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Billionaire subsidy whacked, explained

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Illinois

* The legislative reaction begins…

Leading state lawmakers were stunned to hear the state might be considering buying Wrigley Field to possibly ease the pending sale of the Chicago Cubs.

Both the top Republicans and Democrats in the Illinois House said they had never heard it discussed before media reports of talks between Gov. Rod Blagojevich and Tribune Co. officials emerged.

With a mass transit funding doomsday looming and millions worth of added education spending still in political limbo, some lawmakers said the baseball team and stadium simply aren’t a state priority.

“The current Democratic leadership even thinking of spending taxpayer money at this point in time to buy the stadium of a team that hasn’t won the World Series in 100 years could only be topped in ridiculousness if Britney Spears purchased Enron,” said David Dring, spokesman for House Republican leader Tom Cross of Oswego.

Spoken like a true Sox fan, Dringy.

* More…

Downstate lawmakers unleashed a chorus of boos Thursday after hearing the state may be in the market to buy Wrigley Field from the Tribune Co.

“It’s just absurd,” said state Rep. Bill Mitchell, a Forsyth Republican.

“That would be a story that belongs in the Sunday comics,” added state Rep. Dale Righter, R-Mattoon. […]

“With all that Blagojevich has got going on, you’d think he’d be focusing on the mass transit problems facing Chicago, not buying a ballpark,” said state Sen. Bill Brady, R-Bloomington.

“No one is talking about solving the state’s real long-term debt problems,” said state Sen. Dave Luechtefeld, R-Okawville. “This is getting to be ridiculous.”

* And we have some more details of the billionaire subsidy plan…

Whoever buys the Cubs would be required to sign an “ironclad commitment” to keep the team at Wrigley Field for the next 30 years, under a plan entertained by Gov. Blagojevich and condemned by Mayor Daley to have the state acquire and renovate the landmark stadium, officials said Thursday.

Having the Illinois Sports Facilities Authority, formed to build U.S. Cellular Field, officially acquire Wrigley for as little as $1 and finance a restoration in the $350 million-range — with work completed during several offseasons so the team wouldn’t have to move out — would be a dream come true for Blagojevich, a die-hard Cubs fan.

“We wouldn’t do this deal without a guarantee that the new owner would stay in Wrigley Field for 30 years,” said former Gov. Jim Thompson, chairman of the Illinois Sports Facilities Authority.

Like they’d leave anyway. This is all about subsidizing repairs and upgrades on that dilapidated, piece of junk park.

* More details about the scam…

Thompson said Thursday that Tribune Co. representatives, including Zell and Kenney, met with Gov. Rod Blagojevich “a couple of months ago” to present the idea of a state purchase of the ballpark.

They said, “‘We’d like you to consider the idea of ISFA acquiring Wrigley Field because if you did that, you could ensure the Cubs stayed in Chicago under a new owner, whoever that might be, and you could ensure they would play at Wrigley Field. You could find ways to restore the ballpark, which would make the team under the new owner more competitive,’” Thompson recounted.

Yeah, the governor gets to play the hero for keeping a team that won’t leave anyway. Wonderful. Thankfully, there’s this…

A deal would require agreement by the mayor, the City Council, the governor, the four legislative leaders in Springfield and the General Assembly, Thompson said.

Considering everything else that has happened this year, I seriously doubt this will fly.

posted by Rich Miller
Friday, Dec 14, 07 @ 9:44 am

Comments

Here’s a better idea. Get the new owner of the Cubs to hire Blago as GM. We could even provide a financial incentive to the new owner do so (say $100 million, which is still much cheaper than the $350 million to fix up the crumbling confines). Blago gets to live out his dream and the State would be able to replace him with a real governor. A win-win, except for Cubs fans. But they’re used to poor management anyway.

Comment by Bluefish Friday, Dec 14, 07 @ 9:53 am
&%^*$%#%!

There are so many things in the state that could use a little money for repairs & upgrades, including state parks, SCHOOLS, bridges, SCHOOLS, state buildings, SCHOOLS. No capitol program, but lets refurbish Wrigley?!?

Comment by Anon from this station Friday, Dec 14, 07 @ 9:55 am
I don’t get easily offended, but this idea — this thing that Blagojevich is “entertaining” — deeply, deeply offends me.

If Blagojevich is so in love with sports, then leave state government and manage (or buy with the help of his connected buddies) a team. But leave the state to someone who cares and has testicular fortitude enough to make a genuine difference.

Besides, Blagojevich is the *last* person on the face of the earth I’d want to drink a beer and talk sports with. He’s a phoney to the core.

Comment by Macbeth Friday, Dec 14, 07 @ 9:56 am
Can’t the Governor just decide that the imminent sale of the Cubs is an emergency and assign the funds out of some random pot, then say that the legislative panel designed to provide oversight has no jurisdiction when they try and stop it?

I know that’s never happened before, but still.

Comment by the commuter once known as So Ill Friday, Dec 14, 07 @ 9:57 am
Governor Thompson has always been one of my least favorite governors and I’m a Republican.. Now I find myself truly disliking this man.

Comment by Anonymous Friday, Dec 14, 07 @ 9:57 am
CaptFax:
While this is dumb idea, it is certainly no dumber than putting slots at AP so Churchill Downs stockholders can rake in more mooolah.

Comment by DumberThanYouThink Friday, Dec 14, 07 @ 10:06 am
Wait - how is this a scam?

The State gets Wrigley Field for $1.

Then gets to charge the Cubs $10 - $20 million a year in rent to use it.

At that point - no tax dollars are spent. Any future renovations and improvements would be financed not by tax dollars, but by marketing deals or naming rights, according to big Jim Thompson.

And the Cubs stay in Wrigley.

Despite what you think - there has been genuine fear for a while that a new owner would move the team out to a fancy, new, more profitable stadium in Schaumburg. You and I know that people only go to see the Cubs at Wrigley BECAUSE OF Wrigley.

But there are also tons of suburbanites who want to be able to go to a Cubs game without having to venture down into the city - enough to pack a new stadium. I think a new owner could make the same amount of money with a new stadium, even if it hurts the ambiance and tradition.

I am not saying I whole-heartedly agree with this. But I don’t think it is a scam to give more money to Zell.

Comment by GoBearsss Friday, Dec 14, 07 @ 10:07 am
We have put up with a lot of things since Blago has come on the scene but keep your sleazy hands off the Cubs.

Comment by Leave a light on George Friday, Dec 14, 07 @ 10:08 am
This kind of thing is so frustrating.

I have project I’m working on right now that would cost a lot less money (less than 5 million) and benefit more people, including a large number of children.

I have had a lot of help from local legislators and several constitutional offices. Word has been passed to the Gov’s office through several channels, but to no avail. His is the only office that has not responded.

Maybe if I went through Hannah Montana…

Comment by Pot calling kettle Friday, Dec 14, 07 @ 10:09 am
In fact - this seems like less of scam to give more money to a billionaire than it is a way for MLB to get the team to its preferred ownership group who doesn’t seem to have the money to buy Wrigley Field on top of the Cubs.

The Canning group is the preferred ownership group, but reports say they don’t have more than $600-$800 million to spend on the purchase. That would not be enough to buy the Cubs AND Wrigley.

Take a look at this item in Sneed’s column, today:

“Hmmm. Here’s a little dugout dirt.

* To wit: Sneed hears rumbles the John Canning group, which is vying to buy the Chicago Cubs and includes Tribune insiders like Andy McKenna, were well briefed about the possible sale of Wrigley Field to the state — and may have been trying to push it along because it would benefit them as possible future owners of the Cubs.

* Isn’t it true other groups vying for the Cubs had to wait to hear about it in the news? Questions. Questions.”

Comment by GoBearsss Friday, Dec 14, 07 @ 10:10 am
So, in the end, this is just bad news for Mark Cuban hopefuls.

Comment by GoBearsss Friday, Dec 14, 07 @ 10:12 am
Can’t Jim Thompson retire or something?

Comment by Garp Friday, Dec 14, 07 @ 10:12 am
Here is my question, and since I didn’t pay attention to this issue when it all went down, perhaps someone can guide me. How much (if any) backlash was there to the very pricey renovation of Soldier Field? And how many current GOP reps and senators through up a roadblock to Soldier Field’s renovations? I’m not condoning or condemning either move, but rather curious as I was in college when the Soldier Field issue arose and I honestly don’t remember.

The one positive way to look at this is simple. Wrigley Field and the Cubs are a cash cow for the city of Chicago and the state. How much added revenue do the Cubs add to the state’s pocket books and Chicago’s treasury? I would assume that, when combined, the stadium, the team merchandise sales, the bars and restaurants surrounding the stadium and all other money spent on everything else is quite substantial. It’s still not necessary to do anything like this at a time when we literally have no money, but I guess I shouldn’t be surprised.

Comment by Team Sleep Friday, Dec 14, 07 @ 10:18 am
“Preferred ownership group”

Why would they be preferred if they don’t have the cash? And if the state can take Wrigley over for $1, why not give it to the “Preferred ownership group” for the same price.

Let the market decide. If Wrigley goes for a big chunk of change, that’s a good indication that the buyer will fix it up and keep the Cubs there.

The State should spend its limited funds on things that benefit the citizens like education, infrastructure, & public safety.

Bearss: If it costs $350 million to fix it up (to which you would have to add annual maintenance) and they can only rent it for $10-20 million/yr; how does that pay for itself? Ever? There will need to be another upgrade long before the first one is paid off.) BTW, the sooner the state sells the south side park, the better.

Comment by Pot calling kettle Friday, Dec 14, 07 @ 10:20 am
I could strongly support this initiative only if the state promised to tear it down and build condos.The Cubs could move to anywhere. Wisconsin,maybe?

Comment by Bill Friday, Dec 14, 07 @ 10:32 am
“Why would they be preferred if they don’t have the cash? ”

That’s the question you will have to ask Major League Baseball. It is a group with ties to Bud Selig.

Most likely the only group that will receive approval to buy the team.

MLB is finicky about its owners, and they will let a team go for far below market before they let it go to the “wrong person.”

In the end, who they sell it to is not up to the State.

Comment by GoBearsss Friday, Dec 14, 07 @ 10:34 am
Read my post about how they pay for a $350 million renovation:

“Any future renovations and improvements would be financed not by tax dollars, but by marketing deals or naming rights, according to big Jim Thompson.”

Comment by GoBearsss Friday, Dec 14, 07 @ 10:34 am
Would ex gov. Thompson, as chair of the ISFA, really be the best person to oversee the expenditure of $350 million of taxpayer money on the renovation of Wriggly? Well, maybe so, since he so carefully looked after the shareholders in Hollinger and of course the best interest of the taxpayers in the two hotel deals done during his administration.

Comment by Lawman Friday, Dec 14, 07 @ 10:45 am
GoBearss, I agree with your assessment that the Cubs could move out to the northwest suburbs and do well. The fans will still go to games in the nwest burbs, and you have the opportunity to install more skyboxes (cash cows).

That being said, the City of Chicago, not the State of Illinois, should be the ones pursuing the purchase of Wrigley if they feel that a potential move to the burbs is possible. The Cubs aren’t talking about leaving the state, they may be talking about leaving the City of Chicago.

That being said, I think a move to the burbs is highly unlikely, and this is a move to get Canning et al in as owners. There is no need for the state or city to buy the stadium and make the repairs. Baseball has had record profits and there is no reason for the state to get involved in which ownership group owns the Cubs. The city may want/need to get involved, but it’s too early and threats of leaving aren’t serious enough.

Comment by Gene Parmesan Friday, Dec 14, 07 @ 10:47 am
Huntley Cubs has nice ring to it.

I say if the Cubs want to go, let them go. We’ll tear down Wrigley Field, and replace it with a new stadium and a winning team.

Go Cards.

Comment by Yellow Dog Democrat Friday, Dec 14, 07 @ 10:54 am
In the end, Rich, I feel your entire premise is wrong. Nothing about this will give Zell more money.

Zell could make $1 billion - $1.1 billion off a sale that involves the Cubs AND Wrigley.

Zell could only make $600 million - $700 million off a sale that involves just the Cubs, with Wrigley going to the State for $1.

It seems to me to be exactly the opposite of what you said.

Yet, I don’t know if I support this yet because this seems to be a way to more easily sell the team to the Canning group as I said previously. I prefer Mark Cuban ownership over Canning ownership.

But that is different from saying this is a subsidy to a billionaire.

Comment by GoBearsss Friday, Dec 14, 07 @ 10:54 am
GoBearsss, I don’t know where you’re getting your numbers.

From the Sun-Times…

==What’s in it for Zell is the ability to get a huge up-front payment — tens of millions of dollars higher than he might otherwise receive selling the stadium privately — by having the sports authority use its power to issue longer-term bonds at a reduced interest rate.===

Comment by Rich Miller Friday, Dec 14, 07 @ 10:57 am
And if you believe that old line about “taxes will never be used to pay for this” then you must be a newcomer to our fair state - which would explain some of your other comments.

Comment by Rich Miller Friday, Dec 14, 07 @ 10:58 am
Rich - Mark Cuban has said he will pay $1 - $1.1 billion for the Cubs & Wrigley.

If they steer this to the Canning Group, they will only get $600-$700 million.

If the State would be buying Wrigley for a price higher than on the private market, I would be opposed. But the Sun-Times piece is just wrong - that is not what is being proposed according to every other article out there.

This isn’t about Zell. This is about MLB getting the ownership group they want.

Comment by GoBearsss Friday, Dec 14, 07 @ 11:03 am
And you get your Canning Group offer from where?

Comment by Rich Miller Friday, Dec 14, 07 @ 11:06 am
Investing in the Cubs is like investing in the political future of George Ryan. Fools and their money are soon parted.

Comment by A Citizen Friday, Dec 14, 07 @ 11:12 am
It wouldn’t be hard for the governor to explain away again relying on Loop hotel taxes to pay for Wrigley. That’s not a tax on people. That’s a tax on the multi-billion dollar companies that run hotels in Chicago and don’t pay their fair share for the amenities that make the city great.

Comment by Michelle Flaherty Friday, Dec 14, 07 @ 11:20 am
A Citizen, are you kidding? The Cubs are a great investment. You don’t have to win and people still flock to your stadium to buy tickets and all the other junk at the game. Most fans barely watch the game, and you provide an enormous amount of economic activity to the city. You can run the team into the ground, and charge the second highest ticket prices in the league!

Comment by Gene Parmesan Friday, Dec 14, 07 @ 11:21 am
On the internets.

Anderson Economic Group valued the Cubs at $600 million, and some reports have put it higher than that. That number has been linked to the Canning Group’s projected offer.

Cuban has said he would pay over $1 billion for the package.

Comment by GoBearsss Friday, Dec 14, 07 @ 11:25 am
That’s an old estimate. Since then, by all accounts, the bidding has intensified. Also, you claim that the estimate was “linked” to the Canning offer. Where?

Plus, why should the state subsidize the Canning Group’s bid? It’s billionaire welfare.

Comment by Rich Miller Friday, Dec 14, 07 @ 11:31 am
I’m 100 percent in favor of (Unindicted Official) A-Rod buying Wrigley Field. We can have “A-Rod Day at the Park” and invite his cronies, flunkies, mob buddies, illegal campaign donors, payrollers and all the other bottom-feeders with whom he has surrounded himself to come out for a nice day at the Friendly Confines. While they’re there, Mr. Fitzgerald’s crew can just roll up the paddy wagons and begin processing them enmasse for their upcoming stays at the Federal Hilton.

Comment by The Mad Hatter Friday, Dec 14, 07 @ 11:32 am
Tom Cross would change his tune in a heartbeat if they were looking at a site in his district.

Daley highballed the Fire for the Comiskey parking lot site on the premise there is some inherent value in being inside the city limits. AEG passed and went with the Madigan deal in Bridgeview. Serving the geographic distribution of the Fire’s fanbase catchment was an important factor.

The problem with rehab is it will knock all the “charm” out of the place but still not equal the economic return or fan amenities from a new site. See Yankee Stadium. Nobody is complaining after the crappy 70’s rehab about saving “the House That Ruth Built”.

Skyboxes, parking, more seats, naming rights and night games all add up to a big pile of money.

Comment by HappyToaster Friday, Dec 14, 07 @ 11:36 am
There’s something missing here. What’s in it for Blago and Thompson? Of course, there are fees to be made from the issuance of bonds, and contracts for the renovation projects themselves. Those are nice — but motivation enough for an absurdly controversial proposal, at this time? You could issue bonds for schools and get those.

Other work/support from Zell/Tribune in the future, perhaps?

Comment by wordslinger Friday, Dec 14, 07 @ 11:39 am
It’s not the State’s decision to subsidize. And I don’t think it is subsidizing.

It is taking Wrigley Field out of the sale, transferring it over to the State. This allows the price for the Cubs to be lowered to the point that the Canning group can buy it cheaper.

If the State were to purchase it for $200-$300 million, that could be seen as subsidizing the Canning Group. But if the State gets it for $1, then you can’t make the same argument.

Like I said, I don’t like this because I would prefer to see Cuban as the owner. It reminds me of when the Red sox sold a few years ago for $700 million. There were higher bids. But the owners have to approve any new owner, and many suspect Selig tried to steer it to the right person.

That looks like that is what is happening now.

Does it harm the State? If the State can get Wrigley for $1, then it seems that the State comes out the winner.

But I would still prefer Cuban to own it.

Comment by GoBearsss Friday, Dec 14, 07 @ 11:41 am
Why bother rolling up the paddy wagons?

The number of Super Rods cronies, flunkies, mob buddies, illegal campaign donors, ghost payrollers and other assorted detritus could easily FILL Wrigley Field. Just fill, build a 12-foot razor ribbon fence around it and guard towers at all four corners. You improve the value of the property by turning it in to something useful and you get all of the Chicago criminals in one place. In return the Cubs can go play at some AAA park commensurate with their overall quality.

Comment by NimROD Friday, Dec 14, 07 @ 11:41 am
Now, seriously. Isn’t this plan coming from the same guy who previously tried to sell such state assets as the Thompson Center and Tollway headquarters? Is our beloved King Rod actually thinking about the good of the taxpayers of Illinois? Maybe he’s thinking about what’s good for Cubs fans? Or maybe he thinks he can put wheels on Wrigley Field and use it to transport the thousands of people who will need some way to get downtown when the CTA cuts all those bus routes in January? More likely he’s thinking about what’s good for (Unindicted Official) A-Rod, since he loves wearing his mitt and Cubbie hat and sitting right near the dugout so he might catch a foul ball.
I just don’t know. What is HE thinking?

Comment by The Mad Hatter Friday, Dec 14, 07 @ 11:43 am
===It is taking Wrigley Field out of the sale, transferring it over to the State. This allows the price for the Cubs to be lowered to the point that the Canning group can buy it cheaper.===

That would be a subsidy.

Comment by Rich Miller Friday, Dec 14, 07 @ 11:46 am
One more thing. I’m looking for investors to help me buy the Cubs. We’ll be moving the team to South Dakota so (Unindicted Official) A-Rod will still be able to watch live games from his prison cell in Yankton.

Comment by The Mad Hatter Friday, Dec 14, 07 @ 11:48 am
Reading is FUNdamental.

The following sentence:

“If the State were to purchase it for $200-$300 million, that could be seen as subsidizing the Canning Group. But if the State gets it for $1, then you can’t make the same argument.”

Comment by GoBearsss Friday, Dec 14, 07 @ 11:48 am
Sure you can. Especially since the state will be on the hook for repairs and upgrades.

Comment by Rich Miller Friday, Dec 14, 07 @ 11:50 am
Big Jim Thompson, former Republican governor of Illinois, bequeather of free defense to now imprisoned former Republican governor of Illinois, great pal of and spokesman for current Democrat governor of Illinois. To think this guy got his start investigating and prosecuting the sacrificial lambs among many corrupt public officials …

Comment by Snidely Whiplash Friday, Dec 14, 07 @ 11:57 am
It is only your White Sox pride that sees Wrigley as a liability. Everyone else values it in the hundreds of millions of dollars.

Look - your premise is wrong. Zell could get hundreds of millions more by selling Wrigley with the Cubs.

The argument of whether the State should buy it is separate.

In the end, this is a maneuver for MLB to get a preferred ownership group selected. That is the point I am opposed to, and that’s why I don’t like this deal.

But that still means your premise is just incorrect.

Comment by GoBearsss Friday, Dec 14, 07 @ 11:58 am
Wrong again. This bond thing intrigues me. CS-T reported that Zell would get the money. If they’re wrong, then he’s in line for a huge tax break. That’s also a subsidy.

Comment by Rich Miller Friday, Dec 14, 07 @ 12:09 pm
I think I need a drink, I agree with Bill!

Comment by Leigh Friday, Dec 14, 07 @ 12:17 pm
- Gene Parmesan - Friday, Dec 14, 07 @ 11:21 am:
A Citizen, are you kidding?
Gene, Of course I am kidding. I would much rather invest in Ryan. :.) But seriously if we are going to own casinos, or Chicago is, why not baseball teams? Why stop at just the ballpark?

Comment by A Citizen Friday, Dec 14, 07 @ 1:17 pm
-Bill-
Condos, okay. But doing that to Wisconsin could lead to a war between the two states.

Comment by A Citizen Friday, Dec 14, 07 @ 1:33 pm
A Citizen, you’ve got to stop joking around about this stuff, someone might start seriously thinking about the city owning the team. Think of all the contracts city hall could sell out for beer vendors, licenses, etc. The kickback potential is through the roof. Imagine all the patronage employees slinging brews at the speed of snails. This could be a gold mine. You could even have patronage workers on the infield. I can just see a Daley cronie manning third base for $14 million a year.

Comment by Gene Parmesan Friday, Dec 14, 07 @ 1:45 pm
- Gene Parmesan -
It could mean job security for Fitz until he retires.

Comment by A Citizen Friday, Dec 14, 07 @ 2:02 pm
If the deal was done thru revenue bonds, with the revenue stream coming from rents paid by the team, and the lease was for the period of the bonds, then I don’t see any problem with it at all; I don’t even think it would matter whether the State owned it or not. Key would be what coverage the investors wanted, and whether the revenue stream covered that, and who would be on the hook if it fell apart. You could cover that with a TIF for the limited purpose of covering any shortfall.

Comment by steve schnorf Friday, Dec 14, 07 @ 5:51 pm
Michele, most “hotel taxes” aren’t paid by the innkeepers. They are paid as occupancy taxes by everyone who stays in a hotel in the city. Chicago already has a relatively high tax, in part to pay for McPier. Raising the tax for anything, especially the Flubs, ick, makes Chicago harder to market to conventions/tourist groups. AA agrees with YDD. Quicktake the real estate and rezone it. I was thinking the Channahon Cubs had a nice ring to it, personally.

Comment by Arthur Andersen Friday, Dec 14, 07 @ 6:09 pm
As a person responsible for organizing and selling TIF bonds supported by in excess of $1.6 Billion in private sector investment, all I can say is a Redevelopment District surrounding Wiggily Field would be a breathtaking misuse and might not even be supportable from increases in property tax revenue at Wiggily.

By the way, as I undertstand it (and I had nothing to do with that issuance) the sweetheart Reinsdorf lease (dependent on revenues from increased rentals based on increased attendance) forced the Sports from the Authority to go after other revenues which had been put up almost as an afterthought — it almost was the knell for the Cell which was not well.

Comment by Truthful James Monday, Dec 17, 07 @ 11:31 am