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October 27, 2011

White Sox getting free restaurant paid for by Illinois taxpayers

U.S. Cellular Field (then New Comiskey Park) opened 20 years ago last April, but it's been the gift that keeps on giving for Chicago White Sox owner Jerry Reinsdorf. First was getting the stadium itself for $167 million in Illinois tax dollars, following Reinsdorf's "a savvy negotiator creates leverage" jaunt to Tampa Bay. Then there was the $41 million renovation in 2004 that was paid for by the state handing over naming rights to the stadium to the team, which sold them for $68 million.

And now there's this:

The Illinois Sports Facilities Authority, the government agency that built and owns The Cell, paid $3.2 million for construction of the [new Bacardi at the Park] restaurant [across the street] plus just about everything inside the place, from walk-in refrigerators to bar stools, the Tribune and WGN-TV found in a joint investigation.
Another $3.7 million from the agency went for infrastructure upgrades for water and sewers at the Gate 5 plaza that made the restaurant possible.
A 2010 agreement between the Sox, who selected Gibsons Restaurant Group to run the business, and the agency shows that at the project's completion, the team was exempt from owing the agency any money. That arrangement contrasts with the management agreement for operating the stadium, which stipulates the team pay rent and make payments based on attendance.

That Chicago Tribune story, incidentally, notes that the White Sox' rent on the stadium has averaged $2.7 million in recent years. Crain's Chicago, however, points out that it's currently less than that: Because the White Sox failed to sell 1.9 million tickets last year, they're exempt from sharing any ticket revenues from the state. (This is actually a pretty terrible lease for the state to have agreed to if they want a winning team, since it creates a strong disincentive for the White Sox to spend money on players in order to sell lots of tickets.)

As for the free $6.9 million restaurant that the state apparently gifted Reinsdorf with, the quote of the day goes to former Gov. Jim Thompson, who initially approved the stadium deal as governor and later ran the stadium authority:

"We said to Jerry, 'Jerry can we have part of the profits?' and he said no," former Gov. Jim Thompson, who was the agency's board chairman when the deal was made, said in an interview. "We said, OK.'
"I've known Jerry for 52 years. He's tough. He's tough."

Helpful hint: Don't send Jim Thompson to go buy a used car for you. Especially not from someone he's been friends with for 52 years.


"Thompson said he views the restaurant as just another type of concession, from which the Sox receive all the revenue inside The Cell. He cites sales tax revenue from the patrons who dine at Bacardi as a way the state is being compensated."

Isn't that tax revenue the state would have gotten anyways if the money was spent elsewhere?

"The city and state provide an annual combined subsidy of $10 million to the agency. The bulk of its budget comes from city hotel tax revenue, which was $30 million in 2010.
Thompson deems the restaurant a success. Because most hotel visitors are from out of state, Thompson argues that Illinois taxpayers really are not footing the bill for the restaurant."

Illinois taxpayers are in fact footing the bill, because that 10 million dollars could go to someother use.

Posted by Kris on October 27, 2011 03:11 PM

anybody surprised?
next time vote for someone who doesn't know jerry, maybe he won't be so "tough" for them,

Posted by Paul W. on October 30, 2011 01:25 AM

Thompson asks if the public can have some of the restaurant's profits. Reinsdorf says "no." Thompson leaves it at that and then says says that Reinsdorf is "tough."

Thompson isn't, though. And he's known Jerry for over half a century. If I were a cynic I'd say that has something to do with Thompson's negotiating stance.

Posted by Alex Bensky on October 31, 2011 10:19 AM

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