As the White Sox celebrate 25 years at U.S. Cellular Field this season, their fans can rejoice in a resurgent ballclub on the field.
Whether taxpayers are as joyful subsidizing the publicly owned ballpark is another matter. Though the ballpark has now been paid for, a variety of taxes continue to underwrite millions of dollars’ worth of renovations for a facility economists say has limited economic impact on Chicago.
“The return of investment is really low, maybe negative” for the public, University of Chicago sports economist Allen Sanderson said.
Payments for bonds funding the stadium’s construction were completed six years ago. But the Illinois Sports Facilities Authority, the public agency that owns and operates the Cell, has other responsibilities: nearly $430 million in debt related to renovations at the ballpark and a major overhaul of Soldier Field, including $36 million in payments owed this year.
ISFA Executive Director Lou Bertuca said the authority is “confident” it will make the debt payments.
To make its annual payments, the agency mostly relies on cash from Chicago hotel taxes. In addition, the city of Chicago and state each pay a $5 million subsidy required by law.
The Bridgeport ballpark was proposed in the 1980s to counter a threat by Sox Chairman Jerry Reinsdorf to move his team to Florida, where a stadium was built to lure a team.
Then-Gov. Jim Thompson worked the floors of the General Assembly to pass a law creating the facilities authority in order to build a new ballpark. (Thompson later served as the authority’s board chairman.) The clock on the House floor was turned off in order to meet a midnight deadline.
The arrangement, spelled out in state law and a lease agreement that expires in 2029, called for the authority to design, build and maintain the ballpark. But ever since the authority’s creation, it has been criticized for not looking out for taxpayers in its dealings with the team.
“It is one-sided,” said Lake Forest College sports economist Robert Baade. “I think the city and state (were) very much afraid they were going to lose the Sox.”
For example, the deal requires any nonbaseball events to be approved by the Sox, which some have said deprives the authority of the opportunity to book concerts and other lucrative activities.
Several years ago, the authority paid nearly $7 million to build a 10,000-square-foot restaurant outside the stadium, now called the ChiSox Bar & Grill. The team pitched in $1 million, but the authority agreed to forgo any profits at Reinsdorf’s request.
Sox spokesman Scott Reifert defended the arrangement with the authority and said the Sox turned down a “better” deal to stay in Chicago.
“The construction and operations of the ballpark were very creatively funded by relying primarily on tax revenues from visitors to the city of Chicago rather than its residents, and every hot dog and soda sold at a Sox game benefits the city, county and state of Illinois,” he said. “Like any long-term contractual agreement, all parties have shown a willingness to compromise, adjust and work together for our mutual success.”
Under the deal, the Sox didn’t have to pay a fee for use of the stadium until 2008. In 2015, that fee amounted to about $1.6 million.
The Sox also must pay a fee on each ticket sold in excess of 1.93 million in paid attendance. Since 2008, the Sox have paid that fee only in 2010, when games drew 2.2 million fans. However, the Sox were allowed to apply a credit based on the taxes the team paid that year, reducing the ticket fee payment from $455,974 to $95,531.
“The White Sox didn’t have that much of an incentive to really pack the place,” Sanderson said.
Last year’s attendance was 1,755,810, better than only four of the 30 Major League teams. Despite leading its division this season, the Sox have the second-worst total attendance in baseball.
Baade said it’s still disturbing that the city and state contribute money from their general funds at the expense of taxpayers who aren’t interested in sports.
“How you justify that has always been an issue,” Baade said. “You’re subsidizing elite spectators often at the expense of people of modest or less economic means.”
Baade said politicians and teams often justify public financing of stadiums with claims of broader economic benefits. However, the isolated Cell is surrounded by parking lots and has never made much of a dent on the economy of Chicago or Bridgeport, he said. “It’s crystal clear that did not happen.”
Stadiums like the Cell are designed as walled cities to bring as much income inside the stadium as possible, giving local businesses little reason to open up shop nearby, according to a 2007 journal article that Baade co-authored.
Reifert said teams and public officials continue to believe that sports facilities are valuable for local economies.
“In the case of the White Sox — and in addition to all of the marketing, public relations, community relations and charity benefits we bring to the city on an annual basis — we have produced a significant amount of amusement tax revenue and other direct tax payments to the city, county and state, in addition to other economic benefits, over the past 25 years,” he said.
The authority created to build the Cell, meanwhile, continues to help local sports owners with their stadium needs.
In 2001, state lawmakers passed legislation so the authority could issue bonds for renovations at Soldier Field — changes that then-Mayor Richard Daley and others said were needed to keep the Bears in Chicago.
The agency initially provided more than $400 million through bonds toward the $600 million project, which included some money for work at the Cell. (As the agency increased its debt, the city agreed to provide extra money if hotel tax revenue fell short; that happened once, totaling about $185,000.) Cost overruns brought the cost to about $690 million, and a Tribune analysis found the public portion was actually $432 million.
The authority issued bonds again in 2003 for $42 million for improvements and upgrades to the Cell and again in 2008 for a $10 million expansion project alongside 35th Street.
In 2014, a $291 million refunding of bonds helped ease the debt burden for the next two decades. But the authority said it still owes more than $430 million. Payments on the last portions of that debt are expected to last until 2032.
