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Bulls: New practice facility a go, but entertainment complex needs a tax break

Proposed $95 millientertainment complex lot H United Center which is east arena.

Proposed $95 million entertainment complex on lot H of the United Center, which is east of the arena.

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Updated: December 19, 2012 1:14PM

The Bulls on Friday nailed down plans to build a new, 55,000-square foot practice facility in a United Center parking lot, but construction of a $95 million entertainment complex on the east side of the stadium hinges on an extended property tax break.

Howard Pizer, executive vice-president of the Bulls, also revealed that the team has made a lucrative offer to DePaul University to play basketball at the United Center, instead of building a new arena near McCormick Place that would compete for concerts with the UC.

“It’s a very, very solid economic offer. Very lucrative for DePaul to play at the United Center,” Pizer said.

“We’ve had conversations. Some of it is by e-mail. Some orally. I have not heard a ‘no.’ It is not off the table. You’d have to talk to DePaul about what makes the most sense [for them]. All we know is we made what we think is a really good offer to DePaul.”

Mayor Rahm Emanuel is determined to bring the Blue Demons basketball program back to Chicago when the school’s lease at the Allstate Arena in Rosemont expires.

He has talked about building a new home for DePaul near McCormick Place to serve as a catalyst for development of restaurants, clubs and other nightlife the convention center now lacks.

Pizer acknowledged that the Bulls and Blackhawks, who built the United Center, would like to avoid having to compete for concerts and other sporting events with a somewhat smaller basketball arena built for DePaul.

“It would be hard to say that was in our best interest. We would prefer not” having the competition, he said.

DePaul spokesperson Cindy Lawson said the nation’s largest Catholic university has looked at more than a dozen sites and is “still considering all proposals,” including the United Center.

“None of them are close to closure. All of them are on the table. It’s just who comes forward with the best option,” she said.

“There is no perfect proposal forthcoming yet. Some are purchase. Some lease-purchase. Some involve constructing on our own. Every single one has advantages and disadvantages. We want to weigh all of those and determine which makes the most sense economically, logistically and as far as long-term maintenance.”

In June, the Bulls announced plans to move their practice facility from Deerfield to Chicago. Last month, they settled on building the facility on Parking Lot J, which sits east of the United Center across South Wood Street between Monroe and Madison Streets.

On Friday, Emanuel and Bulls Chairman Jerry Reinsdorf nailed down those plans and released a glitzy architectural rendering of the new facility, which is expected to be completed in time for the 2014-15 NBA season.

Both sides insisted that “no tax incentive was asked for or received” for the practice center project.

But Pizer disclosed for the first time that construction of a $95 million retail and entertainment complex on the east side of the United Center is contingent on nailing down an updated version of the property tax formula that has saved the Bulls and Hawks millions on property tax bills assessed against the United Center.

The tax break is due to expire in 2016. It includes a complex formula that ties United Center property taxes to stadium revenues, with a $1 million-a-year minimum. The UC’s most recent property tax bill was $2.5 million, Pizer said.

“We recognize that it’s not going to be sufficient and government would not accept a mere extension of what was done 20 years ago,” Pizer said.

“We understand that the existing formula is not on the table and that we would have to negotiate something that works for everybody. We are certainly prepared to negotiate. But we are not going to build it [the entertainment complex] without some type of formula that has yet to be negotiated.”

Bulls Chairman Jerry Reinsdorf and Blackhawks owner Rocky Wirtz — an investor in Wrapports LLC, which owns the Chicago Sun-Times — want to create a 263,000-square-foot retail-and-entertainment center in the shadows of the UC that would add four restaurants, four bars, a team store, an event space, team offices, parking, a terrace, an atrium and a green roof, according to Metropolitan Planning Council documents.

The complex would include building an atrium over the statue of Michael Jordan.

On the day the Bulls disclosed their plans to leave Deerfield for Chicago, Emanuel did not rule out an extended property tax break.

The mayor also acknowledged the possibility of creating a new CTA stop that would serve both the United Center as well as a new Malcolm X College he plans to build adjacent to the old one now located east of the United Center.

But Emanuel vowed to “represent the taxpayers and make sure they’re not taken to the cleaners” to help a professional sports franchise.

“There will no sweetheart deals,” he said.

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