White Sox/Bears Stadium Showdown

[The Hippie Satan of Hyperbole]

Here's a very "creative" idea.

The Bears are worth about $6.3 billion. They're probably worth about $9 billion or more after a new stadium.

Assuming the Bears have less than $1 billion of total operating debt (lines of credit, fixed operating loans and loans on the Halas Hall facility), why not put up about $500 million of the family's money, plus a contribution from the NFL of say $400 million.

That's $900 million of cash with the remainder secured by the franchise. Go to Goldman or some other money center lender and borrow the rest. Get a five-year lock-out against prepayment and issue bonds secured by the revenue of the franchise. Should be able to borrow pre-tax in the 6 percent to 7 percent range.

Problem solved. Get your piggy backside out of the public trough, Bears!

They should have cut a deal with the school districts on the Arlington Heights site. Their power play failed spectacularly.

Go back to them and offer their last offer. No need to borrow anything for a bad lakefront proposal.

[WhiteTrash]

They should have cut a deal with the school districts on the Arlington Heights site. Their power play failed spectacularly.

Go back to them and offer their last offer. No need to borrow anything for a bad lakefront proposal.

Sure looks AH called their bluff. You've got to think the AH folks are pissed and if the Bears walk away from the work done with the City, Chicago is not going to be happy.

Gary Bears has a nice ring to it. 

[The Hippie Satan of Hyperbole]

Sure looks AH called their bluff. You've got to think the AH folks are pissed and if the Bears walk away from the work done with the City, Chicago is not going to be happy.

Gary Bears has a nice ring to it. 

AH was always the best site. The school districts knew it and had them by the short hairs.

[DegenerateDish]

The Bears will eventually end up in Arlington. It may take longer to get there, but I’m confident it will happen. Arlington Heights is playing their cards right and being patient.

I’m not sure where the Sox end up.

Caveat here is both franchises will be sold in the next few years (unless Virginia keeps finding the fountain of youth).

[dgies9156]

The more and more I watch this, the more I realize the school districts are a convenient scapegoat.

Yes, the Districts are obnoxious and yes we in here have a difference of opinion on their efficiency, but the real issue is shareholder return and expectation for the Bears being a capital gain or an income play, not the school taxes.

If I had to guess, the principals in the Bears organization do not want to sell for many, many years, if ever. They view the Bears as a continuing source of dividend income and, to some degree, employment. While I have no idea whether that's universal in the McCaskey family, I'm betting the folks closest to the team have no interest in selling at least until such time as the stadium is complete and its event potential fully realized.

Building a stadium will, on the short-term, depress total return due to debt service requirements while the project is underway and no revenue is being generated. Once completed, the stadium will take time to reach its full revenue and profitability potential. The investment will tie up dollars that could otherwise be used to reward shareholders.

The move to get the state and city to pny up is simply a move to have cake and eat it simultaneously.

[MUBurrow]

Building a stadium will, on the short-term, depress total return due to debt service requirements while the project is underway and no revenue is being generated. Once completed, the stadium will take time to reach its full revenue and profitability potential. The investment will tie up dollars that could otherwise be used to reward shareholders.

Right, this.  I'm sure there are pre-negotiated exceptions, but my understanding is that properties are almost always reassessed at the sale price after closing.  Its not like AH got greedy and was trying to reassess above purchase price - they just said "we're going to assume that an arms length sale is the best indicator of value and set the assessment there," which from what I know is a standard practice.  If the Bears thought they were going to get an assessment significantly below their closing price, they were grossly negligent to not have investigated that beforehand, and are now acting in bad faith.

[Pakuni]

Right, this.  I'm sure there are pre-negotiated exceptions, but my understanding is that properties are almost always reassessed at the sale price after closing.  Its not like AH got greedy and was trying to reassess above purchase price - they just said "we're going to assume that an arms length sale is the best indicator of value and set the assessment there," which from what I know is a standard practice.  If the Bears thought they were going to get an assessment significantly below their closing price, they were grossly negligent to not have investigated that beforehand, and are now acting in bad faith.

Just a quick clarification ... Arlington Heights is not involved in assessing the property. That's determined initially by the Cook County Assessor and then (with the inevitable appeal) the Cook County Board of Review.
In this case, the Assessor set the value at $192 million, based largely on the Bears $197+ million purchase price.
The Bears appealed, arguing for $60 million, and the Board of Review lowered the assessment to $124.7 million.

And, for the record, those greedy, obnoxious school districts have offered a deal which would either lock in the assessment at $135 million for the next five years, or set it at $115 million this year and $125 million next. The Bears rejected it.

[The Hippie Satan of Hyperbole]

Just a quick clarification ... Arlington Heights is not involved in assessing the property. That's determined initially by the Cook County Assessor and then (with the inevitable appeal) the Cook County Board of Review.
In this case, the Assessor set the value at $192 million, based largely on the Bears $197+ million purchase price.
The Bears appealed, arguing for $60 million, and the Board of Review lowered the assessment to $124.7 million.

And, for the record, those greedy, obnoxious school districts have offered a deal which would either lock in the assessment at $135 million for the next five years, or set it at $115 million this year and $125 million next. The Bears rejected it.

Yet will be paying taxes on the $124.7 million figure anyway. None of how the Bears have managed this makes much sense to me.

[MUBurrow]

Just a quick clarification ... Arlington Heights is not involved in assessing the property. That's determined initially by the Cook County Assessor and then (with the inevitable appeal) the Cook County Board of Review.
In this case, the Assessor set the value at $192 million, based largely on the Bears $197+ million purchase price.
The Bears appealed, arguing for $60 million, and the Board of Review lowered the assessment to $124.7 million.

And, for the record, those greedy, obnoxious school districts have offered a deal which would either lock in the assessment at $135 million for the next five years, or set it at $115 million this year and $125 million next. The Bears rejected it.

Doh! Big whiff by me missing that assessments are at the county level.  And thanks for the additional detail, which actually is an even worse look for the Bears.