Destination 2018: Milwaukee

Last April 9 marked the end of an era for the Milwaukee Bucks of the National Basketball Association. Not only was it the date of their last home game for the regular season, against the woeful Orlando Magic, but it was the final regular season home game in the Bucks’ 30-year-old BMO Harris Bradley Center, which cost $90 million when built but lacked the amenities of more modern arenas. Standing courtside before the game were two of the three New York–based billionaires who’d bought the team in 2014: Marc Lasry, cofounder of private equity shop Avenue Capital, and Jamie Dinan, the founder of hedge fund York Capital Management. Lasry, dressed in khakis and a sweater, looked relaxed—Lasry always looks relaxed—with the suit-clad Dinan a little more wired.

The game itself was anticlimactic: The Magic seemed to realize their designated role in the drama and glumly succumbed to the Bucks by a score of 102–86. But the Bucks’ exciting star, Giannis Antetokounmpo, also known as the Greek Freak, didn’t play—he was resting a bum ankle in preparation for the playoffs against Boston. Still, the fired-up crowd didn’t seem to care: The Bucks were on the move, and as a result, so was their hometown.

This fall, the Bucks start play in their cool new $524 million, 17,500-seat arena, Fiserv Forum, which will be tricked out with the latest in entertainment technology, better views for the fans, sausages from local sausage maker Klement’s, Hawaiian poke bowls and beers from MillerCoors, a nod to Milwaukee’s brewing history. For the first time in over a decade, the team is actually good. More important, the Bucks’ new owners have kicked off a wave of development—much of it with their own money—that is pouring new energy, excitement and cash into Milwaukee.

“Thirty or 40 years ago, all you needed to survive in this city was a strong back and a good alarm clock.” —Mayor Tom Barrett

The small Wisconsin city, population nudging 600,000, needs all of the above. In the post-World War II years, brewing and manufacturing dominated the Milwaukee economy. The brewing—think Miller, Pabst, Schlitz, —dried up due to changing consumer tastes and industry consolidation. Manufacturing jobs disappeared to Mexico and Asia. “Thirty or 40 years ago, all you needed to survive in this city was a strong back and a good alarm clock,” says mayor Tom Barrett. “Because you had all these great blue-collar jobs. With limited education, you could support a family.”

Not anymore. Milwaukee—which Barrett says is about 39 percent African American, 36 percent Caucasian, 18 percent Hispanic and 4 percent Asian American—struggles with poverty and unemployment. On top of its structural economic issues, the financial crisis hammered Milwaukee. “We lost about $5 billion in property values,” Barrett says—with resulting drops in property taxes. Now, Milwaukee’s poverty rate of about 28 percent is almost twice the national average. Until this year, when it has improved, the city’s unemployment rate was also well above the national average. Rankings of violent crime show it to be one of the 15 most dangerous cities in the country. So when in 2013, then 78-year-old Bucks owner Herb Kohl, a businessman and former United States senator, announced that he was searching for a new investor, Milwaukee was rattled. Would a Bucks sale—and perhaps departure—push Milwaukee even further down?

Truth be told, the team hadn’t been exciting in years. Its most recent successful season came in 2001, when it reached the Eastern Conference finals but lost in seven games to the Philadelphia 76ers. But Milwaukee hadn’t abandoned the team. “It has an unbelievable heritage,” says team president Peter Feigin. “It’s won an NBA championship”—beating the Baltimore Bullets in 1971—“It’s had Kareem [Abdul-Jabbar] and Oscar [Robinson]. Nobody ever disliked the Bucks with any kind of energy. They were just waiting for a reason to reembrace them.”

A departure was possible. Though Kohl flatly stated that he would only sell to a buyer who would commit to keeping the team in Milwaukee, the NBA wanted a new arena for the Bucks—and if the league didn’t get it, a new owner might be compelled to move the team. Several potential buyers thought the team would be more valuable in a larger market. “People thought the Bucks would do better in Las Vegas or Seattle or Orange County,” says Wes Edens, cofounder of Fortress Investment Group and another owner.

Approached by representatives of Allen & Company, the investment bank Kohl hired to manage the sale, Edens was the first to nibble. He’s a basketball fan who had front-row Knicks tickets for over a decade. But it wasn’t a fan’s passion that drew him to a professional sports team. “My analysis of it is that it has more in common with buying a business than it has difference,” he explains. “Where people go sideways is when they don’t treat it like a business.” Edens reached out to Marc Lasry—the two were longtime friends, and Lasry owned a small share of the Brooklyn Nets. “I’d been involved in trying to buy a team for a while,” Lasry says. “We started doing the work on it and the more work we did the more excited we were about the opportunity.”

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