UChicago students propose solutions to city's sports stadium conundrum

From Springfield to Indianapolis, the debate over sports facilities is reaching a fever pitch as lawmakers vie for the Bears to build a new stadium in their backyard.

Similar conversations were had last week in Hyde Park as students at the University of Chicago’s Harris School of Public Policy gave their final pitches in the Harris Policy Innovation Challenge — tackling the issue of stadium policy in Chicago.

The annual contest, launched in 2023, pushes students to find solutions to some of Chicago’s most pressing public policy issues. Finalists are selected to present at a live pitch event, “Shark Tank”-style, and the winning team receives $10,000.

This year, students were asked what Chicago’s official policy for supporting professional sports teams and facilities should be.

Winners Charlie Schraw, Christine Tsai and Liz Williams presented judges with a three-pronged approach: create a new stadium securitization corporation, require a community benefits agreement for stadium developments and enforce sustainability standards.

The stadium securitization corporation is modeled after Chicago’s Sales Tax Securitization Corp., which was established in 2017.

The stadium corporation would issue bonds strictly for developing the public infrastructure necessary for stadiums, according to the team’s presentation. It would serve as a bankruptcy-remote entity that separates stadium liabilities from the city’s general credit, according to the team.

Those funds would be lockboxed, meaning restricted to the corporation, resulting in lower interest rates on corporation debt, ultimately leading to declining stadium debt, Tsai said.

“The SSC provides a cost-saving framework for funding public infrastructure that's necessary for these stadium deals,” Tsai said during the event. “Having a plan in place allows the city to come to the negotiating table with discipline and leverage — not desperation — and this leverage is what allows the city to negotiate better deals for Chicagoans.”

Reforming the city’s community benefits agreement process was also important for the team, whose presentation was titled “Structuring the Deal.” The team argued their process, which would require a signed CBA before city bonds are issued, would prioritize Chicagoans in stadium deals.

Schraw said the team’s CBA model came from looking at projects in Chicago and beyond, including the Obama Presidential Center and the new Highmark Stadium for the Buffalo Bills. Those agreements require minority- and women-owned businesses to be involved in construction, in addition to hiring locally.

“Something that made our proposal really strong is that we had these considerations that oftentimes are seen as aspirational, in terms of community impact and sustainability, but within our proposal, these actually have teeth,” Williams said. “What really drove us to that is … this tension between the fans and the teams themselves. The fans love these teams, but what are they getting back from them? And we wanted to ensure that that relationship was truly a two-way street.”

Paired with the CBA are additional sustainability requirements that must be met for the stadium securitization corporation bonds to be issued. Stadiums must align with the city’s Climate Action Plan and produce annual public reports on their energy, water and waste for the duration of the lease. If the stadium is part of a megadevelopment, the requirements would include the entire project — not just the sports arena.

Williams said while her team’s proposal may slow down negotiations or push teams away, it includes important factors for both the long-term use of stadiums and Chicago’s reputation as a sports city.

“This framework is for all leagues. When we imagine the Bears, we are also trying to imagine small women's sports leagues. We're also trying to imagine leagues that would grow over time. We're trying to imagine expansion, and that this would then apply to teams both big and small,” Williams said. “We really hope that this plan, these conditions and our enforcement mechanisms ensure that teams ... would actually take care of [fans] and pay them back. We would hope that a team like the Bears and the love that Chicago has for them would recognize that, and all of these conditions are just to improve the community, the durability and the accessibility of their stadium.”

Other proposals included instituting public referendums to trigger public stadium subsidies and a long-term restructuring of Soldier Field’s ownership structure and requiring sports teams to sell a small, minority equity stake to the city through a new Chicago Sports Authority.

Justin Marlowe, research professor at the University of Chicago and director of the Center for Municipal Finance, noticed a theme of rethinking stadium governance structure among the three finalists.

“I think for many people that's the issue: It's seen as this black box ... as something that’s sort of negotiated behind closed doors,” Marlowe said. “What this proposal does … is really center the community in that discussion. What [the winners] did in particular was deliberately blur the lines between community and fans, and essentially make the case to teams that, in fact, it's in your interest to be accommodating to the community and mindful of the community's needs because that's what sustainability for a fan base means in the long run.”