Long-term fix for Soldier Field bonds needed; taxpayers can’t be on hook when hotel tax revenue falls short, Lightfoot says
“We’ve got to make sure that we’re diversifying our ability to respond to any kind of economic downturn and not constantly putting ourselves in harm’s way because we tied vital services to a single source of revenue,” the mayor told the Sun-Times editorial board.
Mayor Lori Lightfoot said Thursday she’s determined to devise a long-term fix to keep Chicago taxpayers off the hook for payments on Soldier Field renovation bonds whenever hotel tax revenues fall short of the rosy growth rate built into the 2001 financing plan.
For the second straight year, the Illinois Sports Facilities Authority doesn’t have enough money to repay $415 million in outstanding debt, most of it tied to the Soldier Field renovation completed long before the Bears agreed to purchase the shuttered site of Arlington International Racecourse for construction of a new stadium.
The reason for the $29 million shortfall is simple.
Occupancy and room rates at Chicago hotels haven’t come close to pre-pandemic levels and are not expected to fully rebound until 2024, according to Michael Jacobson, president and CEO of the Illinois Hotel & Lodging Association.
The bonds funding the $660 million stadium renovation are paid off with part of the city’s hotel tax — but that financing package also assumed hotel tax revenue would grow 5.5% a year.
When it doesn’t, Chicago taxpayers are supposed to make up the difference.
Not for long, if Lightfoot has her way.
Lightfoot has asked Chief Financial Officer Jennie Huang Bennett to work with the stadium authority to devise a long-term solution so that “we’re not constantly on the brink if the hotel tax falls short,” as the mayor put it.
“We all know now after two years of a significant economic meltdown — particularly when it comes to very sensitive forms of revenue, the hotel tax being one of them — that tying ourselves to a single source of revenue to fund certain important initiatives is going to be a challenge. It’s a wake-up call for all of us,” Lightfoot told the Sun-Times editorial board.
“Obviously, that was put into place long before I became mayor. But given this experience, we’ve got to make sure that we’re diversifying our ability to respond to any kind of economic downturn and not constantly putting ourselves in harm’s way because we tied vital services to a single source of revenue.”
Lightfoot refused to say what a long-term solution would look like or what alternative sources of revenue beyond the hotel tax she would tap.
The mayor would only say that whatever the new financing scheme is, it would not tie her hands when it comes to renovating, expanding or putting a dome over Soldier Field to try to entice the Bears to stay in Chicago.
Also on Thursday, Lightfoot said she was “surprised” Friends of the Parks weighed in so heavily in favor of the plan to put a casino in a renovated Lakeside Center, the oldest and least-used building at McCormick Place.
Opposition from Friends of the Parks ultimately killed Mayor Rahm Emanuel’s plan to let movie mogul George Lucas build a museum on lakefront parkland.
But in a letter this week to supporters and contributors, Friends of the Parks Executive Director Juanita Irizarry said she favors the plan casino magnate Neil Bluhm calls “Rivers Chicago McCormick” because it “returns more than five acres of asphalt parking lots to public parkland” and creates “five more acres of public plaza surrounding the building without expanding” the existing footprint.
Lightfoot “shares their values” of lakefront preservation and reclaiming parkland. After all, the lakefront is Chicago’s calling card. It’s what “distinguishes us from almost every other city in the country,” she said.
But although the arguments made by Friends of the Parks will be taken “into consideration,” the group’s endorsement of Lakeside Center won’t be the “deciding factor” in the casino sweepstakes, the mayor said.
“I want to make sure, after 30 years of futility, that we have a package with a developer that can get the deal done, that isn’t gonna be relying on city money to make it happen. … That’s the primary factor weighing on my mind,” Lightfoot said.
The mayor said she hopes to get a “winning applicant to City Council as early as possible” — late spring or early summer at the latest.
As for the controversy surrounding Bally’s casino proposal and its minority component, “that’s been resolved” by reminding them of the importance of building generational wealth in Black and Brown communities, Lightfoot said.
“We build wealth through making sure that we empower businesses to have a real meaningful seat at the table — not crumbs from that table after somebody else has eaten,” the mayor said.
“I think they got the message.”