In their effort to persuade politicians and the public that government support for a new domed stadium development on the city’s lakefront would be a sound investment, the Chicago Bears repeatedly tried to stress that taxpayers would not carry an overwhelming weight of the costs.
Team officials said during their public unveiling Wednesday the Bears would pledge $2.3 billion in private money while asking the state agency charged with stadium development projects to borrow less than half of that — $900 million — to build a long-sought, year-round indoor replacement for century-old Soldier Field.
But a deeper look at the financial details of the Bears’ full plans shows the costs, especially over the long term, are drastically higher.
In addition to the $900 million in borrowing, the Bears want the state’s stadium agency, the Illinois Sports Facilities Authority, to refinance about $430 million in existing debt for previous projects and take out about $160 million more to set up as a so-called liquidity fund to cushion the city of Chicago from future shortfalls in revenue from a 2% city hotel tax that’s supposed to cover the cost of the borrowing.
Counting interest and other long-term costs, the proposed new borrowing would tally up to at least $4.8 billion over four decades, said Frank Bilecki, ISFA’s CEO.
In addition, the Bears are seeking up to $1.5 billion in infrastructure money, not counting the debt the public will incur, that the team says would be needed to fully realize its vision for a year-round venue and surrounding park space that Mayor Brandon Johnson said Wednesday would be “the crown jewel of the city of Chicago.”
The bill could even go up even more if the agency borrows additional money for the football stadium or other projects, such as a new White Sox or Red Stars stadium.
Although some costs would be offset by interest earned on the money parked in the liquidity fund, according to a financial expert familiar with the team’s plans who spoke on condition of anonymity to discuss the proposal in detail, the total price tag of the proposed borrowing is just one of many issues the Bears must tackle. They have pledged overt transparency along the way.
While Johnson has embraced the Bears’ vision, Gov. J.B. Pritzker and other state leaders — who must approve the borrowing plan at ISFA and, potentially, infrastructure dollars to make the team’s lakefront vision a reality — have been openly skeptical.
Pritzker, who for years has expressed wariness about using public funds to help build stadiums for professional sports franchises, on Friday reiterated that his door is not closed but that he must be convinced any use of taxpayer dollars reaps sufficient public benefits.
“I’m a Bears fan, and I want to see a domed stadium in the city of Chicago,” the governor said at an unrelated event. “But again, the question is, ‘Who’s paying for that?’
“And it seems to me that the team owner who benefits most ought to be the principal provider of the capital, and when I say principal, I mean the vast majority of it. And the taxpayers — to the extent that they’re putting anything up here — should be getting return on the investment that they’re making.”
The Bears answer to that question so far has been a projection that a new domed stadium would generate 37% more in local taxes than Soldier Field currently produces while delivering well-paying construction and permanent jobs. The city, county and state would annually net $64 million in additional amusement, hotel, income and sales taxes from the new stadium, they estimate.
But economists generally look askance at sports franchise claims that spending public dollars on professional sports stadiums is a good investment of taxpayer resources. Such developments rarely result in enough economic activity to boost per capita income, long-term jobs or sufficient tax revenue to recoup the cost of the subsidy, studies have found.
“From the city’s point of view, this would be one of the worst decisions they could make,” said Allen Sanderson, an economics professor at the University of Chicago and noted stadium skeptic.
Spending public money on the project would be akin to the team having used its No. 1 pick in Thursday’s NFL draft not on USC quarterback Caleb Williams but “to draft Brandon Johnson,” Sanderson said.
The grand vision for the new Bears stadium involves several moving pieces: the demolition of Soldier Field except for the historic colonnades and the stadium’s south-end horseshoe, construction of a new stadium hundreds of yards away to the south, and improvements to the surrounding public land that is part of the Museum Campus.
Though taxpayers, in one form or another, are slated to foot a substantial part of the bill, the Bears argue they are making one of the biggest investments in city history by investing $2 billion in equity and debt from the McCaskey family as well as a $300 million NFL loan.
The team has not yet finalized plans for naming rights or the sale of personal seat licenses. Both could be used, along with other revenue streams, to help cover a portion of its stadium costs.
The Bears’ $1.5 billion infrastructure wish list would be rolled out in three phases over five years, according to the plan.
The $325 million first phase — which Bears officials said was necessary to open the new stadium’s doors — involves moving utilities and roadways with the goal of reducing the bottleneck drivers currently sit through at McFetridge Drive.
The next two phases — costing an estimated $510 million and $665 million, respectively — include demolishing the old stadium, adding parking and expanding a bus depot, as well as building new parks and playfields. Phase three includes restoring the century-old colonnades, retail space and a possible hotel.
The latter two phases represent the bulk of public benefit Johnson and Bears President Kevin Warren highlighted during Wednesday’s presentation — athletic fields for Chicago Public Schools sports teams to use, field house facilities, and year-round amenities that would ultimately increase the current green space by nearly 20%. Johnson described the “miraculous” renderings as a fulfillment of Daniel Burnham’s vision for the city’s lakefront.
But the public funding for those infrastructure changes was unclear. Officials said they hoped to tap federal Inflation Reduction Act and Bipartisan Infrastructure Act funding, including dollars set aside specifically for green infrastructure. The city is responsible for finding that money.
“We really look for the city to work with the state on that and what programs are available,” Bears Chief Operating Officer Karen Murphy said Wednesday.
The stadium refresh would require again tapping ISFA, which has so far paid $549.5 million for the 2001 “spaceship” renovation of Soldier Field. That tally is on track to hit $1.1 billion by 2032 under the current debt schedule.
Currently, ISFA pays down the debt with state hotel tax revenues, which are later replenished with funds from an additional 2% tax on city hotel stays. There also is a static $5 million annual payment each from the city and state.
When all ISFA bonds for Soldier Field and the White Sox stadium are paid off, the revenue from the 2% tax will be used to repay the city for what has been swept from its share of state income tax revenue to cover hotel tax shortfalls. Once that is repaid, the revenue would begin flowing to McCormick Place.
Under the Bears’ proposal, however, the 2% city tax would be used to continue paying stadium-related debt for another 40 years.
The 40-year term is unprecedented for state borrowing and suggests there is more debt than an ability to repay it under a more typical timeline, said Matt Fabian of Municipal Market Analytics, an independent research firm.
“That’s a very long time for an asset that typically doesn’t last 40 years. It’s one thing for Washington, D.C., to sell century-long bonds for their sewer system, because that’s going to last. But a stadium — to tie up taxpayer dollars for 40 years is a massive bet on this being a good idea,” he said.
The economic returns on a stadium have proven to be scant compared with other economic development measures like housing or transit improvement, Fabian said. The city and state would be better off saving taxpayer dollars to fund more urgent projects like infrastructure that protects against climate change.
“You shouldn’t be using up your borrowing capacity spuriously right now,” he said, suggesting the city focus on keeping “the lake out of downtown.”
However, the financial expert familiar with the team’s plans said 40-year financing has become relatively standard for large stadium projects.
Backers argue the taxpayer brunt is largely borne by visitors to Chicago, rather than residents. But when hotel tax revenues fall short of the required payment, the city has to make up the difference with its share of state income taxes.
That’s happened twice in recent years thanks to cratering hotel stays during the COVID-19 pandemic. Hotel tax revenues fell $27.3 million short in 2022 and $8.7 million the following year. That money was automatically withdrawn by the state from Chicago’s cut of state income taxes that goes to local governments. Those funds could have otherwise gone to filling gaps in the city’s budget.
That could become a more frequent occurrence as payments ramp up over the remaining life of the bonds.
The $160 million liquidity fund idea is aimed to address the use of city funds to make up the difference when hotel taxes don’t cover ISFA’s payments.
Creating that fund would add to ISFA’s debt while insulating Chicago. While the city would still be the guarantor of the debt if the liquidity fund is insufficient, the extra coverage would likely stave off several years of shortfalls. It would be set aside immediately from the initial proceeds of any bond sale to fund the project.
Setting aside reserves from a debt issuance is somewhat standard practice, said Ashlee Gabrysch of Fitch Ratings.
However, “this is, I think, slightly different than that, in that it’s anticipating an event that has actually occurred in the past, where the revenues were not sufficient to cover debt service,” Gabrysch said.
While a potential boon to the city’s immediate budget needs, creating such a fund is deficit borrowing, or the equivalent of using a credit card for groceries, Fabian said.
The plans also call for refinancing $430 million in outstanding debt for both Soldier Field and Sox Park. That could represent a repeat of the city’s and state’s histories with so-called scoop-and-toss borrowing — heaping old debt onto future generations.
After last week’s announcement, Pritzker told reporters that “there are aspects of this that are probably nonstarters.”
He didn’t answer directly when asked the next day whether the proposed liquidity fund was one of those aspects.
“The deal that was presented didn’t take into account that taxpayers really aren’t going to do well under that proposal,” Pritzker said.
Another outstanding question is whether hotel tax revenue will grow at a rate fast enough to support the proposed borrowing.
The Bears and Chicago CFO Jill Jaworski said Wednesday their bonding calculations rely on more conservative hotel tax revenue projections: an annual increase of about 4% or 4.5% compared with the 5.6% growth assumption in previous ISFA bonds sales.
While the financial expert familiar with the team’s plans said revenue from the dedicated city hotel tax grew at an annual rate of 4.6% from 1994 to 2023, Fitch’s Gabrysch said the Bears’ assumed growth rate could be overly rosy.
When it comes to business-related levies like the hotel tax, “we look at closer to a 2%” annual growth rate, she said.
Another wrinkle: In an interview Wednesday with the Chicago Tribune Editorial Board, Warren also suggested the team hasn’t “given up” on construction of a hotel, which would be included in phase three, arguing it “would be sold out constantly” given the hoped-for events at the new stadium.
He suggested it would be publicly owned.
“We already have history and tradition,” in the Metropolitan Pier and Exposition Authority’s ownership of the Hyatt Regency at McCormick Place and the Marriott Marquis Chicago. “We know it works, if you check their occupancy and profitability,” Warren said. If lawmakers “like it, we love it.”
A stadium-based sportsbook is not in the cards at the moment, Murphy said, though the team “would be open to talking about it in the future.”
Though the Chicago Park District would remain the team’s landlord, it’s still undecided how much of a cut the district would receive from new events at the stadium, like concerts, NCAA Final Four matchups or a Super Bowl.
Park District revenue from Soldier Field includes Bears games — which brought in $7 million in 2023 — non-Bears events like concerts, nonevent parking and an annual subsidy from ISFA. In 2024, gross revenues are budgeted at $53.9 million — about 9% of all park revenues — against $35.3 million in gross expenses.
After Pritzker publicly said the team is “asking to keep all the revenue from other events that might take place at this stadium,” citing Beyoncé concerts as an example, the Bears issued a statement saying negotiations are ongoing.
“The Chicago Bears, the city of Chicago and all interested parties will need to work together so that we can achieve a mutually beneficial agreement for operating the new stadium and cultural and recreation campus,” the team’s statement said.
