Stadium subsidies aren’t effective economic-growth policies

Are professional sports stadiums cost-effective engines of economic growth?

Mayor Brandon Johnson certainly thinks so, at least regarding the Chicago Bears’ proposal for a domed stadium on the city’s lakefront. In cheerleading the project, which will combine about $2 billion in investment from the team with more than $1 billion in assistance to taxpayers (far more over time as bonds float to finance servicing that amount), Johnson touted 24,000 jobs for the city of Chicago, including 2300 permanent.

So why were the garish images of a football palace accompanied by ball fields and other public amenities met with overwhelming negativity, not only from the governor and his top staff, but also from state legislators, lake protection advocates, and even sports talk radio hosts? First, of course, there’s the distasteful image of yet another wealthy sports franchise groveling for taxpayer subsidies. But doubts about whether sports stadiums in general – and this stadium in particular – are capable of changing the rules of the economic game should not be overlooked.

A revealing, narrative-driven report released nearly a year ago by Johnson’s allies, titled “First We Get the Money,” turned out to be one of the few consistent philosophies followed by Johnson in his chaotic first year. His efforts to raise revenue have generally faltered, most notably with voters’ rejection of a referendum on quadrupling the tax on residential and commercial property sales of more than $1.5 million in order to fund homelessness programs. But he shows no signs of changing course.

So, given the disapproval of Chicago taxpayers, it must have been attractive to Johnson that one benefit of the Bears’ proposal was the dearth of city tax subsidies—at least direct ones—needed to make it happen. The city will get the money not from its taxpayers, but from bonds issued by a government agency. Likewise, Chicago’s government will not provide the $1.2 billion needed for the stadiums and other amenities shown in the beautiful designs. State and federal grants, or other funding to be determined, will cover public benefits.

Of course, Chicagoans are also Illinoisans and pay a lot of state taxes as well as local taxes, so they end up on the hook for a chunk of that largesse. But that wasn’t part of Johnson’s sales pitch.

As in other past situations, Like the migrant crisis Facing the city and state this fall and winter, the Bears’ stadium plan asked Gov. J.B. Pritzker to overrule Johnson’s rule, in this case like a parent at the grocery store asking his child to put candy back on the shelf. Pritzker administration officials He told Bears executives last week that their plan was “unsuccessful.” Merriam-Webster defines uninitiated as “someone or something that is not productive or effective.” In essence, the governor instructed the Bears, and by proxy Johnson since he’s on board with exactly this plan, to try again. With something completely different.

Bears are not politicians. They have to win games, not popularity contests. On the other hand, for Johnson, the public’s disapproval of the project he described as transformative for Chicago represented yet another insulting rebuke. Not only did authorities in Illinois declare this plan dead on arrival, but parts of Johnson’s progressive base also pushed back, questioning why a mayor they thought would make the wealthy pay more to fund public benefits programs. All sorts are now beating the drum of taxpayer money to make the rich – the owners of the NFL – richer.

The political confusion we witnessed at the opening of the stadium is not what disappoints us the most. The revelation, unsurprisingly, comes from a mayor who believes the city’s thriving economy relies on the public sector — or in this case a public-private partnership, to put it mildly — to make multibillion-dollar investments for a few thousand dollars. Permanent jobs (if that’s the right number) show a lack of understanding of what generates a truly productive business.

Tribune editorial cartoonist Scott Stantis Mayor Brandon Johnson supports the new Bears stadium proposal.  (Scott Stantis / for the Chicago Tribune)
Tribune editorial cartoonist Scott Stantis Mayor Brandon Johnson supports the new Bears stadium proposal. (Scott Stantis / for the Chicago Tribune)

Johnson has shown little interest, with one notable exception, in making Chicago’s business environment more conducive to private sector investment.

This exception, for which the mayor deserves praise, is an attempt to reduce red tape that the city government imposes on housing developers. Chicago’s permit system is a byzantine system, and simplifying it is a worthwhile goal. Other mayors have tried it and largely failed. We encourage the Johnsons to succeed where they have not.

But public works – especially those that favor wealthy business interests that do not need subsidies – are often not an important driver of economic growth. Certainly, some of them can serve as crucial focal points. For example, transportation stations are reliable hubs around which businesses and households can take root and expand. But in the absence of additional private sector investment, the plants are only modest job generators.

This Bears stadium strikes us as a particularly expensive version of that dynamic. How can a massive replacement structure, set in parks where no one else can build and removed from the rest of the city by DuSable Lake Shore Drive, promote economic growth once it’s operational? (And no, we’re not counting the Super Bowl appearance once every two or three decades.)

Numerous studies have proven that huge public investments in professional sports stadiums do not yield commensurate benefits.

This is what Pritzker, a business owner before he became a politician, understands in a way that Johnson clearly does not. Fortunately for all Illinois taxpayers, Pritzker will require that any team’s stadium plan rely on public funds, whether that idea comes from the Bears, White Sox, Red Stars or someone else, to demonstrate public benefit. At least equal To the investment that is made. Given the potential for cost overruns and negative tax surprises in the future, the standard should be an independently evaluated public and economic benefit. Much larger What taxpayers provide.

Since the mayor has already approved this DOA plan, it is unlikely to be a major part of any real deal for the stadium in the future. He would do well to develop more initiatives to make Chicago an easier city to do business in, create good-paying jobs, and attract visitors and talented, diverse young graduates. This is the best way to “get money”.

Submit a letter of no more than 400 words to the editor here Or email letters@chicagotribune.com.

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