Last December, real estate mogul Sam Zell closed one of the biggest deals of his life–a buyout of the Tribune Company, owner of some of the nation’s largest newspapers and broadcast stations.
Zell is now looking to sell two of the Tribune’s other well-known assets–the Major League Baseball (MLB) Chicago Cubs and their home ballpark, Wrigley Field.
Prominent among the potential bidders for Wrigley Field is the Illinois Sports Facilities Authority, a state agency currently run by former Illinois governor Jim Thompson. The authority’s best-known asset is US Cellular Field, home of the MLB Chicago White Sox.
Could Cost $800 Million
A purchase of Wrigley would require a steep initial outlay. While Forbes magazine has estimated the value of Wrigley Field at $120 million, reports suggest Zell is asking nearly $500 million. With an estimated $300 million to $400 million needed for ballpark repairs, the potential cost to the buyer could go to $800 million.
Though no deal has been reached, the authority has proposed various financing mechanisms.
The latest proposal, in which Thompson insists no tax dollars would be at stake, would involve private financing, with no bonds issued by the state. Thompson has said team lease payments and the sale of partial naming rights would cover the cost of buying the ballpark.
But Thompson has offered virtually no details on what revenues could be used to pay for renovations. He has ruled out selling personal seat licenses to fund the renovation.
As of press time Thompson had not formally presented his plan to Cubs management.
Some sports fans have asked, on newspaper blogs and sports radio programs, why the state should have any involvement, especially if the ballpark’s sale and renovation can be arranged without taxpayer support.
Opposition to Taxpayer Backing
Thompson’s sketchy proposal, announced in late April, follows an earlier proposal that would have had the state issue bonds to pay for Wrigley’s renovation. That proposal drew widespread opposition, including from Chicago Mayor Richard M. Daley.
The bonds would have been repaid using anticipated growth in sales tax revenues in the Wrigleyville neighborhood, supposedly resulting from the ballpark’s renovation.
Daley, many state lawmakers, and policy experts in the state objected to diverting sales tax revenue to renovate a baseball stadium that is currently privately owned and arguably the most popular MLB park in the United States.
Thompson’s original plan was a new twist on tax-increment financing districts, or TIFs, that tap property taxes. The Illinois Sports Facilities Authority called the new scheme a STIF (for Sales Tax Increment Finance).
No Blight in Wrigleyville
In theory, TIF zones are used to promote development in blighted areas, but Wrigleyville by no means falls into that category. The city of Chicago would have taken a financial hit, giving up its share of sales tax revenue growth for the next 30 years.
John Tillman, CEO of the Illinois Policy Institute, pointed out there were fundamental issues at play.
“When you look at this deal with a clear head, you can see that Zell is going to benefit at the expense of the people of Illinois,” Tillman said. “What’s more, there is still a big question of whether or not stadium revamps actually generate the added economic benefits that everyone is touting. Someone will have to pay, and the taxpayers are definitely in the crosshairs.”
The proposed STIF was lambasted by critics and Cubs fans alike, and intense media speculation on the issue took its toll.
Shortly before Thompson announced the authority had dropped its plan to divert sales tax revenues for the stadium, Patty Schuh, spokeswoman for Illinois Senate Minority Leader Frank Watson (R-Greenville), said, “At this point it does appear that it would not be a prudent proposal for the taxpayers of Illinois. Wrigley Field is a functioning, thriving business, and we’re not sure the state should get into that business.”
Liam Rinehart ([email protected]) is a policy associate at the Illinois Policy Institute, a nonpartisan policy research organization.