Three University of Chicago public policy graduate students devised a Stadium Securitization Corporation, modeled after Chicago's Sales Tax Securitization Corp., through which they hope to keep pro sports teams in Chicago without shafting the communities that host them.
The University of Chicago's Harris School of Public Policy tackled stadium financing in this year's Harris Policy Innovation Challenge, with students and faculty packing the amphitheater-style seating of the school's Keller Center on Thursday and lining the wings overlooking the event.
Charlie Schraw, Christina Tsai and Liz Williams won the contest with their presentation, titled "Structuring the Deal." Their plan includes three mutually reinforcing parts: the SSC, binding community benefits agreements and sustainability standards designed to ensure a durable investment.
"Chicagoans, who have watched their public dollars flow for decades to franchises with little to nothing coming back to their own neighborhoods, are paying attention," Williams, a Master of Public Policy student in the 2026 class, said Thursday of the debates around new stadiums for the Bears and the White Sox.
"Chicago's current model for financing stadium deals is broken," Tsai said in Thursday's presentation. She is working toward a Master of Science degree in Computational Analysis and Public Policy. "Right now, the city relies on a single revenue source, a portion of the hotel tax, to cover all existing stadium debt, and this causes a long-term strain on the city's budget... There's ballooning debt payments, and this means less money for public services."
"But zero public funding is a non-starter... We need a framework that protects taxpayers and their interests and gives the city real negotiating power," Schraw, MPP 26, added Thursday.
"The stadium debate was a really great platform to give students an opportunity to talk about their views, to be able to apply how differently they think about public infrastructure investments compared to previous generations," Justin Marlowe, research professor at the Harris School, faculty co-director of the challenge and director of the Center for Municipal Finance, told The Bond Buyer.
He said it was intuitive for many of the student groups that "if you're going to dump a few hundred million dollars of taxpayer support into any major investment, whether it's a stadium or the quantum campus on the South Side, you need to be thinking about how you leverage investment to improve infrastructure, to improve the business climate, to have all of those sort of leveraged spillover effects," including to address climate change.
"When you look across all of the teams that participated, many of them talked about transit; many of them talked about sustainability," he said. "Many of them thought of investments in professional sports facilities as not just an economic development driver, but as a catalyst for infrastructure investment… and there were quite a few groups that talked about affordable housing."
Some students "picked up on the idea that these could actually be investments in climate resilience and stormwater management and recreation and things like that. It was really cool to see how they thought of this," he said.
Ninety students on 16 teams participated in the challenge, as did stakeholders, mentors and judges.
The latter included Bill Conway, alderman for Chicago's 34th Ward; Derek Douglas, president of the Commercial Club of Chicago and the Civic Committee; Tovah McCord, executive director of Nicor Illinois Community Investment; Mike Parker, former Americas Infrastructure Leader of Ernst & Young; and David Wells, former CFO of Netflix.
During a seminar over the course of the contest, students learned from stakeholders including state Rep. Kam Buckner, D-Chicago; Chicago's acting CFO, Steven Mahr; Randy Recklaus, village manager of Arlington Heights; radio host Laurence Holmes of The Score 104.3; Michael Ellch and Charlie Trotier from Related Midwest; and Danny Ecker of Crain's Chicago Business.
The teams also drew on guidance from mentors, with Shelby McQuay, a senior municipal advisor for Ehlers' school finance team in Minnesota, mentoring the winning team.
Schraw, Tsai and Williams credited McQuay with keeping their team "grounded and on track" and playing "a huge part in our presentation style," helping them refine their pitch.
"Shelby had a wealth of knowledge when it came to municipal finance — specifically, methods that were successful for Minnesota's US Bank Stadium financing," the trio said by email. "Her expertise added real depth to our research and allowed us to test the financial and political feasibility of our ideas against projects that have already been executed."
The team's presentation outlined the creation of a Stadium Securitization Corp., or SSC. The SSC would be legally separate from Chicago and bankruptcy remote, the team said.
It would have multiple dedicated revenue streams — the hotel tax, a captive tax stadium district sales tax, and city and state subsidies — that would be pledged first to debt service payments, then to debt service and maintenance reserves, and finally to the city's general fund.
There would be a cap on bond issuance through the SSC and a higher debt service coverage ratio to secure higher ratings and lower interest payments, the team said. But they argued against creating "yet another" tax increment financing district around any new stadium.
"A stadium deal for a billion-dollar franchise doesn't align with what the program was built for — and frankly, Chicago's TIF program has already stretched well beyond that original purpose," the team said by email, pointing to "a huge disconnect," with revenue "accumulating in siloed district accounts while the city struggles to fund basic services."
They also cited equity concerns, noting that "the data suggests capital often flows toward areas where development was already occurring," such as the north rather than the south or west sides.
"Layering a stadium TIF on top of this history may compound these problems," they said by email.
The team said Thursday the debt issued through the SSC would be "structured to decline, not balloon."
They acknowledged by email that "the SSC itself can't guarantee always-declining debt," with much depending on political decisions and market conditions.
"The main lever to prevent backloaded structures is legal covenants," the team said. "Our proposal provides the framework for enforcement through statutory language," suggesting Illinois Sports Facilities Authority bylaws or SSC bond covenants "that would explicitly prohibit scoop-and-toss refinancing."
Tsai said Thursday that "having a plan in place allows the city to come to the negotiating table with discipline and leverage, not desperation, and this leverage is what allows the city to negotiate better deals for Chicagoans."
That negotiation would include a community benefits agreement from the outset, the team said, calling the recent CBA around the Chicago Fire soccer team's private stadium deal "backwards."
"The community had to push for benefits after the shovels were already in the ground," Schraw said Thursday. "A CBA must be negotiated upfront and not as an afterthought. And we know what's possible. The Obama Presidential Center right down the road is a strong example of how large-scale projects can create value for Chicagoans."
Designing for flexible use, with at least 20% of annual use reserved for low-cost community events, would be a bond condition, the team said. They also proposed a non-relocation covenant that would require teams to repay all interest and principal on bonds if they left.
"If they choose to take public dollars for infrastructure funding on and around the site, then we will require a signed CBA as part of the bond covenant," the team said by email.
In their presentation, the team acknowledged
The agency currently handling stadium debt, the Illinois Sports Facilities Authority, "should be restructured into the main body for enforcement and negotiations," Tsai said Thursday.
"The concrete enforcement mechanism is codifying monetary caps on bond issuance directly in ISFA's bylaws," the team added. "This would prohibit the city from issuing more bonds than the dedicated revenue streams sold to the SSC can actually support, while ensuring the required debt coverage ratio is achieved."
The team would also require a transit management plan be certified by ISFA "before a single bond is issued," they said by email. And they would require that no public dollars go toward a parking garage, with at least half of game attendees required to arrive without a car in the first five years after the stadium opened.
Pro sports teams have to "demonstrate how they are going to get fans there without a car before the deal closes," the team said.
"Once the stadium opens, mode share is tracked and reported annually in a public format. Consequences for noncompliance would be written into the lease, (including) direct financial consequences. Chicago has the infrastructure to make this realistic," they said by email, calling the present moment "an inflection point"
They also noted that the city has "worked hard to be a climate leader," and said its pro sports stadiums should reflect as much.
A stadium that declines or proves vulnerable to flooding and extreme heat means a failure of the public investment, the team said by email, calling for LEED Gold and similar green building standards to justify the investment over the stadium's lifespan.
"If Chicago is spending millions of dollars on a stadium, it needs to maintain its excellence from year one to year 30," they said.
