As a new deal emerges from the White Sox camp for another possible stadium deal, property around the United Center is being bought up, and the Bears found out their demoed Arlington Heights property is worth $125 million. The Cook County Board of Review voted this week to assess the Bears property at $125 million, $65 million more than what the Bears estimated it was worth.
When we receive more information about the financing for the new Sox stadium at the 78, we will share it with you. So far we know that the deal being proposed asks for $1.1 billion in subsidies along with close to $900 million in infrastructure in the 78. Similar to the Lincoln Yards project, the developer is to front the infrastructure investment and then be reimbursed by the City as the projects start generating taxes. So far, neither of these mega TIF projects have panned out as was guaranteed to the City Council and public in 2018. As was stated by city officials at the original 78 vote: The 78 is a $7 billion mixed-use project that is anticipated to generate 34,000 permanent and temporary jobs and 10,000 new homes over the next 30 years, including 2,000 affordable units, 12 acres of park space, and a $25 million Neighborhood Opportunity Bonus payment that will support West and South side commercial projects, among other public benefits. And in another report, City Council approves $2B in TIF money for Lincoln Yards, The 78.
Any major funding and plan for the Sox would require state approval and amendments to the 78 TIF. At the same time, the Chicago Bears are competing for city and state subsidies to possibly rebuild Soldier Field in the adjacent parking lot, but that proposal has as many high hurdles to jump. A point to remember with Soldier Field, managed by the Chicago Park District, is the Illinois Sports Facilities Authority (ISFA) issued $398,998,040 of debt in 2001 to provide financial assistance to the renovation of the stadium and is still paying it off. The ISFA issued $137,000,000 in debt in 1991 to financing the current White Sox ballpark and is still paying off that debt. Both teams now want brand new stadiums while we are still paying off the debt on their existing venues. It can’t all go to one or the other, or even both. The State hotel operators’ tax (5% tax) is divvied up to three different accounts- see an explanation of the hotel taxes here at the Civic Fed. Chicago’s current hotel taxes are the highest of any major city in the US, aside from New York.
The Sox also want all of the sales tax collected in the 78 and a new Sales tax district to back the bonds. They have also indicated they want to tap into the STSC fund. Proceeds of the STSC sales tax securitization bonds were designated for post-Covid capital improvement projects in the city and certain Chicago Recovery Plan projects. However, allowing this fund to be tapped into without limit will likely mean another credit rating hit on the one highly rated and stable fund the City has. After six years, the 78 TIF would be looking for this jumpstart deal because of their inability to initiate development on the site.
Several new ballparks and stadiums are being built around the US, and while some are receiving public funds, most are relying primarily on private equity in exchange for ancillary development rights as study after study concludes that taxpayer funded stadiums are poor investments. Field of Schemes, (written by Neil deMause) recently opined that the Sox deal “would be crazytown”. Field of Schemes has spent years outlining nearly every major arena/stadium deal across the US.
Mayor Brandon Johnson was quoted as saying that “everything is on the table here. But again, I want to make sure that there’s a real commitment to public use and public benefit.” If a new ballpark for the White Sox was capable of generating significant public benefits the question is what evidence exists of those benefits from the current publicly funded ballpark. Little question that the developer of the 78 would appreciate an infusion of hundreds of millions of taxpayers dollars to help jumpstart their development plans. The key question for the City is how and why this is a priority given all of the systemic challenges we currently face.
There are dozens of questions to ask. Is this even worth continuing the discussion? What will this do to our bond ratings, our pension payments, and ever increasing debt burden? What is the advantage to the Chicago taxpayer? Very little at all in the present scenario.
Taxpayers should be weary of the claims and projections of billionaire team owners when they lobby lawmakers for subsidies. Chicago taxpayers have all the more reason to question the wisdom of such schemes given the recent failures of the public investments in the Bears and White Sox to achieve their stated objectives. We are still paying off the debt associated with these projects that were sold to the public as wise investments that would generate economic benefits long past the point their public debt was paid off. If there is an actual deal worth considering in the future, it should be laid out in full to taxpayers to avoid any backroom dealing.
Simultaneously, the Mayor is also proposing an idea to use city tax dollars from expiring TIFs to fund $1.25 billion in varying ideas over a five year period. The proposal is outlined in this document and in this article. This is in addition to any other tax proposals. While we need new development and a broader tax base to keep the City moving forward, all proposals need to be critiqued and vetted by the taxpayers of the City and elected officials at the City, County, and State levels.
