Bonds

Chicago puts $2.2 billion price tag on high-end makeover of Soldier Field to keep the Bears

Chicago Mayor Lori Lightfoot laid out three options to make over Soldier Field as part of the last-ditch effort to keep the National Football League’s Chicago Bears from leaving the nearly 100-year-old stadium for a new venue in the suburbs.

The price tag ranges from $900 million to $2.2 billion, but the pitch lacked any specifics on how to pay for the renovations. Any plan is expected to include some level of taxpayer subsidy.

“It’s premature to lay out all the detailed financing plans today … that work is ahead of us and all options are on the table, and as you’ve heard, and the mayor has made this very clear, these options must be respectful to the Chicago taxpayer,” Deputy Mayor Samir Mayekar said.

“Many levers exist,” including league financing, naming rights, and “debt capacity,” he said. “Over the coming months we will complete an economic impact study on these concepts,” Mayekar said. “We will prepare a detailed financing plan for the multiple scenarios and we will have deeper conversations with existing franchise partners and many new partners and most importantly we will deepen our community engagement.”

The Bears have called the Chicago Park District-owned stadium, located on Chicago’s Lake Michigan shoreline on the city’s museum campus, home for 50 years. About $400 million remains outstanding from a 2001 bond issue that helped finance a $600 million renovation under a deal between the Bears and then Mayor Richard M. Daley that installed a saucer like seating bowl on top of the stadium’s historic colonnades.

The bonds aren’t retired until 2032. The Bears lease runs through 2033. The debt is repaid primarily with hotel taxes which plummeted over the course of the COVID-19 pandemic leaving Chicago this year to cover the shortfall.   

A rendering of one of the proposals to renovate Soldier Field, the current home of the Chicago Bears

Landmark Chicago Interests

A makeover
The first of the three options envisions a stadium that remains home to Bears franchise with a dome built on new columns that can support the structure, expanded seating and other amenities.

A second option calls for rebuilding both end zones with columns that make the stadium dome ready. A third modifies the stadium into a multi-purpose venue better suited for soccer while improving its flexibility to accommodate major concerts and a range of events.

“I think the impact alone in making the museum campus, and particularly Soldier Field, a year-round destination is something that we simply can’t pass up and we are going to move forward in a responsible way as fiduciaries of taxpayer dollars,” Lightfoot said at a news conference unveiling the proposals Monday with business leaders and developers.

The Lightfoot administration faces a hard sell with both the team, which is in negotiations to buy land in northwest suburban Arlington Heights, and taxpayers.

Landmark Development President Bob Dunn, who has developed other stadiums nationally, presented details of the proposals and stressed the structural capacity to put a dome on Soldier Field, which some had doubted.

Richard Price, executive chairman of Mesirow who served as chairman of a group tasked by Lightfoot with making recommendations to update the museum campus that houses Soldier Field, said any of the options have “enormous potential to spur economic growth for Chicago.”

Any naming rights deals would respect the current name that honors those killed in World War I.

The Bears did not bite, reiterating a previous statement from earlier this month when the mayoral task force on the campus makeover made its recommendations.

“The only potential project the Chicago Bears are exploring for a new stadium development is Arlington Park,” the team’s statement read. “As part of our mutual agreement with the seller of that property, we are not pursuing alternative stadium deals or sites, including renovations to Soldier Field, while we are under contract.”

The Bears signed a purchase agreement last year to buy the racetrack land for $197 million but it’s not yet been finalized.  

Lightfoot argued the economic benefits of keeping the team and in the case of its loss, renovating the stadium to expand its appeal for other teams and events, is worth the cost. “This is such an incredible asset,” Lightfoot said. “I think we will make a very compelling case that any investment made of precious tax dollars will have a substantial return on that investment that makes sense for the taxpayer.”

While many professional stadium construction projects have for decades received public subsidies, often in the form of tax-exempt bond financing, such assistance faces a tougher sales job as many question the economic benefits. At the federal level, legislative opponents have pitched legislation that would put an end to tax-exempt financing over the years.

Arlington Heights leaders left the door open to some limited help for a Bears stadium, according to the Chicago Tribune. Help could come in the form of a tax increment financing district that would tap property taxes generated by the project to pay for public works.

Gov. J.B. Pritzker has not ruled out state help, but in past statements said taxpayer subsidies were not something he was currently considering. “The governor’s position on state funding for Soldier Field hasn’t changed,” Pritzker spokeswoman Jordan Abudayyeh said in an email. “He looks forward to learning more about the proposals from the city.”

The facility currently is home to the Bears and Major League Soccer’s Chicago Fire FC. It also hosts concerts and other events.

“This is really going to be driven by who the tenant is and that will drive the variety of financing options that are available … one way or another we have to invest in Soldier Field,” Lightfoot said.

By making the pitch, Lightfoot gets some political cover should the Bears go through with the suburban move as she’s faced pressure by business and civic leaders to act to keep the team.

“I think it’s good news the city of Chicago is stepping up to be in the discussion,” said Laurence Msall, president of the Chicago Civic Federation. “It costs the city of Chicago very little to put proposals on the table. It’s not a commitment to give away the store but it keeps the discussion going.”

Future financing plans will need a full independent vetting to determine the value for taxpayers especially if debt is planned given the current struggles in repaying the existing Soldier Field debt. “There will have to be real transparency on any financing for the redevelopment,” Msall said.

Solider Field bet
The Illinois Sports Facilities Authority is still paying on the original 2001 $400 million issue. With interest, ISFA owes $743 million of principal and interest from the original deal and refundings in 2014, 2019 and 2021, most of it related to the Soldier Field bonds.

The debt is repaid from a local hotel sales tax and a city and state subsidy, each for $5 million. Under the complex financing and security structure, the state actually advances a portion of its own hotel tax collections to cover debt service, but the sports authority must then repay the state with its own hotel tax collections.

Should the authority’s hotel taxes fall short of what’s needed to repay the state, then Chicago is on the hook to cover that shortage. The agency last year undertook a scoop-and-toss debt restructuring to avoid hitting the city with a roughly $20 million shortfall. But the city this year was required to cover a $27 million gap from its share of state income taxes. Hotel taxes have rebounded somewhat since early COVID-19 pandemic blows, but fell short of covering debt service.

A potential $18 million gap looms for fiscal 2023. The authority intends a refinancing in 2024 that could ease pressures on the city.

Most of remaining Illinois Sports Facilities Authority debt is tied to the Bears, but the team’s potential departure does not pose a ratings threat.  “Should the team opt to leave early or not renew, ISFA bonds currently mature in 2032, and are not dependent upon activity in stadium,” S&P said last year. The Bears face a fiscal penalty if they exit the lease before it expires in 2033.

S&P rates the ISFA debt at BBB-minus. The rating agency caps the rating at one notch above the state under its priority lien criteria that takes into account the credit quality of the obligor where taxes are distributed and/or collected and the strength of the security pledged. That means the bonds could be rated at a high of A-minus because the state is at BBB-plus.  

Fitch Ratings rates the debt at BB-plus and caps the rating at one notch below the state putting a ceiling of BBB on the rating as the state is at BBB-plus.

“The BBB’-plus rating and stable outlook on the ISFA bonds reflects the weaker of the two dedicated tax pledges supporting the bonds, state hotel tax collections,” Fitch said in a June 30 report affirming the rating. “Projected coverage from state hotel tax collections is narrow, offset by strong performance in recent months, acceleration of reopening in the leisure and hospitality industry and additional support in the form of a state subsidy and available reserves.”

Lightfoot’s unveiling of the proposals follows the release earlier this month of a report from her task force that was asked to recommend strategic improvements to the 57-acre museum campus.

The group recommended the city explore a dome for the stadium. Lightfoot installed the working group in February as pressure mounted on the city to make a play to keep the National Football League team, which eyed a new suburban home — the former Arlington Park racetrack in Arlington Heights.

The campus houses the Shedd Aquarium, the Field Museum, the Adler Planetarium, Soldier Field, and the Lakeside Center of McCormick Place convention center. It also includes natural and recreational areas including the 12th Street Beach, Northerly Island Park, and the Lakefront Trail.

A makeover of Soldier Field may also run up against opposition from groups like Friends of the Parks which has legally challenged past developments that impact park land.

Photo renderings of proposed options can be found here.

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