Quinn-Emanuel battle over sports authority rooted in hotel tax, mayoral aide says
BY FRAN SPIELMAN City Hall Reporter email@example.com October 17, 2012 7:36AM
Updated: October 17, 2012 8:48AM
A top mayoral aide tried Tuesday to explain the turf battle between Mayor Rahm Emanuel and Gov. Pat Quinn over who will lead the stadium authority that built U.S. Cellular Field and helped rebuild Soldier Field.
Chief Financial Officer Lois Scott said Chicago taxpayers are the financial backstop for Soldier Field bonds whenever the hotel tax falls short of rosy growth assumed a decade ago.
That came “perilously close” to happening last year, for the first time in a decade, Scott told aldermen during City Council budget hearings.
Chicago’s share of the state income tax was nearly docked by $1.1 million because the 2 percent hotel tax increase that helped finance the Soldier Field renovation nearly 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.
Although the city dodged that bullet, Scott warned that an “accelerating curve” of bond payments creates “an increased risk that, at some point, we’ll be on the hook.”
She added, “I know the [Wall Street] rating agencies have looked at that and expressed concern.”
Quinn has been maneuvering for weeks to install his former assistant budget director-turned communications chief Kelly Kraft as executive director of the Illinois Sports Facilities Authority.
Emanuel has been equally determined to stop the appointment on grounds that the former television reporter lacks the financial expertise needed to provide the required oversight.
Last week, the governor accused the mayor of blocking Kraft to pave the way for a “back-room deal” to renovate Wrigley Field.
Emanuel responded by ruling out using the stadium authority to help the Cubs — either by issuing tax-exempt bonds to finance a Wrigley renovation or by reviving a failed plan to have the state acquire and renovate the 98-year-old stadium.
He insisted that his dispute with Quinn is about “protecting the taxpayers” and nothing more.
The Soldier Field deal nearly fell apart after the terrorist attacks of Sept. 11, 2001.
To salvage the renovation, then-Mayor Richard M. Daley negotiated a protection for Chicago taxpayers. The bond issue 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 after the terrorist attacks. But, it also created the “accelerating curve” of payments that Scott warned about on Tuesday.