favor of spending $600,000 from its intergovernmental revenue fund to pay for the first phase of a $43 to $49 million downtown arena and hotel/events center project.

The project includes a 130-room hotel, conference and meeting space, and a 3,000 to 5,000 seat multi-purpose event center. A USHL hockey team is expected to be its first tenant. It is expected to bring in 600 to 800 jobs, 50,000 new visitors to the city, and $322 million in new spending over the next 30 years. The hotel would be privately funded, but the event center would be a publicly funded project.

Now a group of citizens against the publicly funded part of the project is organizing to put a possible referenda question on the ballot to stop the project.

“We’re going to put $50 million into the ground and then in hopes of making a loss of $500,000 a year,” said Scott Obernberger, owner of Twice Baked Pottery. “If I did that, I would be out of business.”

How The Referenda Process Works

Ken Brown, owner of EYEopenerZ, explained to 24 people how they can stop the project.

Brown explained that there is some ambiguity in the law on whether the Racine Taxpayer’s Association can take a position on a referenda. So the meeting was strictly educational on how a referendum can be put on the ballot. The meeting was then adjourned and Brown put an “No to the Arena” button on his lapel.

The group would need to collect the number of signatures equal to 15 percent of the number of people who voted in the last gubernatorial race within the City of Racine. In this case, it would need to collect about 3,800 signatures. The group hasn’t decided on what question they want to ask with regards to the arena. But once the question is asked and they receive enough signatures, the alderman would need to vote on whether to act on the question and stop the project, or put the question on the ballot for a city-wide vote.

“The question is what the timing would be,” Brown said. “We’re actually at a really bad time for when the referendum would be because we would need 3/4 of the council normally to put it on the next upcoming election. One thing that works in our favor is that Mayor (John) Dickert is resigning early and we’re very likely going to have a special election.”

Investor Challenges Group On Numbers

Local investor Tad Ballantyne attended the meeting, even though he has come out in favor of the project. He asked whether the group’s position that the project should be put on the ballot as a referenda or that they don’t like the project.

“They did this thick report and said how much it’s going to bring in. I don’t know if anybody read it on the City Council, but it’s $300 million,” Ballantyne said.

Click here to read: Racine Downtown Market and Feasibility Study.

While Ballantyne doesn’t have a financial stake in the arena project itself, he does have several residential and commercial properties downtown. Ballantyne said he called the author of the feasibility study.

“When I called the guy and asked: ‘What number do you really think and what number do you really publish? And he said, ‘This is what number we really publish because it’s the number we can tie it too.’… I said, tell me off the record and it was like this crazy number, it was like three times that,” he said.

Ballantyne said the author of the study couldn’t publish that number. But he also pressed the group to focus on being critical of the study.

Brown said the focus will be on how much the city will increase its debt.

“We’re going to increase our debt by 50 percent, I think the taxpayers should have a say beyond who they just happened to elect,” he said.

Ballantyne questioned the group on whether the focus should not be so much on the bonding for the project, but rather the margin.

“Is this thing going to make money? And is there going to be enough to cover the interest, and principal? Or is there going to be an operating loss when you add that in and is that what gets allocated to our tax bill annually?” he asked. “And that gets to… who do you hire to run this? Is it the operating loss that we’re worried about in the increase of our real estate taxes?”

Mayor’s and Consultant’s Stance on Arena

In March the City released a series of frequently asked questions about the referendum. Over the next few months, SB Friedman Development Advisors will create a more detailed financial model for the project. The model will include possible funding sources and recommendations.

“By bringing revenue to the city, the hotel and event center will aid in the revitalization of the Racine community. This revenue helps to fund city programs, infrastructure development and community services,” the report pointed out.

According to market analysis conducted by Hunden Strategic Partners last year:

  • The hotel and event center is estimated to generate $7 million in net new local spending annually.
  • Over the next 30 years, it will bring in an estimated $104 million in net new earnings locally.
  • The project is expected to draw approximately 50,000 visitors annually.

Related story: City Releases Answers To Arena, Events Center Questions

Next Step For Petition

In the meantime, the group plans to organize. There isn’t a general election scheduled for this fall. However, there could be a special election scheduled for Mayor in August or September, which would be the best timing, Brown said.

Those citizens in attendance formed a committee of five people that plan to form the question for the ballot, which needs to include a “Be it resolved statement.” A possible statement being considered is: “Be it resolved, that no public monies should be spent to build or in any way assist in the building of any proposed arena, convention project unless or until the voters of the City of Racine approve doing so through a binding referendum.”

The committee, which will meet next week, would not be part of the Racine Taxpayer Association. The group hopes to gather 40 people together to collect signatures and will have 60 days to collect them.

In an effort to be transparent, Tad Ballantyne is an investor in the Racine County Eye.

 

 

Denise Lockwood has an extensive background in traditional and non-traditional media. She has written for Patch.com, the Milwaukee Business Journal, Milwaukee Magazine and the Kenosha News.