Cook County Treasurer Maria Pappas released a “study” last week about the state megaprojects proposal, including a new Bears stadium complex that was mostly uncritically received by local news media. But it’s not her best work, to say the least.
OK, before we go any further I should say I find corporate tax breaks distasteful and even sometimes counterproductive. I have no official or personal position on a deal to move the Chicago Bears to Arlington Heights (except for my personal hatred of Indiana). It’s just that “studies” like this make me cringe.
The report mainly focuses on the big bucks the Bears will save on their property tax bills if they move to the suburbs, which is pretty much the whole point of corporate subsidies.
Rep. Kam Buckner, D-Chicago, had the most obvious critique of the Pappas study.
“You can’t count full tax revenue from a project that doesn’t exist, may never get financed, may get tied up in court, or may go to another state,” the lead House megaprojects sponsor posted on social media. “The real choice is not ‘full taxes versus reduced taxes.’ The real choice is a negotiated payment on a real project, or full taxes on an empty lot.”
But that part of the Pappas report is just the usual critique of corporate subsidies, and while it’s not necessarily wrong, it simply refuses to accept the validity of corporate subsidies and goes for the “wow” factor to grab headlines, like this one from WTTW: “‘Megaprojects’ Bill Would Mean a $39M Annual Property Tax Break for Bears.”
Or, as Buckner said during a radio interview, “The report largely compares the bill against a fantasy baseline, where every project magically gets built and pays full taxes forever.”
To me, though, a big problem with Pappas’ report is it conveniently ignores or breezes past a few very important things:
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From the Pappas report about studies done on stadiums across the country: “Sports venues’ positive economic spillovers typically were confined to a relatively small area around the venue.”
But Pappas’ report fails to point out that the vast majority of the 326 acres of currently vacant Arlington Heights land will be developed into a year-round entertainment district, with hotels and other stuff. None of that land will be included in the megaproject district, so whatever is built will be assessed like any other property. And those additional property taxes could be a boon to the area.
As Pappas reports, Wrigley Field’s 2024 property tax bill was $3.9 million. But more than $10 million in property taxes were paid by “the team’s various other buildings around Wrigleyville.” I’m not saying the exact same thing will happen in Arlington Heights (the Pappas study estimates about $14 million a year in payments for the Bears stadium alone), I’m just saying it could be a lot of new money and that Pappas didn’t even bother to acknowledge it, even though the local governments are quite excited by this possible additional revenue stream.
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The Pappas report asks: “Should the Illinois bill become law, one key question will remain: Would the amount of property taxes the team and any other megaproject developers end up paying be enough to cover the increased costs of education and other local services made necessary by their projects?”
But the report also very briefly mentions that all local governments including school districts would have weighted votes on approving the “payment in lieu of taxes” terms and amounts. Arlington Heights schools will have half the weighted vote based on taxes received. In most areas, school districts will have 60% of the weighted vote. More importantly, the legislation protects school district budgets from unforeseen expenses.
The state’s Department of Commerce and Economic Opportunity is also involved in the approval process, and all the other legal hoops that companies must clear probably lessens the likelihood of a “monorail scam.”
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The report basically advocates for letting Indiana build the new stadium complex. Hammond is closer to Soldier Field than Arlington Heights, the study points out. That’s apples to oranges because one could argue that the team’s season-ticket holders live closer to Arlington Heights than Hammond.
The Indiana deal is obviously bad for their taxpayers, so Pappas suggests letting them pay for it if they’re gonna be so gullible.
But that seems more like advocacy than an actual study. And it ignores what a huge national spotlight on a very prominent Illinois entity moving across the border could trigger. If the Bears can do it, why not others?
Again, I rarely go to Bears games so I really don’t care where they play. But I don’t claim my personal opinion is data.
Rich Miller also publishes Capitol Fax, a daily political newsletter, and CapitolFax.com.