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The Chicago White Sox want $1 billion from the state of Illinois for a new stadium. White Sox owner Jerry Reinsdorf would like you to hear his reasons.
It’s nothing you haven’t heard before.
The modern state of stadium funding applications can be divided into three statements:
1. “Our stadium will inject life and money into the area” (a resource that goes back decades)
2. “We want to own the real estate around our stadium” (the Atlanta Braves managed to get it; the Baltimore Orioles did not)
3. “We might have to move if there’s a better offer elsewhere” (the Oakland Athletics are in the process of ruining this)
Reinsdorf, as expected, went 3 for 3 while speaking with Crain’s Chicago Businessthe outlet that broke the news that the White Sox were seeking a 10-figure sum to complement their proposal to replace Guaranteed Rate Field with a new stadium at The 78 site in the South Loop.
Jerry Reinsdorf: Giving White Sox $1 billion will be good for Chicago and Illinois
In the first charge, Reinsdorf stated that the new stadium would “anchor” a property that would generate a projected economic impact of $4 billion and $200 million in tax revenue:
“At the end of the day, the benefit to the city and state will outweigh the cost,” Reinsdorf said. “This is not (just) a baseball stadium. “This is a development of which the stadium is the anchor.”
Numbers like these, conveniently provided by real estate developer Related Midwest, are a tantalizing prospect for a city and a state. Unfortunately, economists I have long been skeptical about these types of claims for a variety of reasons..
A stadium helping to raise $4 billion sounds good, but that money spent often comes from another part of people’s budgets. Think of a family choosing between a game or bowling, or friends choosing between a game and going to a bar. There’s also the question of opportunity cost, since many people likely have other ideas about how Chicago could use a billion dollars if it’s on the line.
Jerry Reinsdorf: Shohei Ohtani’s contract scares us
On the real estate issue, Reinsdorf said his team couldn’t survive in a world where the Los Angeles Dodgers are giving Shohei Ohtani $700 million:
“The economics of baseball have completely changed,” with top players signing contracts worth up to $700 million, Reinsdorf said. “In the location we’re in right now, we can’t generate the revenue necessary to pay those salaries,” Reinsdorf said, referring to the team’s residential headquarters in Bridgeport. A new space in a livelier downtown area with shops, bars and other entertainment venues within walking distance should work better, she maintains.
Reinsdorf denied that the real problem is his team’s poor performance. Even after winning the World Series in 2005, “we didn’t break the 3 million (attendance) mark,” something Series winners routinely achieve.
Perhaps at this point we should point out that the largest contract Reinsdorf has ever awarded as owner of the White Sox is Andrew Benintendi’s five-year, $75 million extension. Reinsdorf is clearly implying that his team could play with the big hitters if he had that much real estate income, something you’ll have to trust him with.
The Washington Nationals have also never surpassed 3 million in attendance, but they have still paid out some massive contracts, such as Max Scherzer and Stephen Strasburg. The Houston Astros surpassed 3 million for the first time since 2007 last year.
Jerry Reinsdorf: Chicago must be prepared for the death of Jerry Reinsdorf
Reinsdorf takes a somewhat original path regarding the possibility of moving elsewhere, but that could only be due to the fact that he already played this card in the 1980s, when he lobbied for financing for what became the Guaranteed Rate Field, the stadium that currently houses. now trying to leave.
You see, the reason the government should give Reinsdorf a billion dollars is because Reinsdorf will probably die soon, and he just doesn’t know what those other billionaires will do when he’s gone:
Noting that he is about to turn 88, Reinsdorf said that “when I’m gone,” his son Michael Reinsdorf, president of the Chicago Bulls, which is also family-owned, “will have an obligation to do what’s best” to other investors in the Red Sox. “That probably means putting the team up for sale… The team will be worth more outside the city.”
And that’s pretty much the game. The White Sox want more money and are offering the carrot of even more money coming back to Chicago if they get it and the stick of becoming, say, the Nashville White Sox if they don’t.
Whether that’s enough to move the Illinois government is another question. The White Sox are reportedly proposing that Illinois extend a pre-existing 2% hotel occupancy tax beyond its planned expiration date of 2034, when it was supposed to have paid for the renovation of the Chicago Bears’ Soldier Field in 2003. That tax was already struggling to cover the Soldier Field Bond due to the COVID-19 pandemic. The White Sox would also reportedly like to receive authority to claim sales tax generated in their new district (which could conflict with the first point above).
We also can’t forget the $551 million in needed infrastructure improvements (CTA Red Line stop, street improvements, etc.) that Related Midwest will cover and that Chicago will reimburse.
Making all of these requests even more difficult is the presence of the Bears, who are currently pursuing their own attempt to secure a new stadium subsidized by the local government. Reinsdorf told Crain’s that he has had “conversations” with the McCaskey family that owns the Bears and that he doesn’t “want to compete with the McCaskeys.”
Still, if you have to choose, the Bears are the only Chicago team in the NFL. The same cannot be said for the White Sox in the MLB.