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A Zell of a Deal

The state's proposed purchase and renovation of Wrigley Field is a corporate handout not even the mayor can swallow.



On December 14 I turned on the radio and heard something I'd never dreamed I'd hear: Mayor Daley blasting a government subsidy to a corporation as unwarranted and shameful. Over the years the mayor's been more than generous as far as city-financed handouts go. But he came down hard on the idea of the state buying Wrigley Field from the Chicago Cubs. Could it be the mayor's had a change of heart?

When Sam Zell put up $8.2 billion to purchase the Tribune Company last year, he made it clear he intended to sell off some parts of the empire for as much as they could fetch. One of the most coveted pieces of the portfolio was the Cubs, which figured to go for as much as $1 billion.

There's one little problem. Cubs fans may view Wrigley Field as sacred ground, but in the eyes of prospective buyers it's something of a white elephant. True, attendance figures have been increasing year after year—in 2007 the ballpark set a single-season record of more than 3,250,000 visitors. But it only holds about 40,000, small potatoes compared to most professional sports stadiums, and it's a city landmark—so you can't add seats or luxury boxes without pissing off preservationists, who can be as pesky as gnats.

Nevertheless, the old Tribune Company planned an ambitious expansion including a parking garage and a mall. Under the new proposal the Illinois Sports Facilities Authority—a state agency formed to subsidize the replacement for Comiskey Park, U.S. Cellular Field—would pick up the tab for those renovations. The Cubs would sell the park to the agency for the nominal sum of $1, and the new owners would sign on to rent the park from the state for at least 30 years. In exchange the Sports Facilities Authority would issue bonds to cover reconstruction costs.

There's some dispute as to who came up with the proposal. Zell told reporters that the governor, a Cubs fan, approached him with the plan, but Blagojevich's staffers say it was Zell who came to the governor. (For what it's worth, former governor James Thompson, chairman of the Sports Facilities Authority, also says it was Zell's idea).

Regardless of whose idea it was, it's clearly a sweet deal for Zell. How do you make a killing by selling a landmark for a buck? Simple: with the state underwriting the cost of updating the park, borrowing at lower rates than a private company could, the baseball team becomes a much wiser investment. The improvements—luxury boxes, added seats, a parking garage (details haven't been worked out yet, Thompson says)—up the ante as well.

In addition, if the state owns Wrigley Field, the new owners won't have to pay property taxes on it. In 2007 the Tribune Company paid $1,151,487 in property taxes on Wrigley. This year the bill will go up to around $1.43 million. At the rate property taxes are soaring, the new owners are looking to save more than $50 million in property taxes over the course of the 30-year lease.

Zell made his fortune in real estate by staying one step ahead of everyone else. In this case, though, he may have made a crucial misstep: he went to Blagojevich before talking to Daley. As anyone who knows anything will tell you, Daley likes to think that every big idea is his own. Had Zell brought the plan to him first, it might be a done deal.

As it is, Daley has several reasons not to like it. Unlike Blagojevich, who grew up on the north side, the mayor's heart is with the Sox. And he has no love for the old Tribune Company. Some there say he's never forgiven the paper for mocking his Soldier Field renovation.

So he blasted the deal: "We can't even get any money for the CTA and they're worried about the Chicago Cubs?" Daley said. "It's hard to believe." Arguing that there was no need for "taxpayers helping out the Cubs," the mayor vowed to oppose any attempt to raise restaurant or hotel taxes, a primary source of funding for Sox Park and Soldier Field.

He's absolutely right. Don't be fooled into thinking that locals wouldn't wind up picking up the price tag for this. That $50 million property tax break alone will have the effect of raising everyone else's taxes. You have to think of all the money available to state and city government—income and property taxes, parking tickets, fees, and taxes on services—as ingredients in a common stew. If part of the hotel tax revenue goes to Wrigley, there's only so much that can be spent on other budget items and, barring drastic cuts, other taxes will be needed to compensate. The public's paying for this deal, no matter how Thompson spins it.

So what do we get for our dollars? I guess you could say we keep the Cubs, though none of the prospective owners has threatened to move the team. Why would they? As the mayor himself pointed out, Wrigley Field is a "gold mine." In the coming months, I suppose we can expect Zell and the new owners to portray the deal as serving some other public good. Look for a report to be issued showing that the 94-year-old ballpark is a health hazard, a tactic the White Sox successfully employed when they were looking for a state handout to help them replace Comiskey Park. Or they might say they need to improve restroom facilities for their fans, which is how the Bears argued, somehow with a straight face, for the Soldier Field makeover.

Say what you will about the old Tribune Company, it never expected the taxpayers to fix up Wrigley Field. These days stadium handouts have practically become entitlements—sort of like the TIF handouts the city uses to reward corporations for moving their headquarters to Chicago.

But now Mayor Daley says the time has come to stop propping up billion-dollar corporations with taxpayers' dollars, that it's shameful to put the benefit of the Cubs ahead of public transportation, public education, public safety, or property tax relief. I made much the same argument when Daley proposed giving $40 million to developers to convert the old downtown post office into a hotel and condos, $50 million to developers to build condos above Union Station, another $40 million to help the Mercantile Exchange merge with the Board of Trade—and so on and so forth.

My sources in the statehouse predict that Daley's opposition will only be temporary. They expect the mayor to swap his support for the Wrigley Field deal in exchange for a Chicago casino and more state funding for the 2016 Olympics. But I remain hopeful: it's never too late to do the right thing. Next thing you know Daley will be calling for the abolition of TIFs.v

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