Bloomberg Television12 min
The Stadium Bidding War Shaking Up the Midwest
Mitch Daniels, State Representative Cam Buckner, Tom McDermott
Interview
- The Bears' lease at Soldier Field is set to expire in 2033, creating a window for a potential relocation decision.
- Financial projections indicate the team would lose money annually for 35 years if remaining in Illinois, whereas moving to Hammond, Indiana, is expected to generate significantly higher revenue.
- A new stadium in Hammond is estimated to carry an all-in price tag of up to $5 billion, financed through a 12 percent admissions tax, a 1 percent food and beverage tax, and an increase in the hotel innkeeper's tax from 5 percent to 10 percent.
- State financing would be managed by a three-member authority board where two-thirds of the seats are held by Indiana officials, with the state expected to absorb any financing shortfalls while retaining the expectation of repayment.
- Multiple relocation scenarios are considered viable, including staying in the 26th district of Chicago, moving to Arlington Heights, Evanston, the current downtown site, or crossing into Hammond.
- Staying in Illinois requires the creation of economic value without taxpayer liability, whereas a move to Indiana relies on permanent property tax relief, state partnership, and state funding to be financially rationalized.
- Political and regulatory risks include the possibility of politicians shifting financial burdens to future generations, the Bears engaging in "ego-driven" bidding wars, and the uncertainty of securing favorable long-term tax terms.
- The business case for public investment in Indiana draws parallels to the Lucas Oil Stadium model in Indianapolis, anticipating strong tax revenue and economic activity to service the debt.
- The Bears, currently valued as the seventh most lucrative team in the league, may leverage the risk of moving to Indiana or back to Los Angeles to negotiate favorable terms with Illinois.
- A decision will likely balance emotional ties with economic rationality, potentially requiring a "runway of options" within Illinois to ensure fiduciary responsibility if the environment becomes unfavorable.
- Specific outcomes in Hammond could include new amenities like a Ruth's Chris Steakhouse, contingent on the closure of a deal that leverages lower taxes and a better regulatory environment.
- If no stadium deal is reached, the projection suggests zero new activity, contrasting with the potential for substantial economic development if the project proceeds.