Emanuel: City ‘not an ATM’ for Soldier Field bond payoff
BY FRAN SPIELMAN City Hall Reporteremail@example.com December 1, 2011 3:20PM
Bears and Packers fans wait in line to enter Sunday's game at Soldier Field.| Tamara Bell~Sun Times Media
Updated: January 3, 2012 9:22AM
Chicago taxpayers are “not an ATM machine” and they cannot afford to be the financial backstop for Soldier Field bonds whenever the hotel tax falls short of rosy growth assumed a decade ago, Mayor Rahm Emanuel said Thursday.
That’s what happened earlier this year for the first time in a decade.
Chicago’s share of the state income tax was docked by $1.1 million because the 2 percent hotel tax increase that helped finance the Soldier Field renovation fell short of the 5.5 percent annual growth needed to retire the $400 million debt.
That’s on top of the $5 million-a-year contribution Chicago taxpayers had already made.
That appears to be part of the reason why Emanuel ordered a housecleaning at the Illinois Sports Facilities Authority that swept out former Mayor Richard M. Daley’s nephew and two other city members.
“I want a healthy industry … in the sports area. It’s part of the entertainment and part of the quality of life in the city. But I also want the taxpayers represented. I want their voices heard at the table. … I don’t want the taxpayers of the city of Chicago to be treated as if they’re just an ATM machine. They’re not,” he said.
“They work hard for their money and we have to respect it. Which is why I’ve asked for a new board and I gave ’em clear instructions. You sit at the table and you represent the people of Chicago. You’re not there for yourself. You’re not there socially. You’re there as a voice of the taxpayers.”
Ten years ago, the Soldier Field renovation nearly collapsed after the terrorist attacks of Sept. 11 nearly ground the travel industry to a halt.
To salvage the deal, Daley pressured the Bears to permanently forfeit their right to sell corporate naming rights to Soldier Field and built in a two-year protection for Chicago taxpayers.
Under the original version, the state could keep a chunk of the city’s share of the state income tax whenever the Chicago hotel tax failed to grow at an annual rate of 5 percent — enough to retire $399 million in stadium bonds.
The new version was restructured, with interest payments deferred, to make a local tax bailout unnecessary for two years. That gave the airline, convention and tourism industries an opportunity to rebound from the devastating losses they suffered in the wake of Sept. 11.
It also salvaged the stadium project and still let Daley avoid the politically untenable position of putting Chicago taxpayers on the hook for the Bears at the same time he was raising taxes to finance more pressing needs.
The rosy assumptions worked — until this year. But unless Emanuel’s new appointees refinance or somehow restructure the deal, there’s no guarantee that Chicago taxpayers won’t be on the hook again.
Two of the mayor’s new stadium authority appointees — Jim Reynolds, chairman and CEO of Loop Capital Markets, and Norm Bobins, former chairman of LaSalle Bank Corporation — could not be reached for comment.
The housecleaning swept out Peter Q. Thompson, Daley’s nephew, along with banker Alvin Boutte and attorney William Power.