I know Jerry Reinsdorf, and I like him, in part because he cares deeply about a lot more than sports, which may explain why he was a generous contributor to the Better Government Association’s anti-corruption efforts when I headed the organization a few years ago.
And because, as a loyal fan of the two Chicago sports teams he mostly owns — the Bulls and White Sox — I appreciate the tidbits of inside information I glean from our periodic email conversations about the ups and downs of said teams.
As a result, I don’t share the vituperative sentiments rabid fans loudly voice about owners of under-performing franchises.
But I do have strong feelings about Jerry’s plan for financing a new stadium on open land in the South Loop, anchoring a potentially transformational island of undeveloped space south of Roosevelt Road called The 78 — the city’s unofficial 78th neighborhood.
And sorry, Jerry — you probably won’t like my point of view.
Funding for the stadium, in Jerry’s shrewd, risk-averse business mind, would mirror the vehicle that helped build Soldier Field for the Bears and the current White Sox stadium at 35th and Shields in Bridgeport, now called Guaranteed Rate Field: Revenue from the city’s hotel-motel tax and the Illinois Sports Facilities Authority’s bonding power to raise the estimated $1 billion price tag for new stadium construction.
And to pay off the bonds? Leave it to Jerry — the guy who got the current White Sox stadium built on the taxpayer’s dime by threatening to move the team to Florida —to float another franchise-friendly idea: Create a new taxing district in the housing and entertainment area envisioned for the land around the new stadium, and use the “guesstimated” $400 million in new tax revenue to help retire the bonds.
All public, no private dollars
In other words, all public and no private dollars, and that’s the rub: $400 million in new tax revenue that wouldn’t be available for other pressing needs like education, health care, law enforcement, homelessness, social services and neighborhood development.
That, in my mind, is a deal-breaker, a non-starter, and here’s why:
Jerry and his investment team bought the White Sox in 1981 for $18 million. The franchise is now worth at least $2 billion, a hundred-plus times more. Not a bad return on investment.
So instead of begging again for public financing of a private, profit-making entertainment venue, how about Jerry and his co-owners borrowing against half or so of the White Sox franchise value — say $1 billion — then repaying the loan and eventually refilling their coffers with revenues from the new stadium and the surrounding taxing district, minus the $400 million, which can be spent in more important ways.
In short, Jerry and his White Sox investors assume the upfront and downstream risks, not the taxpayers, and eventually reap most of the potential profits.
That’s similar to the self-financing model Tom Ricketts and his family relied on when the city rejected a taxpayer subsidy for Wrigley Field renovation. The Ricketts family invested millions more of their own money on surrounding enhancements.
The result has apparently been an economic success, and it feels like the right model for the White Sox and the other local sports franchise angling for beaucoup tax dollars: the McCaskey family’s Bears.
I see self-financing as a win-win for taxpayers and fans, even if it’s unpopular with the owners and investors in sports franchises with big appetites for public subsidies.
And win-win literally, not figuratively, would also be a refreshing change for sports teams that haven’t done enough of either lately.
Andy Shaw covered politics and government for ABC 7, led the Better Government Association, and now sits on nonprofit reform boards.
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