Chicago Bears' stadium costs? Add another $1.2 billion, with refinancing debt pushing total to $6.9 billion

Chicago Bears

The Bears' pitch for a new domed lakefront stadium came with a $4.7 billion price tag. In reality, though, Chicago and Illinois taxpayers would end up paying $5.9 billion to help the Bears build and finance the stadium and retire existing debt used to renovate Soldier Field and Guaranteed Rate Field, where the White Sox play.

Add to that the $1 billion already paid to revamp Soldier Field and Guaranteed Rate Field, and the overall cost to taxpayers is $6.9 billion, says Frank Bilecki, executive director of the Illinois Sports Facilities Authority.

The higher costs were gleaned from figures provided by the Bears during their initial meeting with the stadium authority and in follow-up conversations with the team, Bilecki said.

The Bears made "a thoughtful presentation on their plans for the new stadium and surrounding property along Chicago’s lakefront," Bilecki told the Sun-Times. "This included high-level financial information. ISFA looks forward to further discussions with the Bears to gain a clear understanding of their assumptions, payment schedules, interest rates and more.”

During those discussions, Bilecki added, ISFA will "review financial models" using "the lens of what is the most fiscally responsible plan for taxpayers."

Although a new domed stadium would be built on lakefront parkland and owned by the Chicago Park District, the Bears are also seeking to dramatically sweeten for themselves the terms of a stadium lease that has been an almost constant source of contention between tenant and landlord over the years.

“They’re asking to keep all of the revenue from other events that might take place at the stadium,” Gov. J.B. Pritzker said Thursday. “If there’s a Beyonce concert, they want all of that revenue, too, and everything else that might happen there. There are aspects of this that are probably non-starters.”

Pritzker went further on Friday: “The deal that was presented didn't take into account that taxpayers really aren't going to do well under that proposal.”

From the beginning, the governor has thrown cold water on the Bears’ plan to replace Soldier Field with what they have billed as a $3.5 billion domed stadium on the site of the Waldron parking deck south of the existing stadium.

The governor wasn't there when the Bears and Mayor Brandon Johnson, the project’s No. 1 cheerleader, showcased renderings of the new dome, designed by architect David Manica.

In fact, Pritzker has yet to even meet with the Bears. Illinois House Speaker Emanuel “Chris” Welch, D-Hillside, has held several meetings with the Bears and came away saying that any stadium financing plan would “fail miserably” if put to a vote during the spring session, as the Bears intend.

Illinois Senate President Don Harmon, D-Oak Park, has also been skeptical, while acknowledging the Bears’ offer to contribute $2.3 billion to help build the lakefront stadium is a “more credible opening offer.”

Under the existing Soldier Field lease, the Bears pay roughly $7 million in annual rent and pocket all game-day revenue from tickets, concessions, merchandise and 4,250 parking spaces. The Park District collects on the remainder of nearly 8,000 parking spots.

On non-game days, including concerts, soccer matches and college football games, the talent keeps ticket revenue and the Park District gets all food and beverage and parking revenue.

“If you strip away the second leading source of revenue for the Park District, you couldn’t make capital improvements to the parks. You couldn’t even operate without raising taxes through the roof. You would devastate the Park District,” said a source familiar with the existing lease.

That revenue amounted to a bonanza last summer when Taylor Swift played to sold-out crowds for three nights, with thousands more Swifties camping out and buying merchandise and refreshments outside the stadium.

Beyonce also played Soldier Field for two nights last summer to sold-out crowds that included Bears President Kevin Warren. He made future concerts part of his pitch for a domed stadium, which would prevent any weather-related cancellations.

”There are many entertainers who would look toward coming to our new stadium to be able to do an in-house residency,” Warren said Wednesday. “Instead of coming for two days, they may come for 20 days.”

At the Soldier Field news conference, Warren said he simply wanted lease terms “fair” to both sides. He refused to pinpoint what he viewed as unfair in the current lease during a somewhat contentious meeting with the Sun-Times editorial board Thursday.

The Bears want ISFA to issue $1.2 billion in new debt to be repaid over 40 years, backed by the same 2% tax on Chicago hotel rooms used to build Guaranteed Rate Field and renovate Soldier Field.

The $1.2 billion would be enough to plug a $900 million gap — even after the Bears contribute $2 billion of their own money and add a $300 million loan from the NFL — and create a $160 million reserve fund that would shield the city from dramatic drops in the hotel tax.

Whenever hotel tax revenue fails to grow at 5.5% a year, Chicago taxpayers must make up the difference. That’s happened three times, and twice in the last three years. The biggest deficit was $27.3 million in 2022.

Part of what made the proposed stadium deal so attractive to City Hall was that Chicago taxpayers would be held harmless, according to Jill Jaworski, the city’s chief financial officer. Also making the deal attractive was the relief from balloon payments on Soldier Field debt, set to grow from $56.7 million this year to $90.5 million in 2032, the year those bonds are scheduled to be retired.

When 40 years of projected interest rates are factored in, the overall cost of the new stadium borrowing rises to $4.8 billion.

Chicago taxpayers are still on the hook for $629.3 million in principal and interest for the Soldier Field renovation and the Guaranteed Rate Field remodeling. The Bears’ new proposal calls for refinancing $430 million in principal for those two projects.

Those costs — with interest — total $1.08 billion. That’s an additional cost to taxpayers of $650 million.

The overall cost to taxpayers jumps to $6.9 billion when the $1 billion in payments already made on Guaranteed Rate Field and Soldier Field are taken into account. It’s much like the sticker shock to consumers who think they’re buying a $40,000 car and learn the grand total paid was a whole lot more after financing costs are factored in.

A source familiar with the Bears stadium financing deal said the team's numbers are "in the same zip code" as those provided by the stadium authority. But, the source stressed that the bonds would be retired by a hotel tax largely paid by out-of-town visitors to Chicago and that a similar tax on hotel rooms bankrolled stadiums for the Dallas Cowboys and Las Vegas Raiders.

The Bears source further noted that the "net debt service" on the new borrowing would be "closer to $5.4 billion" when factoring in interest earned on the so-called "liquidity reserve fund."

Bilecki said it was important for "decision makers, taxpayers and everyone to understand the entire financial picture being presented. When we consider this is taxpayer dollars — as many of our leaders across the city, county and state have said — dollars are precious right now. Making sure they’re put toward the right projects is going to be important.”

Chicago-based sports marketing consultant Marc Ganis, who has advised numerous NFL and Major League Baseball teams on stadium financing, said the Bears’ lease demands are “not unusual” even for a domed stadium that would remain publicly owned.

“If a team is going to put $2 billion-plus into a stadium, they are expecting to take most of the revenues from the building — both from their events and from the other events,” Ganis said.

Ganis pegged the annual cost of operating and maintaining a domed stadium at “a minimum” of $25 million and “probably closer to $35 million or $40 million-a-year.”

“If it’s the team” that’s responsible for operations and maintenance, “they would be expecting to be able to offset a lot of the costs from the other events that take place,” he said.

The Bears are also counting on selling naming rights to the new stadium. But those terms haven’t been finalized either.

“The traditional way it’s done is that the team retains most and sometimes all of the naming rights to the building,” Ganis said. “But often, there’ll be a split as well” with 10% to 20% going to a “government entity.”

Ganis said what was extraordinary about this week’s stadium proposal was the fact that Johnson has enthusiastically signed on without hammering out lease terms or finalizing other important details.

“As a taxpayer, that wasn’t a good look. And I’m being charitable here because that’s the person who would set the negotiating tone. That’s the person who would be telling his staff to negotiate harder. Instead, he’s saying, `Don’t worry about it,’ “ Ganis said. “ I don’t really want to be insulting our mayor. But that was an odd, odd position for him to be expressing at that press conference.”