CHICAGO – Illinois Gov. Pat Quinn prevailed in his feud with Chicago Mayor Rahm Emanuel over who should lead the Illinois Sports Facilities Authority Thursday when the board approved the appointment Quinn’s communications chief, Kelly Kraft.
The agency owns and operates U.S. Cellular Field where the Mayor League Baseball Chicago White Sox play, and it issued $400 million of bonds in 2001 to finance the renovation of Chicago Park District-owned Soldier Field, home of the National Football League’s Chicago Bears. It has also been floated as a potential financing vehicle to renovate Wrigley Field, home of Chicago’s other baseball team, the Cubs.
“Kelly Kraft’s unique combination of budget and communications expertise, intergovernmental experience and commitment to protecting taxpayers will be a strong benefit to the Illinois Sports Facilities Authority and the ballpark,” board chairman Emil Jones, a retired state Senate President and Quinn appointee, said in a statement.
Quinn was able to secure the appointment of his pick for the top position only after maneuvering to replace one of the board members – Manny Sanchez, a founding partner in Sanchez Daniels & Hoffman LLP, which does bond counsel work – with Dr. Quentin Young. Sanchez’s term had previously expired and he was informed Thursday when he showed up for the meeting that Quinn had named Young to fill the seat.
Sanchez had recently indicated to the governor he was not a slam duck vote for Kraft and would vote for the most qualified candidate, sources said. One of Emanuel’s appointees – James Reynolds, chief executive officer of broker-dealer Loop Capital Markets LLP -- had floated an alternative candidate in Diana Ferguson. She is a corporate finance executive who also briefly served as chief financial officer of the Chicago Public Schools and currently serves on Emanuel’s Chicago Infrastructure Trust board.
The vote was four to three in Kraft’s favor, with Quinn’s four appointments voting for Kraft and Emanuel’s three voting against. Kraft formerly served as assistant budget director and she was a spokeswoman on budget and other fiscal issues.
“Jim Reynolds put forward a candidate…with extensive financial and management experience, to lead ISFA and ensure Chicago’s taxpayers are protected,” Emanuel spokeswoman Sarah Hamilton said in a statement. “It is unfortunate that, with her experience and qualifications, Ms. Ferguson was not given any consideration by the board’s majority.”
In past appointments, the mayor of Chicago has often informally been given the courtesy of picking an executive director who is also to the liking of the governor, while the governor holds sway over the board chairman’s post.
The authority has long been without an executive director and finding one was a top priority after Quinn and Emanuel overhauled the board last year. Another priority – especially for Emanuel’s appointments – is a refunding of the Solder Field bonds.
The agency was forced in fiscal 2011 to tap for the first time a portion – $185,000 -- of the city’s share of state income taxes because of a shortage in hotel tax revenues that go to repay the Solder Field debt. City income taxes were pledged as a backup in the event hotel taxes fall short.
Hotel revenues have since rebounded and no draw was necessary for fiscal 2012, but with debt service rising 6.2% next year and increasing steadily in future years, the authority is under pressure to find a long-term solution.
The agency is hoping early next year to refinance the debt to provide a greater cushion against future draws. The inability to further push out the maturity schedule without state legislative action and the backloaded and premium bond structure have hampered past restructuring efforts.
Before the vote, Reynolds stressed the importance of hiring the most qualified candidate: “The city of Chicago and taxpayers have a lot of exposure with these bonds,” he said of the Soldier Field debt. Emanuel’s board appointments all come from the financial community.
Quinn has said he picked Kraft because he trusts her to protect the integrity of the agency if it is involved in a Wrigley Field renovation and he accused Emanuel of trying to tarnish her reputation, blaming his aides for a story in a local newspaper disclosing Kraft’s personal bankruptcy case, which is now closed.