The Chicago Bears explore the city of ditching. What are the costs if they do? | New
News of the Bears signing a $ 197.2 million deal to buy a giant piece of land in Chicago’s suburb of Arlington Heights rocked the city early Wednesday like a frigid lakefront gust during a game of January at Soldier Field.
The deal is far from done, but it does indicate the Bears are seriously considering leaving Chicago to build a new, state-of-the-art stadium, and not just bluffing as Mayor Lori Lightfoot suggested in June when interest in l The earth team has surfaced for the first time. Wednesday’s deal allows the Bears to take a closer look at building a stadium at the 326-acre site of Arlington International Racecourse, where owner Churchill Inc. held its last weekend horse races. -end last.
But like most big decisions in business, sports – and government – the final call will depend heavily on finances.
The McCaskey family who own the Bears have been quiet about their quest for a new home, and the Bears remain a private company, leaving many questions unanswered about how the team could fund a potentially multibillion stadium. dollars unanswered at the moment.
What is clearer is the potential cost to the city of Chicago if its high-profile tenant for Soldier Field leaves, and how much the Bears might have to fork out to break their lease with the city.
Here’s a look at some of the money issues surrounding the team’s possible bolt to the “burbs”:
How much would a new stadium cost the Bears?
This, of course, would largely depend on the Bears. But price tags on several new NFL stadiums suggest the cost would approach $ 2 billion, if not more.
A Tribune analysis in July found that the average cost of the NFL’s seven most recent stadiums was $ 2.2 billion in current dollars. The breakdown:
—Allegiant Stadium – Las Vegas: $ 1.9 billion, opened in 2020
—SoFi Stadium – Los Angeles: $ 5.5 billion, opened in 2020
—Mercedes-Benz Stadium – Atlanta: $ 1.5 billion, opened in 2017 ($ 1.64 billion today)
—US Bank Stadium – Minneapolis: $ 1.1 billion, opened in 2016 ($ 1.23 billion today)
—Levi’s Stadium – San Francisco: $ 1.3 billion, opened in 2014 ($ 1.47 billion today)
—MetLife Stadium – New York: $ 1.7 billion, opened in 2010 ($ 2.1 billion today)
—AT&T Stadium – Dallas: $ 1.4 billion, opened in 2009 ($ 1.85 billion today)
The pitch alone would cost the Bears $ 197.2 million, according to Wednesday’s announcement, but the team wouldn’t need the entire 326-acre site for the stadium and parking lot, leaving some other development opportunities. Churchill Downs said on Wednesday that he plans to close the sale in late 2022 or early 2023.
Would taxpayers pay for a new stadium?
It seems unlikely, at least to a large extent.
If the Bears have moved to Arlington Heights, it’s not hard to imagine the suburb bearing some infrastructure costs in and around the stadium site. Beyond that, major public funding for a Bears Stadium would be overstated – especially since it’s only been 17 years since the completion of the $ 690 million renovation of Soldier Field which placed a structure in saucer-shaped glass and steel atop the limestone and colonnades of the original 1924 World War I Veterans Memorial.
Taxpayers have covered $ 432 million from the Soldier Field renovation project, a figure that will rise dramatically once the hundreds of millions of dollars in debt and interest are paid off in 2032. City and state remain short money amid deep fiscal challenges, making the political appetite to fund another stage hard to understand.
How would the Bears finance a new stadium?
It’s more difficult to decipher. Unlike many NFL teams, the Bears are not owned by a billionaire who was independently wealthy before the team was purchased.
Much of the McCaskey family’s wealth is believed to come from the team, which Forbes valued at $ 3.5 billion. This value, of course, would only materialize with a sale.
With family matriarch Virginia McCaskey, the daughter of founding owner George Halas, approaching her 99th birthday, there has been speculation for years that the next generation of McCaskeys could pursue a sale.
Considering the team is worth $ 3.5 billion despite never owning a stadium of its own since moving to Chicago from Decatur in 1921, it’s not hard to imagine the franchise’s value rising. with a new retractable-roof or domed stadium that could host other events, such as the NCAA Final Four.
Since the Arlington Heights site is large enough to accommodate further development, the Bears may pursue a partnership with a developer to help cover construction costs with shared revenue from other projects on the site. . The NFL is also likely to grant tens of millions of dollars in loans as it has to help other teams with new stages. For example, NFL owners approved a $ 500 million loan for the LA Rams to build the SoFi Stadium.
Back in the days when the Soldier Field renovation project was sold to the public, a major topic of discussion was how the Bears covered over $ 200 million of the cost, which at the time was called the biggest private contribution for a state-owned NFL stadium. But a 2002 Tribune investigation found that the Bears had actually contributed only about $ 30 million of their own money, with the remainder being covered by $ 100 million from the NFL and the sale of seat licenses. personal to season ticket holders.
With the construction of a new stadium, the Bears could presumably again count on selling personal seat licenses to season ticket holders, but they would ask them to do so roughly 20 years after previously being at Soldier Field.
Additionally, the Bears could generate significantly more revenue with a new stadium than their agreement at Soldier Field, which limits them to revenue from tickets, concessions, stadium signage and the use of 4,250 parking spaces. . And unlike other NFL franchises that have their own stadiums, the Bears’ income is limited to the 10 home games played per season (including preseason).
The Park District collects all revenue from non-Bears events at the stadium and has entered into a deal with the Chicago Fire of Major League Soccer to play at the site starting in the 2020 season. The Bears could also strike a lucrative rights deal. naming for their new stadium, which is not allowed at Soldier Field.
Can the Bears pay to break their lease early in Chicago?
Yes, and a July analysis by the Tribune found the expense to be relative peanuts to the price of building a new stadium.
The Bears’ current rental payment in the Chicago Park District is $ 6.48 million per year, although the team only paid $ 3.1 million in 2020 after fans were not cleared to attend games due to the pandemic.
A Tribune’s review of the team’s 120-page lease with City showed that it wouldn’t be difficult for the Bears to break the deal before it ends in 2033, and such a move would likely trigger negotiations between the team and the Park District to reach a financial settlement.
But in the event the Bears leave Chicago for the Northwestern suburbs without reaching such a settlement, a damages clause in the lease requires the team to pay 150% of the money they owe on the rest. of the lease to the city within 30 days. . The fewer years left on the lease, the smaller the payment becomes.
If the Bears were to break the lease in five years, in 2026 the team would have to pay the city $ 84 million in damages, according to the analysis. This estimate assumes that the inflation-adjusted Bears payments to the city would continue to rise at a rate similar to increases since the lease was created in 2003. If the team waited beyond 2026 to leave Soldier Field, the financial penalty would be less.
A fine of $ 84 million might seem like a lot of money, but in the high-priced world of the NFL, that’s only 3% of the $ 2.2 billion average cost of the league’s most recent seven stadiums. .
Tribune’s analysis found that potential fines if the Bears break the lease in subsequent years would be $ 74 million in 2027; $ 63.8 million in 2028; $ 53.3 million in 2029; $ 42.7 million in 2030; $ 32.1 million in 2031; $ 21.6 million in 2032; and $ 11 million in 2033.
Are Chicago taxpayers still forced to renovate Soldier Field if the Bears leave?
Yes. Soldier Field is owned by the Chicago Park District and the obligations for its renovation are paid by the Illinois Sports Facilities Authority, a city-state agency controlled by the governor.
The $ 432 million in government bonds will increase dramatically once the hundreds of millions of dollars in debt and interest are paid off in 2032. The bonds were to be repaid when the team’s lease expires in 2033.
The public part of this cost is largely financed by a municipal hotel tax. If hotel tax revenue is insufficient, the city hall and city taxpayers, not the state, are required to make up the difference. This happened in 2011, when then-mayor Rahm Emanuel said city taxpayers shouldn’t be an ATM for Soldier Field, although he never proposed a new mechanism. funding.
Due to the pandemic, the city’s hotel tax again failed to generate enough revenue to cover debt payments in 2020 to prevent the city hall from having to fork out the money.
It is not clear when hotel tax revenue will improve enough to fully cover Soldier Field’s debt payments again. On top of that, the debt payments are deferred, which means that the hotel tax will have to generate even more revenue in the last years of payment. In case of failure, the town hall would again be obliged to make up the difference.
In addition, the Sports Facilities Authority is paying an allowance of about $ 3 million to the Park District to make improvements to Soldier Field as part of its lease with the Bears. Park District officials questioned whether that money would continue to be available if hotel tax revenue did not rebound amid the pandemic.
If the Bears leave Chicago before their lease at Soldier Field expires, whether the city has enough money to cover the remaining debt payments will likely depend on the terms of its financial settlement with the team and health. future of the city’s hotel tax revenues. Of course, once the debt payments are finally paid off, the city would have that part of the hotel tax to spend again on Soldier Field or elsewhere in the city budget.
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