The demand is there. The financing isn't. This deal shows what it actually takes to get a youth sports facility off the ground.
Cobalt Partners, a Milwaukee-based developer, closed on a 16-acre site in Brown Deer, Wisconsin for $3.2 million. The plan is to build a youth sports complex with indoor facilities, including two ice hockey rinks and eight basketball courts (convertible to 16 volleyball courts). The village supported the land purchase with a $2.5 million loan.
Here's the problem: initial estimates put the project at $50 million. After further design and programming work, updated estimates now range from $80 million to $120 million.
"The demand is there, the users are there and the willingness is there from the municipality, but we still have a gap to work through on the economics," said Cobalt CEO Scott Yauck.
That gap is the story.
What's Being Proposed
The complex would include one or two main buildings with indoor sports facilities. The core program is ice hockey (two rinks) and basketball/volleyball (eight courts that convert to 16). Cobalt is also exploring adding restaurant space, a hotel, or small-scale retail.
Both a village-funded market study and a separate feasibility study by Cobalt point to strong demand. The users are there. The municipality is supportive (hence the $2.5 million loan for land acquisition). But demand and support don't automatically translate into a financeable project.
Why the Costs Jumped
Initial estimates of $50 million ballooned to $80-$120 million after detailed design and programming work. That's a common pattern in facility development. Early numbers are often based on rough programming and comparable projects. Once you get into actual design, site work, materials, and local construction costs, the real numbers emerge.
The project is now in detailed design phase, with Cobalt evaluating several financing options:
Tax incremental financing (TIF) from the village would use future property tax revenue generated by the project to help fund construction.
Value engineering means finding ways to reduce costs without gutting the program. Sometimes that works. Sometimes it means cutting features that made the project attractive in the first place.
Sponsorship or naming rights could bring in outside capital. For a project this size, a naming rights deal could be meaningful, but it requires finding the right partner.
Phasing the project would spread construction over time, reducing the upfront capital requirement but extending the timeline to full buildout.
What This Tells Us
Youth sports facility development is hard. The demand side is usually straightforward: communities need fields and courts, travel teams need tournament venues, families want local options. The supply side is where deals fall apart.
Construction costs have risen sharply over the past few years. Financing is more expensive than it was in 2021-2022. And the gap between what a project costs and what it can support through operations is often wider than developers expect.
Cobalt's situation is a useful case study. They've got municipal support, a purchased site, completed studies showing demand, and a clear program. They're still facing an $80 million gap. That's the reality of facility development right now.
The Bigger Picture
This project sits alongside another Cobalt youth sports complex planned for Big Bend in southern Waukesha County, which would focus on outdoor sports (baseball, softball, lacrosse, soccer). Together, they represent a significant bet on youth sports infrastructure in the Milwaukee region.
For investors, the takeaway isn't that this project will fail. It might get built. The takeaway is that facility development requires patient capital, creative financing, and often public-private partnership structures to make the numbers work. The demand is real. The path to getting something built is complicated.
Takeaways for Investors
Demand doesn't equal feasibility Strong market studies and user interest don't automatically mean a project pencils out. The financing gap is often the hardest part.
Costs are climbing A jump from $50 million to $80-$120 million after detailed design is significant. Construction cost inflation is real, and early estimates should be treated with skepticism.
Public-private partnerships are often necessary The $2.5 million village loan for land acquisition and potential TIF support show how municipal involvement can help bridge financing gaps.
Naming rights and sponsorships are part of the capital stack For large facilities, sponsorship deals aren't just marketing. They're a financing tool.
Phasing is a common solution When full buildout isn't financeable, phasing lets developers get something built while deferring the rest. It's not ideal, but it's often the path forward.
