City prepared to forfeit some amusement taxes for Wrigley renovation: sources
BY FRAN SPIELMAN City Hall Reporteremail@example.com April 3, 2012 11:02AM
Wrigley Field at Clark & Addison. | John H. White~Chicago Sun-Times.
Updated: May 5, 2012 8:09AM
As the Cubs ready for their home opener Thursday, Mayor Rahm Emanuel and his administration are in the final stages of negotiating a deal to pave the way for the renovation of 98-year-old Wrigley Field.
If there is an agreement, sources said it’s likely to include a variation of the financing scheme that Emanuel once called a “non-starter”: the city forfeiting 35 years’ worth of amusement-tax growth from the Cubs.
But there’s a new wrinkle: The Cubs have agreed to a minimum guaranteed payment to the city that would increase every year — an attractive proposition after amusement-tax revenues plunged in 2011 along with attendance at Cubs games.
And if amusement-tax growth exceeds the amount needed to retire stadium bonds, the city would get a share of that money.
“That protects against the downside,” a source familiar with the plan said. “The city and county will be able to budget for at least that amount, regardless of what happens to attendance.”
On Tuesday, Emanuel refused to say whether he had found a way to help subsidize renovation of the iconic ballpark without forfeiting amusement tax growth.
For the first time, he demanded the Cubs invest their own money in the stadium instead of the team pumping $200 million into the construction of the so-called “triangle building” adjacent to Wrigley.
“Whatever we do to enhance the value of Wrigley Field, it will be to make sure the private owners enhance the value at Wrigley Field,” the mayor said at an unrelated event on the Far South Side.
“I will not put my money in their field so they can take their money and invest around the field and get greater economic value.”
The Cubs did not respond directly to the mayor’s demand. Team spokesman Julian Green said the team was working “hard to reach a concensus” in ongoing talks with the city, county, state and “our Wrigleyville neighbors.”
Cubs’ owner Tom Ricketts has been trying for nearly two years — and the Tribune Co. was trying for years before that — to convince the city to forfeit 35 years’ worth of amusement tax growth to bankroll Wrigley renovation. That would allow the Cubs to invest in the triangle building, which would include an upscale restaurant, stores specializing in Cubs’ merchandise, team offices, batting cages and a rooftop garden.
As a mayoral candidate, Emanuel was once dead-set against giving up the amusement tax growth. But as mayor, he is determined to get the deal done.
“We’ve had good conversations. We’re kind of in the final stages of that,” the mayor said. “But, my job is to represent the people of Chicago and to represent the taxpayers so, whatever we do, we get good value as stewards of the taxpayers’ money.”
Pressed on whether he would sacrifice amusement tax growth, he said, “Every piece fits together. I’ll let you know the whole piece when I’m ready. All the pieces have to work together.”
Sports marketing expert Marc Ganis said using amusement taxes to help finance stadium renovation is the “standard around the country.
“In St. Louis, they dedicated seven percent of the ticket tax to ballpark construction. In Los Angeles, the City Council has approved using 100 percent of ticket tax revenue to fund a new football stadium,” Ganis said.
Noting that Wrigley desperately needs to be rebuilt, Ganis said, “If the restoration doesn’t get done, it’s likely that fewer fans will go to Wrigley and revenue streams will start to go down. In 2011, the numbers went down dramatically. The city needs to protect against Wrigley become less of an economic engine.”
Sources said Wrigley Field’s renovation will likely be accomplished during several off-seasons, and the team would not be required to find another place to play during the rehab, sources said.
The renovation would also require relaxing the ballpark’s landmark status.
The City Council landmarked “historic elements” of Wrigley in 2004 as part of an agreement that paved the way for 12 more night games. The designation covered the exterior and marquee sign at Clark and Addison, the quaint center field scoreboard and ivy-covered brick walls and the uninterrupted sweep of the bleachers and grandstand.
After winning the election, Emanuel sent the Cubs back to the drawing board in search of financing alternatives.
Chief Financial Officer Lois Scott has since met repeatedly with the Cubs to discuss a short list of options that might include reviving the failed plan to have the state buy and renovate Wrigley.
Other possibilities include: creating a tax-increment financing district around Wrigley; using historic preservation tax credits or broadening the boundaries of a one percent tax on downtown restaurant meals used to finance McCormick Place. That tax currently extends as far north as Diversey.
Another, more controversial idea is the sale of personal seat licenses similar to the Soldier Field PSLs that the Bears used to contribute to their taxpayer-supported stadium.
Emanuel’s edict that the Cubs invest in the stadium first is not expected to kill the triangle building, just modify it. That’s okay with local Ald. Tom Tunney (44th).
“They’re gonna build something there, but what they’re trying to do is more remote parking and less parking at the triangle building. That would lower the height and make it more of an open plaza and more of a year-round amenity for the community,” the alderman said.