Last September, when the Chicago city council voted to approve a new Fire soccer stadium at the downtown The 78 site that had previously been considered for a White Sox stadium, I reported that “Fire owner Joe Mansueto says he’ll build [it] with his own money, so there should be no public funding involved” but also that “some details still need to be ironed out” so “maybe it’s best to say there probably won’t be any public funding involved, fingers crossed, knock wood.”
Ten months later, how’s that going?
Chicago officials plan to redirect $287 million of West Loop property tax revenue for infrastructure surrounding Chicago Fire FC’s new stadium at the 78, a shift poised to help jumpstart the South Loop megaproject and reduce risk for developer Related Midwest.
But wait, you may ask if you’ve been paying way too close attention to this story, isn’t The 78 already in a TIF district where any rise in property tax receipts is kicked back to pay for “infrastructure” development? Ah, but that TIF district only has enough projected property tax revenue to pay for part of the infrastructure; this would be money from a different TIF district, the Canal/Congress TIF District nearby, which would be diverted to the Roosevelt/Clart TIF District that the Fire stadium would be built in. This, writes Crain’s Chicago Business with a bit too narrow a focus on the last word in its name, “likely makes it easier for Related to finance the project’s $425 million infrastructure bill at a time when many institutional investors and lenders are avoiding the city,” which it certainly would. it would also leave the Canal/Congress district with $287 million less money, and what that district using its property tax receipts for, anyway?
“What gives me concern is the plan to raid the Canal/Congress TIF in order to pay for it,” [alderman Bill] Conway said, arguing the move will leave the city without TIF resources for maintenance of Union Station, Ogilvie Transportation Center and a Greyhound bus station the city is buying. “It seems like it will have a significant negative impact on public transit in the city.”
(Why, yes, Conway’s district includes the Canal/Congress TIF area but not The 78, why do you ask?)
The city council finance committee already voted 30-1 to approve the TIF shift on Monday, with the full council set to vote today. If it approves the deal, Mansueto would still technically be building the $750 million stadium with his own money. He would, however, be getting $425 million worth of other free stuff: $216 million for “public structures, plazas, and open space”; $105 million for “road infrastructure”; and the rest for things like upgrades to the wall holding back the Chicago River and improvements to the site’s Metra commuter rail connection.
The total price tag for everything that the city of Chicago will be building for The 78 developers via kicked-back property taxes still remains about the same — $700 million for the whole site — so this is less an increased taxpayer cost than the city running short on the originally planned source of funds and having to find other pockets to dip into, a la everything that’s going on in Cleveland. Not sure if that makes it better or worse, but raiding funds that could otherwise go to upkeep of the city’s train and bus stations so that a billionaire soccer team owner and his $70 billion real estate developer partner can “reduce risk” sure doesn’t sound great, unless you’re a member of the billionaire class.
Stephen Ross, owner of the Miami Dolphins, is the founder of Related Companies and currently owns a controlling 60% stake in the company. Related Midwest operates as the Chicago-based arm of the business.
Does money have no meaning anymore? Asking for a friend.
This is getting complicated. I need an animated diagram.
$700 million for a (nother) Chicago Fire stadium, huh?
That’s almost like real money… hopefully Conway will chat with the good folks in Bridgeview to learn how their stadium experience worked out.
How much of that $425 million would not be there if “The 78” was being built without the stadium?
What do you mean by “would not be there”? There in TIF revenue, there for the developer, something else?
What I mean is that The 78 was going to be developed with or without a stadium. It’s a $7 billion development spanning 62 acres. The stadium is only a part of that. There are supposed to be 10K housing units there, too. So if the stadium wasn’t going to be part of it, much of the public costs would still be there. So it’s not really a $425 million subsidy for the stadium, the $425 million is for the entire development. The stadium subsidy would only be the difference between $425 million and whatever it would be without the stadium.
That’s why it says “soccer stadium development” right there in the headline.
Yeah, but the soccer stadium is only a small part of what is going to go there, and it’s not as though the site would continue to sit empty if there were no sports stadium venue going there. They were going to build residential, office, and commercial. It just so happens that part of the commercial will be a soccer stadium. If you have 10K residential units, you’re probably going to need the roads for those people to go to work every day.
Related isn’t spending $7 billion on a neighborhood built around 17 home MLS games. So calling it a “soccer stadium development” is a bit misleading. It’s more of a development that happens to have a soccer stadium in it.
Anyway, we don’t know how much of this would still be needed (if we can say it’s “needed” now) without a stadium. With a stadium is how it’s been proposed, so it’s unknown if they could skip some of the expanded roadway and plazas and such if they weren’t trying to get 20,000 people in and out all at once.
$216 MM for public structures, plazas, and open space
$105 MM for road (LaSalle, 13th, 14th, and 15th) infrastructure
$36 MM for Metra train improvements
$34 MM for river wall improvements
$24 MM for Clark Street improvements
$8 MM for Roosevelt Road improvements
Any developer would ask for most of that if housing/office/retail was being built. The public structure money could probably be dialed back some if a giant parking garage was not being built and some road money could be spared because there wouldn’t need to be accommodations for large crowds (soccer games and concerts). At least housing/office/retail would be used more than 40 days a year.
There is still going to be housing (according to Google 10K units) as well as a “tech campus” of some kind (I don’t know if that’s going to be offices of tech companies or more data centers). Based on that, all the road, river wall, and train improvements would still be there. As would a big portion of the $216 million for public structures, plazas, and open space. How much of that would be dialed back if there were no stadium? I have no idea. Then again, I have no idea how it makes sense to spend $750 million for a 22K-seat soccer stadium. I had no idea MLS had gotten so popular that those types of numbers could pencil out or that a 22K seat venue would cost that much. By comparison, the stadium they used to play in the suburbs cost $100 million to build (20 years ago), and they paid $65 million to get out of that lease to go to Soldier Field.
Their old stadium was a downscale, stripped down venue built in the cheapest industrial district that the owners could find, with zero possibility for any surrounding development to make up for the drab surroundings. As crazy as the $750 million tag for a 22,000-seat stadium sounds, the revenue upside and the eventual payoff of that cost are probably significantly higher than it ever would’ve been in the old digs.
(There’s also the question of why the “premier” soccer franchise in a metro area of some 9+ million people believes 22,000 is the right capacity for a new stadium — but that’s really up to the team and (maybe even more so) MLS itself to answer.)
What became Toyota Park (and now SeatGeek Stadium) was not as spartan as original Crew Stadium, but, you’re right, it was built less than lavishly. (Comfortable, but not cushy. Access was the biggest issue.)
And it was also literally the only realistic suitor left, for a variety of reasons, one of which you hit on.
As for whether 22k is right-sized…well, they always like to talk about ticket scarcity. The reality is if they have a Messi game, they play it at Soldier Field anyway, like other MLS teams do with the bigger stadiums at their disposal.
And it’s only been the last two years that they’ve approached averaging that number.
1) MLS actually HAS gotten more popular, by every metric. That said…
2) I don’t know that these types of things DO pencil out. They do if you can convince someone else to pay for them, I suppose. Which is the whole reason this site exists.
The stadium they used to play in in the suburbs literally opened 20 years ago, and the costs of stadium construction have gone up exponentially across the board in every sport.
My immediate suspicion is that Mansueto must be getting something out of this, even if it’s only the use of land that Related controls at a discounted rate. Which would mean that Related would have to be getting something out of this as well — possibly they figured having a Fire stadium involved would make it easier to shake loose more TIF money?
But I have no inside intel in either area, so that’s total speculation. It could also easily be that Mansueto likes setting money on fire.
I know whenever I set money on fire, I always enjoy it more if it is someone else’s money I am burning. It just doesn’t feel right if it’s your own cash going up in flames.
I actually walked around the site a couple months ago. Whatever they built there, in it’s current state, it’s super inaccessible. This money was always going to be spent correcting that.
As someone who used to live in the western suburbs of Chicago, the ability to take METRA right to the Fire’s stadium would have been sweet.