COMPTROLLER'S CORNER The Financing Of A New Multi-Use Entertainment Facility In Chicago By Loleta A. Didrickson, Comptroller, State of Illinois

The recent debate over the home playing field for the National Football League's Chicago Bears has raised the question of whether Illinois government should help finance the construction of a multi-use entertainment facility in Chicago. The State of Illinois and the City of Chicago have already shared the cost of financing the construction of entertainment/convention facilities in Chicago. And Illinois' Governor has a proposal that will finance a new multi-use entertainment facility without raising taxes.

The Governor recently floated his plan for a McCormick Place expansion that combines financing from the City of Chicago, the State, the Bears' owners and surplus debt service revenues from the past expansion of a McCormick Place project.

Specifically with this plan, the Bears and Metropolitan Pier and Exposition Authority (McPier) would share the cost of constructing the center to the tune of $175 million and $185 million, respectively. In addition, the McPier Authority would construct and operate a $50 million parking garage and keep the revenue from it. McPier would also contribute $5 million in construction-related administration costs.

The McPier Authority would fund its share from the existing taxes levied for the McPier Expansion bonds which are primarily from Chicago tourists. The Governor's proposal estimates that a surplus from debt service dollars that support the Authority's bonds will be enough for the venture.

Other portions of the Governor's plan say Chicago and the state of Illinois would contribute $25 million each for land acquisition and infrastructure costs.

The City of Chicago Soldier Field renovation proposal is the other option on the boards. It would cost $156 million and expand stadium capacity, add luxury boxes and club seats and modernize stadium amenities. Debt service for $100 million of the bonds would come from club seat annual fees, the sale of permanent seat licenses, concession fees and a contribution from the Bears. Financing for the remaining bonds would come from Chicago Park District revenues.

So what benefits would a new multi-use entertainment facility have for Illinois? In 1990, a study was done by the accounting firm of KPMG Peat Marwick to estimate the economic impact of a domed stadium addition to McCormick Place. Besides sporting events, the study assumed the new facility would attract a variety of convention and assembly events to Chicago which currently cannot be accommodated due to a lack of adequate facilities.

The study predicted the new facility would be in use 117 days during an average year and would attract an estimated 900, 000 new attendees to the McCormick Place complex. New events attracted to the dome might include additional large conventions, national assembly events such as a major fraternal or religious organization, national sporting events requiring indoor stadiums with large seating capacities and additional entertainment events.

Based on these assumptions, attendee spending on new entertainment facility events would be $142 million including $94 million in "new" money that would not otherwise be spent in the Chicago area. The facility would add 2, 700 jobs and $388 million to the state economy. This additional economic activity would generate $12.4 million in added state revenue and $8 million in added local government revenue.

If the decision is made to provide public financial support for a new stadium in Chicago, every effort should be made to maximize the benefit of that facility to the state economy. Two factors that will increase the benefit of the facility to the economy are being able to attract as many out-of-state attendees to events held at the facility as possible and maximizing the use of local workers, vendors and contractors in the construction and operation of the facility. •

March 1996 / Illinois Municipal Review / Page 25