First time posting in a long time because this drama has been the first time I have given the Sox more than two seconds of thought in years.
JR is asking for lots of money, but the debate is missing the point. I have been mostly negative on his proposal once the ask came out, but with more thought, I think it really depends on how its all structured.
Right now the ISFA has a ton of debt, mostly from Soldier Field. It is being paid off by the hotel tax. Everyone knows that. But the important distinction is that the city pre-pays the payment and then earns back the amount from the tax. In years when the hotel tax is less than the payment, the city government is stuck paying for it. Or, what has often happened, is that the city pays just the interest or refinances the bonds to lower the current payment so the current administration doesn't have to deal with it, leaving it to future city councils to deal with. That is how we end up in a situation where almost none of the principal of the Soldier Field deal has been paid off.
With this new deal, it seems like JR wants to tap into existing TIF money for the area for infrastructure. That, to me, makes complete sense. Its basically what it was made for and makes sense from a common sense point of view. The city is basically paying for the infrastructure up front in exchange for future payments once the infrastructure is paid off. Its a good way to build up an area like the 78.
On top of that, JR wants the city to pay for the stadium. That seems outrageous, but it depends. Technically, it could just be a way to tap into the city's ability to get better rates on debt. If that's all it was, I really don't think people could be upset. But the key point is how it is paid back, and specifically, how much is actually expected to be paid back by the business. Its been said he wants the hotel tax to cover it, but right now, that tax can't even cover the smaller amount of Soldier Field payments. So there would likely be shortfalls.
So the question is, who covers the difference? If its the Sox, then its really not a terrible deal. There are no new taxes, the city pays for infrastructure, and ends up not spending any Chicago taxpayer money on the stadium.
But JR doesn't want to pay the difference that he knows will occur. So he wants to also tap into the sales tax in the 78 and put that towards the stadium payments. That is a new tax as much as he will want to say its not. The city would then be looking at reduced tax revenue for the area that will cost city spending. That is straight up a cost to the city, which is indirectly a tax on city taxpayers.
So really, the question will come down to who is taking the risk in this proposal. If the Sox are responsible for the entirety of the bond payment and are only given the hotel tax and the sales tax in the 78, its probably at worst a slight negative financial impact for the city with a decent chance of being a pretty big positive financial impact. But that assumes the Sox are the thing pushing the 78 development towards completion. However, if the city is the one ultimately responsible for the bond payments or if we think the 78 will get developed anyway, this could be a massive financial boondoggle.
The thing that throws a wrench into all of this is the Bears. It has been stated enough times here: the Bears and Sox are competing for these ISFA funds. As much as that makes it seem like taxpayers are about to get screwed, it could actually be a great thing for the city's negotiating leverage. If we can use that to get a scenario where the financial risk is less on the city, this could actually turn into a good project.