Brown: Rosemont mayor questions sense of DePaul arena at McCormick
BY MARK BROWN May 20, 2013 8:04PM
5-1-2007 Bradley Stephens, 44, is sworn in as the new mayor of the Village of Rosemont by Village Clerk, Rosalie Lennstrom. Stephens, son of the Late Mayor Donald Stephens, is the 2nd Mayor in history of the Village of Rosemont. Stephens was sworn in before the meeting of the village Board. Photo by Dom Najolia, Chicago Sun-Times.
Updated: June 22, 2013 6:36AM
Rosemont Mayor Brad Stephens wanted to be heard Monday on the subject of Mayor Rahm Emanuel’s proposal to build a $173 million arena at McCormick Place.
“I don’t know that it’s economically viable,” Stephens said.
Well, that’s not very neighborly of him, I thought, which was no reason not to listen.
For both good and bad, this is definitely a case of: consider the source.
Rosemont, as you know, stands to lose DePaul University basketball as a tenant of its village-owned Allstate Arena if the McCormick Place arena is built — and possibly concert business as well.
In addition, the Rosemont-owned Donald E. Stephens Convention Center, named for the mayor’s late father, seems to be directly in the flight path of Emanuel’s plan to attract small and medium-sized conventions and trade shows to McCormick Place.
But Rosemont’s competitor status also makes Stephens well-positioned to understand the economics of the proposed 10,000-seat Chicago arena that could serve as an assembly hall for McCormick Place conventions.
And Stephens says Illinois legislators should be questioning the underlying financial projections in the arena proposal, especially considering that state sales tax revenue serves as the backstop for McCormick Place bonds if something goes wrong.
As recently as four years ago, state taxpayers were left on the hook for $19 million in sales taxes when the array of local tourism-related taxes fell short of meeting the debt service for bonds issued by the Metropolitan Pier and Exposition Authority. Overall, the city shelled out $57 million over a several-year period to help McPier keeps it commitments following a massive building expansion that couldn’t pay for itself in the post-9/11 economy.
Since then, those bonds have been refinanced and McCormick Place operations greatly improved, as has the local tourist trade and the tax collections that come with it — all of which makes it unlikely there will be any further need to draw on the sales tax backup, officials say.
While Stephens questions whether the city arena will attract enough business to pay for itself on an operating basis, that’s not really at issue as far as repayment on the bonds.
“I just don’t see the play here,” Stephens argued.
City officials are adamant that there is a strong market for use of the McCormick Place arena, and they deny any effort to compete with Rosemont..
So is this just sour grapes from Stephens?
Stephens insists that while he’s sorry to see DePaul leave, the financial impact will be negligible, given the good deal Rosemont gave the university. By adding a couple of extra concerts and maybe another WWE event, Rosemont will be able to more than surpass the lost revenue, he said.
And he argues that Allstate Arena’s 18,500 seats will give it an advantage over any 10,000-seat arena for concert business.
“At 10,00 seats, they can’t gross enough to get big acts to pay for itself,” Stephens said.
In one breath, Stephens says he’s not afraid of competition from McCormick Place, but in the other, he makes clear that’s very much on his mind.
For decades, Stephens said, Chicago and Rosemont always had a tacit understanding on the convention front, a “non-aggression pact,” if you will.
“Your business is your business, and our business is our business.”
Now, Stephens said, Chicago is openly courting the same convention business as Rosemont, and he argues the state funds that backstop McCormick Place borrowing “gives them an unfair advantage to steal business away.”
So what’s Stephens solution? Stop the McCormick Place arena in its tracks?
Hardly, he just wants a piece of the action. In any legislation drafted to authorize the arena construction, he wants Rosemont to get some help, too.
“If there’s something that enhances the convention business in Chicago, then there ought to be something that enhances the convention business in Rosemont,” he said.
Specifically, he’d like financial help for Rosemont to renovate its own convention center, maybe a state taxpayer backstop on the bonds like McCormick Place has.
“We’re looking for something back off the revenues we generate for the state. It’s as simple as that,” he said. “We should be in the mix.”
I told Stephens I was trying to slow down the tax subsidies, not to add to them.
But somebody will probably want some Republican votes on the McCormick Place bill, and to get them, don’t be surprised if Rosemont ends up “in the mix.”