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June 11, 2012
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.
The gift that keeps on taking - although not the only one.
Allegedly private developers building other types of developments often use many of the same tactics to extract tax concessions or even direct funding of their projects.
No prize for guessing who is on the hook when an overly optimistic council is swayed by a shiny picture of happy, joyous citizens walking around the yet-to-be-built project.
Santa Clara has also been told that stadium construction debt will be paid off with stadium revenues - except that 100% of the NFL revenues will go to the 49ers, and the city's consultant's report shows that non-NFL events will be woefully inadequate. Stadium construction debt on the back of Santa Clara's Stadium Authority will be $950 million, which needs to be paid off (refinanced) at the end of construction.
Yet we have a council majority with a 'don't worry, be happy' attitude and 'No cost to Santa Clarans. No cost to our General Fund. No taxes for the stadium' was their mantra during the stadium campaign.
Santa Clara's debt payments will be much much larger than Bridgeview's (we are a larger city, but we only have 117,000 people, and half of our school children receive free or reduced priced school lunch - i.e. we are not a wealthy community.)
I find it odd that you got so many e-mails when it comes to a soccer stadium. i live in Chicago and saw the article and to be fair all of cook countys taxes have gone up 300% in last 10 years. The Fire were actually doing a partnership with the town but the town insisted on 100% omnership so they wouldnt have to split non soccer revenue. They kind of shot themselves in the foot. The Fire were looking for a 50/50 split with Chicago but were rejected even though the Sox and Bears got sweet heart deals with no skin in the game. Bet you wont get 5 emails on the 300mn the cubs will get and ownership rights to public streets and free police.
Sounds a lot like the poor people in Harrison, NJ.
What's wrong with Harrison, NJ? Last time I checked the city didn't pay for that stadium.
Harrison spent $80m on land and infrastructure for Red Bull Arena. Plus New Jersey is spending about double that to expand the nearby commuter rail station for Red Bull fans (who are the only ones who ever tax the current capacity).
So the city added some infrastructure they'd be required to put around any large business that moved in and bought the land (which they still own). I'm not seeing a remotely comparable situation to say, Bridgeview or worse yet, Glendale. In fact what I see is the same model that is so often praised that was used in San Francisco for Pacific Bell Park.
Harrison spent nearly triple what San Francisco did on Pac Bell Park. Plus the Red Bulls have been stiffing the city on rent and property taxes. So, similar financing structure, different results.
Redbull paid 200mil to build arena, Dont know many baseball teams at any level that built their parks. If Giants did Iam willing to bet they're the only ones in all of MLB. Not counting cubs and redsox who get their subsides other ways. Also I bet the Giants have minor league parks and spring training sites they didnt pay for!
Robert, the Giants only own one of their minor league teams, and they only recently bought into it (the Single A San Jose Giants). Though even if they had owned them longer, San Jose Municipal Stadium was built by the Works Progress Administration in the 1940's and has hosted over a dozen teams at various levels over the last 70 years. Most MLB teams do not own their minor league teams so your argument is largely moot in that regard.
As for MLB teams you forgot the Dodgers.
Interesting. I'm trying to move closer to work, which is in Sandy, Utah; home of an MLS stadium.
Property tax on the place in Sandy is a little less than the place I'm in now. (A different Salt Lake City suburb, with a minor league hockey arena.)
The lesson here, if there is one, is to only let MLS teams build stadiums if you live in a place with notoriously cheap skinflints like Utah.
I did forget the Dodgers. The Giants spring training site is 100% paid by TAX PAYERS!