MILWAUKEE (AP) — The Milwaukee Bucks have signed a 30-year lease with the public entity that will own the team's new arena.
The Bucks will pay at least $1 million annually to rent the arena from the Wisconsin Center District. Those lease payments will total $45 million over the term of the lease. The district board approved the terms of the lease agreement Wednesday.
Construction can now begin on the $524 million arena that will be located just north of the Bucks' current home, the BMO Harris Bradley Center. Groundbreaking is set for June 18, with the arena expected to ready for the start of the 2018-19 season.
The arena will also host Marquette University basketball games, concerts and other events.
A new ownership group bought the Bucks from former U.S. Sen. Herb Kohl two years ago. The NBA had said that the team would need to build a new arena or run the risk of having the franchise moved.
"Personally I know we're very proud to fulfill the commitments that we made to Sen. Kohl when we bought the team, to keep it in Milwaukee, to the people that are here," co-owner Wesley Edens said before the Bucks' season finale on Wednesday night against Indiana. "It's an amazing day."
The team will be responsible for operating, maintenance and capital repair expenses. The agreement called for the Bucks to deposit $60 million into a capital improvements fund for the arena during the term of the lease.
A public financing package approved last year covered $250 million toward arena construction, while current and former Bucks owners have already committed $250 million. The Bucks have agreed to pay for any cost overruns during construction.
The agreement also includes a non-relocation clause. Asked about a roughly $550 million penalty that the Bucks would pay if the team did move during the lease, Edens said, "I think it's fair to say we're not going anywhere ... They built it with a financial penalty that is so punitive it would be not something you would consider, so it's a firm commitment."