CHICAGO - The Illinois Sports Facilities Authority is preparing a revised bid to purchase and renovate Wrigley Field - the historic home of the Chicago Cubs - that won't rely on public tax subsidies or tax-exempt borrowing, authority chairman James R. Thompson said Wednesday.
Thompson declined to elaborate on details of the formal proposal that will soon go to the Tribune Co. - owners of the Major League Baseball franchise and the ballpark on Chicago's north side. Thompson, a former Republican governor, briefed authority board members on the status of negotiations in a closed-door board session late Wednesday in the offices of Winston & Strawn LLP, the law firm where he serves as a senior chairman.
"It's a no-tax deal," Thompson said of the latest proposal after the board meeting.
The authority originally floated several financing ideas that involved establishing a tax-increment district in which growth of sales and amusement taxes would be diverted to repay bonds issued to finance the deal, along with team lease payments, and the sale of naming rights. Thompson had said those funds could go to repay $350 million to $400 million in tax-exempt borrowing that would pay for renovations to the ballpark.
Thompson scrapped proposals that relied on any tax revenues and borrowing amid opposition from city and state officials. He also dropped suggestions that the city should ease landmark status restrictions on the ballpark to accommodate renovations.
Thompson declined to say how the authority intends to finance the acquisition and renovations. A partial naming rights deal is one source of potential revenue to help cover the cost of the purchase. Thompson said the Wrigley name would remain but suggested a corporate sponsor might be willing to purchase the right to add its name in some capacity.
He said he presumes "there are people out there who think so highly of Wrigley Field that they would want to be associated with it and therefore would be willing to pay for that privilege." Reports have circulated in other publications that revenue for the renovations could be raised from selling off personal seat licenses or equity seat rights.
The Tribune Co. is simultaneously seeking to sell the Cubs. If a state deal falls through, the Wrigley transaction could be part of the team sale. The authority's pursuit of the 94-year-old ballpark began last year after Illinois Gov. Rod Blagojevich asked the authority to look into taking it over as a means to ensure the Cubs remain there for at least 30 years as the Tribune's new owner, Sam Zell, sought to shed the team. Thompson declined to put a current price-tag on the authority's latest offer as the cost of renovations will be subject to negotiations with the new team owners.
Any new borrowing would have required state legislative approval because the agency has limited borrowing authority remaining. Any agreement between the authority and Tribune would still require state legislative approval so that the authority could take ownership of another ballpark.
Some have questioned whether any deal could win approval, even one without tax revenues, given the divisive atmosphere at the state capitol and the crowded agenda facing lawmakers, who still need to pass the state's operating and capital budgets.
Thompson said he was hopeful. "If we were able to present to the legislature a tax-free deal, that eventually would give the people of the state of Illinois ownership in a very valuable asset and guarantee the Cubs would stay here for at least the next 30 years, I would hope we would get the majority of the legislature to agree with us," he said.
The sports authority was established in 1987, while Thompson was governor, to manage the financing and operations of a new ballpark for the Chicago White Sox. The authority's $150 million of bonds, sold in 1989 for the project, are backed by a state appropriation and repaid with hotel taxes. The authority issued $400 million in 2001 to finance the renovation of the Chicago Bears' Soldier Field. Those bonds are repaid with the same stream of tax revenues.
Scott Balice Strategies LLC serves as financial adviser to the authority and Mayer Brown LLP is legal counsel.
