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November 11, 2010
Cubs owner demands $200m in tax kickbacks for Wrigley reno
So remember when Chicago Cubs owner Tom Ricketts was promising to stay put at a renovated Wrigley Field for the long term? Apparently that didn't mean he wasn't going to threaten to leave unless he got public money for his renovation plans:
The owner of the Chicago Cubs is asking the state to help finance more than $200 million in renovations at Wrigley Field that will ensure the team stays at the historic ballpark for the next 35 years.
The Ricketts family, which purchased the team last year from Tribune Co. in a deal valued at $845 million, has pledged that the project will not be financed by new taxes or an increase in existing taxes.
The family's plan calls for the Illinois Sports Facilities Authority, which owns U.S. Cellular Field, to float up to $300 million in bonds. The bonds will be paid over 35 years through amusement taxes that Wrigley Field customers already pay.
In 2009, the Cubs paid $16.1 million in amusement taxes to the City of Chicago and Cook County through the 12 percent levy on each ticket, the team said. The city and county will be guaranteed this amount for the duration of the bonds. Growth in amusement taxes beyond $16.1 million — through increased ticket sales or prices — will be redirected to pay the bonds. The family says the incremental growth in the tax will cover the bonds.
The Ricketts plan, announced this afternoon in an email to season ticket holders, is actually a pretty clever twist on tax increment financing, with ticket taxes taking the place of the more usual property or sales taxes that would be kicked back to the team's owner. But it's still a loss of public money — just the same as it would be a loss to your landlord if you told him you wanted to buy a new big-screen TV, and pay for it by him agreeing never to raise your rent again. And as such, it means Ricketts is going back on his vow that he had "no plans" to seek public funds for a Wrigley renovation.
As for whether he'll be successful, that's another story: Gov. Pat Quinn, who'd have to sign any Wrigley funding bill, responded to Ricketts' announcement by saying it was "news to me," and huffing, "They can present anything, I suppose, to the [sports facilities] authority, but I think it'd be important to touch base with the governor before they do." Add in that Illinois is facing a $15 billion budget deficit and that Ricketts doesn't really have any other options for the Cubs — even if you could move them to, say, Portland, they'd lose most of their value outside of the North Side of Chicago — and you'd like to think that bailing out sports teams will be low on the legislative agenda this fall.
Still, crazier things have happened, and it's entirely possible this is just an attempt by Ricketts to get "stadium money for Cubs" on the legislative agenda in hopes that it'll be approved one of these years. Stay tuned.
The problem is that despite Governor Quinn "huffing & puffing" about the Rickett's plan, the people of Illinois know he's Governor Jello - he will wobble on any and all issues like a plate of Jello...This is the guy that after BARELY winning election over his Republican opponent, promptly stated that his win was a "mandate" from the people of Illinois to raise our taxes...Mandate!?? The guy BARELY exceeded 50% of the vote...hardly a mandate...
That said, it would be NO surprise if "suddenly" Quinn found that the TIF-like financing for an "improved" Wrigley Field makes sense for "the people of Illinois." He'll tout job creation for the reconstruction and how the taxpayers will not be on the hook at all...never mind that it is a TIF-like scam that Mayor Daley has been perpetuating in Chicago for years....
Well, it worked in Mesa. Ricketts got the saps here to put up $100MM-plus, for a ballpark that will see about a month of action every year. A couple hundred mil, for a park that will actually be used half the year, doesn't sound so bad in that context. And besides, it's not real money anyway... it's just 'taxpayer money!'
Posted by Dave Boz on November 12, 2010 07:16 PM
My question is: Is it illeagal for a private corporation to recieve taxpayer money?? The chubs own their ballyard. Sox park is owned by the sports facility, Soldier Field is owned by the city. these facilities are owned by the city/state chubs park is owned by the chubs...
Posted by jim wichelecki on November 12, 2010 08:03 PM
Illegal? It's as American as $500 Pentagon hammers!
Posted by Neil deMause on November 12, 2010 11:59 PM
Given the $400 million and $250 million handouts that the Bears and Sox have received (respectively), the Cubs have every right to ask that Wrigley Field amusement tax revenues be used to help pay for a renovation.
Posted by Pudgie on November 13, 2010 01:17 PM
Ooh, does that principle work in other cities, too? My son's soccer team could use a small sliver of the $1.8 billion the Mets and Yankees got.
Posted by Neil deMause on November 13, 2010 06:43 PM
so much for the warm and fuzzy "family" feeling they tried to foist in undercover boss.
Posted by paul w. on November 13, 2010 11:23 PM
@ Neil:
Apples and oranges.
If NYC contributed to soccer fields for a competing (and comparable) soccer little league, then, yes, your league would be entitled to city money.
Your statement that the Cubs' request is "just the same as it would be a loss to your landlord if you told him you wanted to buy a new big-screen TV, and pay for it by him agreeing never to raise your rent again" is flawed.
A correct analogy would be to say that the tenant (the Cubs) feels entitled to a new big-screen TV because the other apartments have been upgraded with new big-screen TVs as a result of those tenants threatening to move to another apartment building. The tenant-in-question has not threatened to leave, but is now asking for a big-screen TV because it has now become standard in each apartment.
Posted by Pudgie on November 15, 2010 10:25 PM
@ Neil:
Apples and oranges.
If NYC contributed to soccer fields for a competing (and comparable) soccer little league, then, yes, your league would be entitled to city money.
Your statement that the Cubs' request is "just the same as it would be a loss to your landlord if you told him you wanted to buy a new big-screen TV, and pay for it by him agreeing never to raise your rent again" is flawed.
A correct analogy would be to say that the tenant (the Cubs) feels entitled to a new big-screen TV because the other apartments have been upgraded with new big-screen TVs as a result of those tenants threatening to move to another apartment building. The tenant-in-question has not threatened to leave, but is now asking for a big-screen TV because it has now become standard in each apartment.
Posted by Pudgie on November 15, 2010 10:25 PM