Now that the dust has begun to settle from yesterday’s Chicago Bears lakefront stadium announcement, let’s see what we can discern about the actual details of the plan. Beyond the handwavy-but-not-laughable vaportecture renderings, what do we actually know about, for example, how much all this would really cost, and who would pay for it and how?
Chicago Bears to seek public funding in $5bn plan for new lakefront stadium
Bears’ $3.2B lakefront stadium plans revealed
Chicago Bears Push Plans Forward for $4.6B Lakefront Stadium
Bears Ask Taxpayers for $2.4B Subsidy to Build $4.75B Domed Stadium Along Lakefront
That’s not a great start, when no two headlines can even agree on what the damn thing will cost. Let’s take a deeper dive and see what actual numbers Bears management provided. Yes, you in the front, Chicago Tribune?
The team proposed spending $2 billion for the stadium, plus $300 million from the NFL and $900 million to be borrowed by the state and paid back with the city’s existing 2% hotel tax…
But the mayor did not specify how the city would pay for $325 million in initial infrastructure costs to open the stadium, or $1.5 billion for an optional full build-out including a hotel.
So that’s $3.2 billion for the stadium proper, plus $325 million in infrastructure and $1.175 billion in “optional” add-ons, for a total of $4.7 billion, of which between $1.225 million and $2.4 billion would come from city funds. Any more details available about that optional full build-out, NBC Sports Chicago?
If the team gets the public funding needed to open the stadium, they said there will be two more phases of development requiring public money: one to maximize infrastructure for the stadium and surrounding campus totaling $510 million, and another phase for “optional infrastructure to enhance the campus, improve circulation, and maximize public economic benefits,” totaling $665 million.
That’s a little better, but still not exactly crystal clear. What does “maximize infrastructure” mean that isn’t the initial $325 million in infrastructure? And what kind of additional “optional” round of infrastructure would maximize public economic benefits so much as to be worth $665 million in taxpayer expense? (The Real Deal reports that that last phase would include “enhancements like new parking and multi-use playfields,” which given that the stadium would be built atop the old parking garage doesn’t seem very optional at all.)
University of Chicago economist Allen Sanderson, it’s so good to see you, what can you tell us?
“If you take one of these estimates of how many jobs will this create, how much economic impact will it produce for an economy, take whatever number the supporters are giving you, move the decimal point one to the left, and you’re pretty close. Which means 90% of it is nonsense.”
Generally a good rule, but still doesn’t shed much light on the actual costs. Maybe somebody has some charts?
Noooo, those aren’t any of the same numbers we saw before! And they don’t include any of the infrastructure! And that little “Financial forecasts subject to change” disclaimer at the bottom isn’t reassuring at all.
Chicago Mayor Brandon Johnson, meanwhile, vowed that there would be “no new taxes” for the Bears stadium project, based on the fact that the first $900 million would come from an existing 2% city hotel tax surcharge that currently goes to the state stadium authority. But that still leaves the other $325 million to $1.5 billion in infrastructure costs, plus spending the hotel tax money on this would mean it couldn’t be used for other stadium authority projects meaning taxes might then have to be raised for those, so surely nobody is taking Johnson’s claims at face value—
Then when I broke out the math for what they actually want in total — $2.3 billion+ — he mocked me for not listening to the Bears press conference in which they clearly said there will be no new taxes.
— Craig Calcaterra (@craigcalcaterra) April 25, 2024
All of this might make one wonder if Bears execs’ intent was to craft the most confusing set of numbers possible — and actually, there’s a decent chance that’s precisely their goal. As we’ve seen before, one of the most powerful weapons in the stadium subsidy demand toolkit is anchoring: trying to make your proposal look good not on its own merits, but in comparison to something else. So if a team owner can create a fog of cost projections — somewhere between $3.2 billion and $4.7 billion, with the team putting up something between 42% and 70% of the total — then it’s easier to argue that this maybe isn’t so bad, especially when the sports team owner across town is only talking about putting in 10-20%.
But all that is just manipulating the denominator: As J.C. Bradbury points out, it doesn’t matter how much taxpayers aren’t being asked to spend toward a Bears stadium, it only matters how much they would be on the hook for. Even at $1.225 billion, this would be one of the largest public subsidies for a private sports stadium in history; if that “optional” infrastructure turns out not to be so optional at all and the true taxpayer price tag is more like $2.4 billion, it would shatter all records. (And all this, mind you, doesn’t account for any additional hidden costs like property tax breaks*, which seem likely given that the stadium would be state-owned even though the Bears would be the ones controlling its use and all its revenues.)
There are still many, many hoops this plan has to jump through, including approval from the state legislature of $1.5 billion in state bonds toward the project (of which part would be repaid by the team and part by the hotel tax, I think, this is all really hard to follow). House Speaker Emanuel “Chris” Welch immediately declared that “if we were to put this issue on the board for a vote right now, it would fail and it would fail miserably,” so that seems like a stumbling block. The parks preservation group Friends of the Parks, which has previously sued to block other development along the lakefront, also fired a warning shot about the Bears proposal, declaring that “as is so often the case in Chicago, the powerful and wealthy are demanding that our entire city stop and fast track their plans to expand operations on the people’s lakefront” and “we have too many questions to make any decision about the value of these plans.”
This is all very exhausting. At the very least, can we have some fresh lens flare for our troubles?
Ahhhh, that’s the stuff. Who can put a price — let alone half a dozen different prices — on that?
*UPDATE: University of Colorado Denver economist Geoffrey Propheter, who literally wrote the book on stadiums and property tax breaks, estimates that if the Bears sign a 40-year lease, the property tax break would amount to $1 billion over time. That would be enough to pay off about $400 million of the Bears’ stadium costs now, if my math is right, so we’re now talking between $1.625 billion and $2.8 billion, barring any additional hidden costs.
UPDATE #2: I got more details from Propheter: The future property tax breaks on the new Bears stadium are actually worth roughly $688 million over 40 years, which comes to about $250 million in present value. So we’re currently at between $1.475 billion and $2.65 billion in public subsidies.