Nothing has been finalized, and we’ve little more to go on right now other than Mayor Rahm Emanuel’s statement that the Chicago Cubs and the city were in the “final stages” of working out a plan that would pave the way for a Wrigley Field renovation. But a couple reports suggest that, indeed, the plans of a private/public partnership on Wrigley are underway, and could be announced soon.
If there is an agreement [between the city and the Cubs], sources said it’s likely to include a variation of the financing scheme that Emanuel once called a “non-starter”: the city forfeiting 35 years’ worth of amusement-tax growth from the Cubs.
But there’s a new wrinkle: The Cubs have agreed to a minimum guaranteed payment to the city that would increase every year — an attractive proposition after amusement-tax revenues plunged in 2011 along with attendance at Cubs games.
And if amusement-tax growth exceeds the amount needed to retire stadium bonds, the city would get a share of that money.
“That protects against the downside,” a source familiar with the plan said. “The city and county will be able to budget for at least that amount, regardless of what happens to attendance.”
The Cubs would also outlay some of the cash needed for the project, which could change the team’s plans for the Triangle Building. If the Cubs had their druthers, the city would fund the Wrigley renovation piece, and the Cubs would fund the Triangle Building project (made to their specifications). If a compromise is struck, it could lead to both projects being in one pot, with money come both from the Cubs and the city. In that instance, the Triangle Building project would have to conform to some of the city’s desires (less included parking, for example, as well as more year-round amenities, rather than Cubs-specific amenities).
A report from Crain’s is similar:
Insiders who would know say what’s under discussion is similar to what has been considered for a while: a roughly $300 million to $500 million project to rebuild the aging ball field and perhaps to fund construction of a new multiuse structure immediately to Wrigley’s west.
The Cubs ownership group headed by Tom Ricketts reportedly would pay more than half of the cost of the reconstruction, with the city chipping in some proceeds from its amusement tax, plus perhaps some other innovative financing.
Among other financing options that insiders say have been discussed: imposing some kind of extra game-day sales tax or hotel tax surcharge in the Wrigley Field area to funnel Cubs-generated revenue back to the field. That could be quite controversial among Lakeview-area politicians.
The amusement tax subsidy would work much like a tax-increment financing district. Proceeds beyond a certain specified level would go not into city coffers, but to pay off construction bonds — perhaps with a guarantee from the team that a minimum amount would be collected every year.
Crain’s goes on to suggest one reason for the renewed discussions isn’t terribly altruistic:
One source close to the matter said the recent talks had been jump-started both by Mr. Emanuel’s heavy focus in his first year in office on economic development and by the fact that Wrigley actually generated less amusement tax for the city last year than it had in previous years.
That was a sign of a bad baseball season for the Cubs, but arguably also signals that the Wrigley Field cash post needs some plumping if it’s to continue contributing big money to the city treasury.
Perhaps that can put to rest the suggestion that, on the balance, the Chicago Cubs and Wrigley Field don’t offer a significant economic benefit to the city. So, if the city and the Cubs share the renovation financing load, as it appears wil be the case, this could wind up being a rare win-win in the world of public funding for professional sports facilities.
Given the Cubs’ lack of negotiating power (i.e., they can’t credibly threaten to move), getting any portion of the funding from the city/state/county is probably going to be chalked up as a win (not unlike when the Cubs got Chris Volstad for Carlos Zambrano).
Great coverage, Brett. I’m following this closely. As you point out, this has the potential to be a win-win for both the City and the Cubs. Do you know what restrictions the city would place on the Triangle building that would interfere with the Cubs’ design?
Cubs’ Payroll Drops By One-Third: http://www.chicagotribune.com/sports/baseball/cubs/chi-cubs-payroll-drops-by-onethird-20120405,0,2888130.story
Attention, all rabble. Please assemble at Gate A by 1 pm. Torches and pitchforks will be distributed at that time.
Pretty-pretty-funny
“Perhaps that can put to rest the suggestion that, on the balance, the Chicago Cubs and Wrigley Field don’t offer a significant economic benefit to the city.”
Nope. One or two years of depressed tax revenue during a major economic depression that coincides with the Cubs being terrible is incredibly far from providing convincing evidence that Wrigley offers significant economic benefit to the city. Or, rather, it doesn’t come close to offering evidence that a) this benefit has begun to disappear; b) this disappearance is related to the state of Wrigley Field and/or the lack of a Triangle Building; c) this problem can be fixed by remodeling the stadium; and d) that the city will reap more benefits in tax revenue by investing in Wrigley Field than by not investing in Wrigley Field.
There is almost no way that public money will be well spent investing in Wrigley. There is a minuscule chance that this investment will return benefits for the city, and a 100% chance that it will greatly benefit the already super-rich Rickets family.
That doesn’t really align with the suggestion in the Crain’s article. It is suggesting that *because* of the “depressed tax revenue during a major economic depression that coincides with the Cubs being terrible,” the city realized how sensitive it was to that revenue, and how necessary it is.
Otherwise, why would the city (as opposed to the Cubs) be the one jumpstarting discussions?
So you spend 300 million because you made one million less last year? How is that possibly a benefit for the city? The reason the lower amusement tax collection is mentioned is that under Ricketts’ original scheme they wouldn’t have had to repay one single cent last lear. Which is why that part needs to be addressed.
As for taking the amount of money spent at Wrigley and assuming it otherwise would not have been spent is, quite frankly, idiotic. People have disposable income. If it doesn’t go to a Cubs game it goes to a restaurant, theater, or appliance store. It doesn’t disappear. As to tourist dollars, that’s negligable at best. Let’s say 100 million is spent by tourists going to Cubs games in a given year. 20 million on tickets and the other 80 million in lodging, food, souveniers, other tourism etc. The city would get just over two million on the tickets, and just under one million (city tax) on the other stuff. Who can justify spending 300 million to make 3 million?
You’re going further than I am, and I’m not saying you’re wrong (I’m open to being convinced). I’m saying only that the fact that the city came back to the table – not the Cubs, the city – suggests that they see a financial advantage here. That’s all.
As for the substance of your point, I don’t know the numbers, and I’m guessing from your “let’s say” that you don’t know either. I remain open to being convinced one way or another, but I’m doubtful that we’ll ever fully know the financial picture.
To me it simply suggests that Tommy and Co. wrote a nice big check to the mayor’s re-election fund. Of course, I’m more cynical than most, but when it comes to Illinois politics that means I’m right more often than not.
As to the numbers, that’s the thing, no one can nail it down because it’s all just speculation. You don’t have to fill out a form to buy tickets saying where you’re from, why you are there, etc. One can make educated guesses though. And there is not set of numbers (short of attendance somehow doubling) that makes this a winner for the city.
I have no interest in having my property or income taxes jacked again because one millionaire wants to do a favor for another millionaire.
Now, time for some baseball
No, that wouldn’t make sense, obviously–but we don’t know the final form this deal will take either. They may not be not talking about “spending” $300 million either–one earlier article mentioned a tax credit from the state, and another possibility mentioned in an earlier article was the state taking over Wrigley and leasing it back to the Cubs–much like what happened with the sox. Another benefit to the city is the hedge against declining revenues provided by escalating payments from the Cubs. I don’t know the benefits either–but the article clearly states that the city restarted talks so they must believe there is a benefit.
Although I agree that 1) you may have some valid points (most likely b and c), and 2) the Ricketts family stands to gain quite a bit, I have to go with Brett on this one–the article does imply that the reason the city is more interested in getting this done is, at least in part, motivated by the loss of tax revenue from the Cubs and Wrigley. In addition, the fact that Wrigley is something like the third largest tourist attraction in the state shows that there is more than a miniscule chance the city will gain.
That third largest tourist attraction bit is overblown. It is based on total attendance, not the actual part of attendance that is actually, you know, tourists. According to Crain’s 2008 list it would be number 3 or 4 in the city (not the state), but that’s assuming everyone that attends is a tourist, which is of course not the case.
http://www.chicagobusiness.com/apps/pbcs.dll/article?AID=99992351
That could very well be true, Pat–I won’t argue. Of course part of it depends on the definition of “tourist”–whether the person attending a game is from out of town or the suburbs makes little difference if he would not have spent that money in the city. I, for example, live near O’Hare–but if I go to a game at Wrigley and spend my money there, rather than watch the game at home and spend nothing–well, the result is the same whether it’s me or a visitor making a day trip from Rockford. As I said, I don’t know what the benefit may or may not be, but I’m only saying the same thing Brett was pointing out, the fact that the city restarted talks shows that they must think there’s a benefit, whatever that benefit may be.
i know i am in the minority but if we just blew it up and moved, all problems would be solved, wouldn’t they?
Except for the problem of preserving a significant piece of the Cubs’ and the City of Chicago’s history. Like it or not, Wrigley Field is a historical landmark. It will not be blown up anymore than the Water Tower on Michigan Avenue will.
It has landmark status, so blowing it up would violate more laws than usual….
True, but the state gets no additional benefit by you spending your money in the city as opposed to the suburbs. Neither does the county. The city will make about 1 percent of the total you spend in taxes (the rest is state and county). This is the part most overlooked (purposely not mentioned) in these economic studies. plus the amusement tax, so assuming you spend an equal amount on tickets and other stuff, that’s about 6.5 percent.
I’ve spent my entire life around politics, particularly Illinois politics. You can’t assume that since something is being proposed it is somehow financially beneficial. In fact, given that the state is in essentially the same shape as Greece, you would be correct way more often if you assumed the opposite to be true.
Makes sense. I’d imagine you can assume it’s financially beneficial–you just can’t assume to whom! Take care, Pat–enjoyed the discussion.
Excellent point Frank, yes, it is financially beneficial to someone, just not the taxpayer.
The stadium needs work and Rahm better pay! Us fans have paid our dues and taxes!
[...] both within the Chicago Cubs’ organization and in the Mayor’s Office. At last check, Mayor Rahm Emanuel was on board with a plan that would net some of the funding from public dollars, … (though Illinois Governor Pat Quinn isn’t happy about it), but any public-funding plan in [...]