Bears put lakefront stadium cards on the table with state agency key to funding deal

The Bears held their first meeting this week with the state agency they need to help bankroll a new domed stadium on the lakefront.

Frank Bilecki, executive director of the Illinois Sports Facilities Authority, said Bears president Kevin Warren is eyeing the same portion of city’s hotel tax that the White Sox hope to use to build a new, $1.5 billion stadium in the South Loop.

With the spring legislative session entering a critical juncture, the Bears and Sox have intensified negotiations in an attempt to hammer out a joint financing package that divvies up the bonding capacity and plugs funding gaps.

No increase is contemplated in a tax on Chicago hotel rooms that is already among the highest in the nation, Bilecki said.

“Both teams appear to understand that the continuation of the 2% hotel tax is unlikely to pay for two new stadiums and pay off the legacy [outstanding] stadium debt,” Bilecki told the Sun-Times.

“Which, I assume, is part of the ongoing discussion between the teams. That’s up to them to try and figure out. ... It’s the million-dollar question. We’ve got to wait to see what they propose.”

White Sox spokespman Scott Reifert said the Sox “are in conversations with the Bears” and “the questions you’re asking” about funding gaps are “the questions everybody’s working on” resolving.

Bilecki described his late Tuesday meeting with Warren and Karen Murphy, executive vice president of stadium development and chief operating officer for the Bears, as “introductory.”

The Bears reiterated their commitment to invest more than $2 billion in private money in a domed lakefront stadium south of Soldier Field. Bilecki said he was shown renderings of the exterior and interior of the stadium.

“There was a potential hotel, but not a specific location for the hotel,” Bilecki said. “There were playing fields for other sports and activities in the area where Soldier Field is now. ... Restaurants and bars were also mentioned, depending on financing. There was a Hall of Fame area as well. Transportation improvements at a high level were discussed. And the McCormick Place busway was mentioned as an opportunity to alleviate congestion.”

Experts have pegged the cost of a domed lakefront stadium in Chicago at anywhere from $2.5 billion to $3 billion. Warren has refused to say where the additional construction costs would come from.

Nor has he said who would be asked to pay the formidable cost of demolishing everything but the historic colonnades and war memorial at Soldier Field, and how the $1 billion-plus in infrastructure improvements he envisions would be financed. That includes a pedestrian bridge to Northerly Island, and expanding or moving exit ramps off DuSable Lake Shore Drive.

Tarrah Cooper, a spokesperson for the Bears, issued a comment that said, in part, that “we look forward to sharing more information when our plans are finalized.” Curt Bailey, president of developer Related Midwest, the Sox partner at the South Loop parcel known as “the 78,” refused to comment on his talks with the Bears.

Bonds used to pay for the 2003 Soldier Field renovation were issued by the Illinois Sports Facilities Authority and backed by a 2-percentage-point increase in the hotel tax — which both teams now hope to use to bankroll new stadiums.

Those Soldier Field bonds also have balloon payments at the end, the result of modifications that salvaged the deal after the Sept. 11 terrorist attacks caused a drop in tourism and, therefore, a decline in hotel tax revenue. With the balloon, those payments go from $56.7 million this year to $90.5 million in 2032 the year those bonds would be retired.

Another $50 million in outstanding stadium authority bonds were used to fund Guaranteed Rate Field renovations. Those bonds won’t be retired until 2029, when the baseball team’s lease expires.

The Sox financing plan for the South Loop parcel calls for all $589.1 million — including $375 million in principal and $214 million in interest — to be paid off by a 35-to-40-year extension of IFSA bonds, also backed by the hotel tax.

The Sox also hope to create a “sales tax overlay district” that would require the city, state and count to forfeit a portion of sales tax revenue generated within the boundaries of the 78. That revenue would primarily serve as a backup to guarantee that bond holders are “taken care of when there are outlier events like COVID or 9/11” that cause hotel tax revenues to plummet,” Bailey told the Sun-Times last month.

Whenever hotel tax revenue fails to grow at 5.5% a year, Chicago taxpayers must make up the difference. That’s happened three times, and twice in the last three years. The biggest deficit was $27.3 million in 2022.

Mayor Brandon Johnson has cracked the door open for a potential public subsidy to build a lakefront stadium for the Bears just as he has for the Sox. Voters elsewhere have rejected public assistance for stadiums, even those involving successful franchises.

Earlier this week, voters in the Kansas City area rejected a sales tax increase to help fund a new downtown baseball stadium for the Kansas City Royals and renovations to the home stadium of the back-to-back Super Bowl champion Kansas City Chiefs.