A bunch more info came out yesterday surrounding the Chicago Bears‘ purchase of the Arlington Park raceway property for a potential new stadium complex:
- The sale price for the 326-acre site, according to racetrack owners Churchill Downs, is $197.2 million, and the deal is set to close “in late 2022 or early 2023,” according to the Chicago Tribune. Bears President and CEO Ted Phillips declared, “Much work remains to be completed, including working closely with the Village of Arlington Heights and surrounding communities, before we can close on this transaction,” and Arlington Heights mayor Tom Hayes said, “There is a long way to go as we begin this journey, and many issues for the community to discuss” — whether that means public financing or tax breaks or just things like zoning approvals, we’ll have to wait and see.
- Chicago mayor Lori Lightfoot, mentioning the high cost of NFL stadiums and COVID-related fiscal issues, said, “We’ve got to be smart about how we spend taxpayers’ dollars and I intend to do just that. … I would love that the Bears be part of our present and our future. But we’ve got to do a deal that makes sense for us in the context of where we are.” She added that the Bears owners haven’t made any demands as of yet: “I can’t negotiate with myself. They’ve actually got to come to us and tell us what they want.” She also said she believes there’s “still room to do something big and bold” at Soldier Field, and is appointing a task force to see how to improve “the fan experience — whether they’re coming for a Bears game or they’re coming for a concert,” so make of that what you will.
The elephant in the room here remains how an Arlington Park stadium would be paid for: The Tribune notes that based on other recent NFL stadiums, the price tag could be as high as $2 billion or more, and the McCaskey family doesn’t have much wealth other than the Bears team itself, which is worth about $3.5 billion. They can’t sell the team to pay for a stadium, obviously, so the Tribune suggests “it’s possible the Bears would pursue a partnership with a developer to help cover construction costs with revenue shared from other projects on the site,” but a developer would be nuts to pay $2 billion in cash for access to land worth $193 million, so that seems dicey as well.
All in all, we still have “Bears want to get new stadium boost revenue by maybe $100 million a year, threaten to go spend $2 billion to make it happen,” which also doesn’t make much financial sense. It’s possible the numbers will pencil out — especially if Arlington Heights can be talked into kicking back TIFs or something — but between that and what Lightfoot and the McCaskeys discuss, if anything, there are still a whole lot of moving parts left here. We should know more by late 2022 or early 2023!
Prediction: by the time the deal is finalized for Arlington Park, Virginia McCaskey will no longer be with us, and the family will most likely sell the team to pay for estate taxes. Whomever buys the team will be in the vein of a David Tepper or Ricketts family, and the burden of pushing for a new stadium will be on their shoulders. Simply by NOT being part of the McCaskey family, the new owner(s) will have more goodwill to close the deal.
I’d love to see Soldier Field de-renovated, if you will, to mitigate the effects of the spaceship within its boundaries, but my prediction is already teetering on the edge of fantasy as it is.
I’m still trying to wrap my brain around “Ricketts family” and “more goodwill” in the same paragraph.
And you join thousands of ex Cub fans in doing so….
Pat Ryan (net worth $7.2 Billion) is already a minority owner of the team and has the right of first refusal to buy any part of the team that the McCaskey’s might sell.
This was the main story in the Tribune today — front page upper half banner headline. Several stories covering different angles.
Interesting all agree that there will be no state money to the stadium. As a much put upon Illinois and Chicago taxpayer I hope so.
I hope that’s how it plays out too… but whenever I read things like “partner with a developer seeking access to $193m worth of land” and “possible $2Bn cost” I shiver thinking about who is most likely to be asked to cover that perceived gap.
“ ‘Bears want to get new stadium boost revenue by maybe $100 million a year, threaten to go spend $2 billion to make it happen,’ which also doesn’t make much financial sense.”
It certainly does, if it’s someone else’s $2 billion. Taxpayers shouldn’t expect a return on their “investment.” If they do, they’re just being silly.
Hi Neil:
Here’s a prediction on how it may go:
The town approves a master development plan for the old racetrack (sounds like SoFi).
Thousands of residential units, hundreds of thousands of sq ft of commercial space and , say 1000 hotel rooms are then built on the site along with the stadium. (sounds like Howard Terminal)
The town creates a TIF that kicks back property tax increment to build the infrastructure which may already be at least partially in place for the racetrack.
Team sells PSLs, naming rights, gets new revenue streams from parking, on site gambling, etc…
If you have enough revenue streams, I would think you can easily pay off the bonds on a $2 billion stadium. I wonder if the Bills will try something similar in the Buffalo area.
A residential/commercial/hotel developer is going to want the revenues from residential/commercial/hotels to generate their own return on investment. Likewise, if the Bears give up all their PSLs, naming rights, parking, gambling, etc., money to pay off stadium bonds, then what’s the advantage of moving to a new stadium anyway?
I agree that with enough revenue streams, you can pay off any amount of bonds. I just don’t see all that much in the way of excess private revenue accruing to a new stadium development, which leaves mostly TIFs and the like.
I received an email from The Center Square which says that both Pritzker and Lightfoot are against using public money for the Bears. Let’s see if we can hold them to it.
As a thought experiment, if Pritzker decided to build the stadium with his own money, would that run afoul of campaign finance laws? (And yes I know Pritzker has no ownership in the Bears, he is just really, really rich).
The ‘family’ certainly won’t sell the Bears (or a majority stake in them) to fund the stadium.
They absolutely can borrow against the franchise, however (though they may need the NFL’s agreement to do so, depending on how heavily they want to borrow).
Forbes 2021 valuations show the Bears in 7th spot with an estimated franchise value of just over $4Bn (yeah, no, I don’t believe anyone would pay that either) and a debt to value of 3%
So they have about $125m in debt on the books and $370m in annual revenue at their current location.
In order to pay the carrying costs on a new $1.5Bn stadium without impacting the present bottom line they would need to increase revenues by, what, $120m?
I think we all know that if they are paying for it themselves it will look a lot less like SoFi and Jerryworld than it would if someone else was paying.
I’d bet they can build it for less than $1Bn if they make an effort to eliminate things that won’t make them more money on game day. Including the land cost it $1.2Bn… something they can easily borrow against the franchise itself to raise.
If they want to do it they can. Now I guess we just see if they are interested in doing it and whether the NFL will “allow” it.