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Bloomberg Television12 min

The Stadium Bidding War Shaking Up the Midwest

Mitch Daniels, State Representative Cam Buckner, Tom McDermott

Interview
  • The Chicago Bears, the seventh most valuable NFL franchise and an original 1920s team, face a lease expiration at Soldier Field in 2033, triggering a high-stakes "auction" for its next permanent home.
  • Three primary locations are competing to host the new stadium: a rebuilt facility on the current Soldier Field site, a new arena in the Chicago suburb of Arlington Heights, and a proposed complex in Hammond, Indiana.
  • The all-in financial projection for the new stadium reaches $5 billion, with the core economic debate centering on the "incremental" revenue the facility would generate rather than total spending.
  • State Representative Cam Buckner questions the fungibility of stadium spending, asking whether fans spending money at games would otherwise spend those same funds in other Chicago neighborhoods if the game were not available.
  • Hammond, Indiana Mayor Tom McDermott notes it took over a decade to assemble the necessary acreage for the project, a move originally intended for city cleanup and Wolf Lake access before the Bears' interest emerged.
  • Indiana Governor Mitch Daniels, who oversaw the Lucas Oil Stadium project, argues that public subsidies are rational only when projections account for diverse revenue streams, noting that over 90% of events at Lucas Oil were non-football conventions.
  • Daniels cites the Edward Jones Stadium in St. Louis as a cautionary tale of poor business judgment, where the stadium's bond debt remained unpaid after the Rams relocated, contrasting it with successful models like SoFi Stadium.
  • Critics warn that politicians often treat stadium deals as ego-driven auctions where the last 10% of bidding is driven by pride rather than fiscal logic, risking the public checkbook.
  • A proposed Hammond financing model includes a 12% admissions tax on tickets, a 1% food and beverage tax in Lake County, and a doubling of the innkeeper's tax from 5% to 10%.
  • In the Hammond deal, the State of Indiana retains control of the project board (2 out of 3 members) and assumes the financial risk for any bond shortfalls in exchange for financing the land acquisition.
  • The economic comparison hinges on tax certainty: Indiana offers constitutionally enshrined property tax stability, whereas Arlington Heights' long-term tax relief is not permanent.
  • The Bears stand to make significantly more money in Hammond than in any Illinois location due to these structural tax advantages, creating a financial gap that Illinois must bridge to retain the team.
  • While Illinois officials aim to present a "fiduciary" package that allows the Bears to stay, Hammond officials argue that any Illinois match to Indiana's $1.5 billion offer would still result in the Bears losing money annually over a 35-year horizon if they remain in the state.
  • Local leaders in Hammond anticipate that the stadium deal will catalyze commercial development previously out of reach, such as attracting major national chains like Ruth's Chris Steakhouse.
  • The decision involves a tension between emotional fan desire for the team to remain in Chicago and fiscal responsibility, as taxpayers generally oppose funding the project despite wanting to retain the franchise.