Happy new year, cities drowning in stadium debt!

Happy new year! The arrival of 2013 means a fresh start, and a time to put the troubles of the past behind — unless, of course, you’re Bridgeview, Illinois:

One of the Chicago area’s most debt-saddled suburbs is borrowing even more money as it tries to put off the worst of its financial pain over the struggling Toyota Park stadium.

The latest borrowing binge — $27 million — will put Bridgeview taxpayers at greater risk of funding an even bigger bailout of the village-owned stadium if it continues to flounder. Municipal finance experts say it is another worrisome sign for a small suburb that took a huge gamble to build the 20,000-seat professional soccer stadium.

As you may recall from past reports here, Bridgeview borrowed $100 million in 2006 to build a new stadium for the Chicago Fire, with the expectation that it would pay it off from stadium revenues. Except that the lease said that all soccer revenues would go to the team, leaving the city with only money from concerts and the like, which haven’t been enough to pay off $100 million in debt. So now Bridgeview keeps borrowing more money to pay off the existing loans, and as the Chicago Tribune reports, “The move comes as Bridgeview officials try to reassure residents in newsletters that do not detail how the downward spiral will be reversed.”

Okay, but it’s a happy new year for everyone else … okay, except maybe Glendale, Arizona:

Glendale, Arizona’s bet on becoming the Phoenix area’s sports and entertainment hub is resulting in higher taxes, fired workers and rising penalties on its debt.

The city confronts new budget cuts after agreeing last month to pay $308 million over the next 20 years to keep the National Hockey League’s Phoenix Coyotes, which had the worst attendance in the NHL last season. After downgrades by both Standard & Poor’s and Moody’s Investors Service that cited the hockey payments, investors demanded a 7.5 percent higher penalty on city debt compared with 11 months ago.

Glendale, of course, just put itself on the hook to pay the Coyotes’ new owner upwards of $12 million a year just to keep his team there, on top of the $12 million a year they’re spending to pay off the arena bonds. Plus the city put in money for infrastructure for the state-built Arizona Cardinals stadium, plus $200 million for a spring training baseball facility. Which all worked out great, if by “great” you mean having to fire large chunks of your city staff while being unable to borrow any more money at less than usurious rates.

Not every stadium and arena deal works out this badly, obviously, and the economic downturn hasn’t helped. (And isn’t going to be helping for a while yet, it looks like.) But if there are any suburbs and small cities out there reading this who had been thinking, “Yeah, a new stadium would totally be a way for us to get noticed!”, it’s worth noting: You might end up getting noticed for reasons you’d prefer not to.

New soccer stadium somehow fails to rain riches on Philly suburb

Hey, remember how a new soccer stadium in Chester, Pennsylvania was doing wonders for the local economy, according to a newspaper article that cited a single local union carpenter as its main source? How’s that working out two years later?

Four years ago, former social-sciences professor John Linder questioned why promoters wanted to “bring soccer to a basketball town.” As mayor since January, he’s been trying to make the $122 million PPL Park, financed mostly with county and state funds, generate enough money to meet the city’s costs.

[Linder] may levy parking and amusement fees on mostly out-of-town fans. He also wants Major League Soccer’s Philadelphia Union to make a $500,000 payment in lieu of taxes that it missed in 2010. The team says it’s negotiating the fee.

“What they’re paying us doesn’t cover our expenses,” Linder said in a telephone interview. “I have a mandate to my citizens that we persevere to get the best bang for our buck.” …

In Chester, 15 miles (24 kilometers) south of Philadelphia, public funds covered about 71 percent of the cost of the stadium for the Union, which is in ninth place in the league’s 10-team Eastern Conference. Related residential projects and a convention center haven’t been built, leaving the city of 34,000 in a program for distressed communities that it entered in 1995. Chester’s poverty rate is almost triple the state average.

There isn’t actually much in the way of economic impact details in this piece — maybe Bloomberg couldn’t find any carpenters to lend their expertise — but the overall picture is certainly less rosy. The best part, meanwhile, is that Union CEO Nick Sakiewicz says he hasn’t paid the back PILOTs he owes the city because nobody sent him a bill.

In related low-income-suburbs-who-thought-it-was-a-good-idea-to-build-soccer-stadiums news, meanwhile, residents of Bridgeview, Illinois, are really steamed about the $200 million in debt their town has racked up, in part by building a new stadium for the Chicago Fire. Best part of this article:

Mayor Steven Landek, who is also an appointed state senator running for election this fall, at first offered to meet privately in the homes of the handful of residents who complained.

But resident Julie Padilla told Landek that her husband was so angry he wouldn’t let Landek in their house, and then she and two other residents asked Landek to hold a public forum. Landek said he would, although no date has been set.

Chicago Fire stadium leaves Bridgeview taxpayers “kicked in the teeth”

It’s not very often that I get five readers emailing me about the same article — but then, it’s not very often that a major U.S. daily newspaper runs an article about a stadium deal with a headline that features the phrase “kicks taxpayers in the teeth”. From Saturday’s Chicago Tribune:

The hulking, red-brick Toyota Park rises impressively from the side of gritty Harlem Avenue, its canopies jutting into the sky. The village-owned stadium is not only home to the Chicago Fire, but also hosts major music shows.

And since opening in 2006, it has come up millions of dollars short of making its huge debt payments. The yearly shortfalls are sometimes as big as the town’s annual police budget, and they’ve helped sink the southwest suburb’s credit rating to among the Chicago area’s worst.

This for a deal that — initially, at least — looked like it might actually work out for the town of Bridgeview, since taxpayers’ $100 million in stadium bonds were supposed to be paid off by stadium revenues. Except that, according to the Tribune, “the final deal called for much of the revenue from soccer games to go to the Chicago Fire, leaving Bridgeview with as much as a $23 million budget hole over the stadium’s first five years — one that could ultimately have to be filled by raising property taxes.

This is why it’s so vitally important who’s on the hook for stadium costs if revenue projections don’t work out — and why it’s crucial in Seattle that prospective arena builder Chris Hansen is actually agreeing to increase rent payments to cover any shortfall in arena revenues.

Bridgeview, though, didn’t get the Fire owners to agree to such a provision, so now they’re getting, well, kicked in the teeth. Not so much, though, the Bridgeview elected officials who approved the deal, who’ve gotten to hand out millions of dollars worth of contracts to favored businesses, as well as use the stadium for fundraisers and enjoy a city-owned luxury suite for watching Jimmy Buffett concerts. If “enjoy” is the right word, that is.