As the deadline to end the spring legislative session came and went, the state legislature was ready to consider just about any desperate measure to keep the Chicago Bears in Illinois. Seasoned observers of Springfield’s end-of-session theatrics well know that ill-considered, last-minute fixes can lead to long-term headaches.
One big idea that emerged was this: A bill from the Senate called for authority to create new municipal financing agencies — possibly one in Chicago and one in Arlington Heights — to help finance stadium construction. They each likely would have authority to settle questions about ownership and revenue sharing over time.
That’s the bill that came too late for serious consideration in the House, and it died — at least for now — as the spring legislative session expired.
But wait: The idea of using a financing authority to help build a Bears stadium somewhere in Illinois has promise. In fact, the state already has a body for just that purpose, the Illinois Sports Facilities Authority (ISFA), which can fund stadium construction, but only in Chicago.
If new and improved financing authority is the answer to the Bears stadium search, perhaps it would be best to start with the ISFA, rather than creating two entirely new agencies.
Wouldn’t it be simplest just to expand the borrowing power of ISFA — which currently is operating near its legally mandated borrowing cap — and expand its reach to include Arlington Heights?
With a minimum of upfront work, the legislature could expand ISFA’s borrowing power so it could afford to help fund a new stadium, leverage its existing staff, expertise and its proven credit rating and take advantage of access to markets to seamlessly make capital available for a new stadium project.
The idea of creating separate municipal agencies has flaws. For starters, the approach would implicitly favor Arlington Heights over Chicago. The reason: Bonds issued by financing authorities typically reflect the creditworthiness of the government entity that sponsors that agency.
An Arlington Heights authority would have a credit rating linked to the village, with its high investment-grade credit rating. For Chicago, that would mean the city of Chicago, where the credit rating hovers just a few notches above “junk” status, and is at risk of going lower.
In Arlington Heights, borrowing would cost less. A strong village balance sheet might mean that other financing or revenue sharing options are available to the village that Chicago might not be able to offer. Disadvantage, Chicago.
A reliance on separate municipal financing agencies also would create the potential for perverse financing incentives, from either Chicago or Arlington Heights or both, as the city and village compete to land the Bears. The competing municipalities might offer the Bears stadium-ownership rights that may not be prudent, or grant the team revenue streams, such as parking, that might better be retained by the municipalities.
In total, the creation of a new financing piggy bank, under the control of mayors, could wind up with local taxpayers paying too much of the cost and giving up too much of the revenue.
On the other hand, the mayors of Chicago and Arlington Heights might also want to broaden the lending authority of each agency beyond just sports arenas. This idea has potential, and merits further study, and could be considered for ISFA as well as any potential municipal agencies.
No wonder Mayor Brandon Johnson began floating the idea of Chicago control of ISFA some weeks ago. There’s huge potential upside if a city gets its hands on one of these things.
The Illinois Sports Facilities Authority is not set up perfectly by any means, and there is plenty of room for improvement once the General Assembly gets back to work.
For example, the $5 million that ISFA receives from the state and city each year and the 2% tax on Chicago hotel stays doesn’t cover all of ISFA’s costs. According to ISFA’s data reported by Crain’s Chicago Business, the city of Chicago could end up covering a nearly $8 million shortfall in 2026 and a gap of around $14 million next year.
That said, ISFA is designed as a state agency. The state’s governor, JB Pritzker in this case, has control by virtue of appointing the chair and three other members; Chicago’s mayor has three slots.
The state has a strong interest in where the next stadium gets built in Illinois, for starters. But with ISFA involved, the state would have a say in seeing the Bears build their stadium in a place and at a cost to taxpayers that best benefits the state, at the lowest cost to its taxpayers.
Such decisions arguably can best be done at a state level rather than from the more parochial position of city mayors. Setting up a circumstance in which Chicago and Arlington Heights compete by each offering lucrative packages to the Bears seems set up to benefit the Bears most of all.
Putting the financing responsibility in the hands of a neutral state agency just might serve taxpayers best. And that should be the bottom-line goal as the legislature gets back to work.
David Greising is president and CEO of the Better Government Association.
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