Bacardi at the Park taxpayer funded

[southsider2k5]

http://www.chicagotribune.com/news/local/c...0,7705637.story

 

By Jared S. Hopkins, Tribune reporter

 

12:01 a.m. CDT, October 27, 2011

With the White Sox losing more than they won last season, a new restaurant across the street from U.S. Cellular Field gave fans a place where they could drink away their sorrows.

 

But Bacardi at the Park was not brought to the north side of 35th Street by a generous corporate sponsor or the team's marketing department.

 

Taxpayers covered the tab.

 

The Illinois Sports Facilities Authority, the government agency that built and owns The Cell, paid $3.2 million for construction of the restaurant plus just about everything inside the place, from walk-in refrigerators to bar stools, the Tribune and WGN-TV found in a joint investigation.

 

Another $3.7 million from the agency went for infrastructure upgrades for water and sewers at the Gate 5 plaza that made the restaurant possible.

 

A 2010 agreement between the Sox, who selected Gibsons Restaurant Group to run the business, and the agency shows that at the project's completion, the team was exempt from owing the agency any money. That arrangement contrasts with the management agreement for operating the stadium, which stipulates the team pay rent and make payments based on attendance.

 

The Illinois Sports Facilities Authority agreed with White Sox owner Jerry Reinsdorf that the agency should not share in any restaurant profits.

 

"We said to Jerry, 'Jerry can we have part of the profits?' and he said no," former Gov. Jim Thompson, who was the agency's board chairman when the deal was made, said in an interview. "We said, OK.'

 

"I've known Jerry for 52 years. He's tough. He's tough."

 

Robert Baade, a Lake Forest College economist who studies stadiums, said stadium authorities should steer clear of economic development, particularly a business venture without sharing any profits.

 

"This just seems weird to me," Baade said. "If there is not something in it for them … why are you doing it?"

 

The approximately 10,000-square-foot restaurant is a mix of steel, glass, wood and vintage brick, with dozens of flat-screen televisions, historical photos and murals. The beer garden and private patio outside bustle on sunny game days as customers sip drinks or cut into one of Gibsons famous steaks.

 

The restaurant is closed for the season, but plans are for it to eventually operate year round. Fans with tickets can enter the restaurant through a concourse; it also is accessible to anyone who wants to walk through the front door.

 

Thompson said he views the restaurant as just another type of concession, from which the Sox receive all the revenue inside The Cell. He cites sales tax revenue from the patrons who dine at Bacardi as a way the state is being compensated.

 

"Here we now have a restaurant for the fans of the White Sox, and we own it and we got what we've been asking for for several years," said Thompson, who as governor signed the legislation creating the Illinois Sports Facilities Authority. "I'm satisfied. White Sox fans are satisfied."

 

The Sox did not make Reinsdorf available for an interview and declined to comment on its relationship with the agency, "feeling that our (management) agreement is public knowledge and that any public comment should come from ISFA."

 

An agency statement said "the final proposal that included no revenue for the state of Illinois was what was voted on and agreed upon by Chairman Thompson and his board."

 

Its current chairman, former Senate President Emil Jones, declined to comment.

 

Invoices show the Sox cited Illinois Sports Facilities Authority sales tax exemption when it was ordering equipment and construction materials. The restaurant itself receives a property tax exemption because it sits on land owned by the agency.

 

Construction for the restaurant was initially covered by the Sox, who were reimbursed by the agency. In a records request response to the Tribune, the agency said all bids related to restaurant construction and operation were handled by the White Sox.

 

Thompson called the partnership "a coup" because he believes the owners of Gibsons, where the city's power brokers frequently gather, are the best restaurateurs in town.

 

Attempts to reach Gibsons co-owners for comment were unsuccessful.

 

The restaurant at the Cell appears to be unusual for a major league baseball stadium. Some full-service restaurants accessible without a ticket to the game have opened in recent years without having to tap into public coffers.

 

At Yankee Stadium, two restaurants are accessible without entry to the ballpark, NYY Steak and Hard Rock Cafe. Both operate year round and were paid for without public assistance (unlike construction of the rest of the stadium, which the Yankees pay for mostly with tax-exempt bonds).

 

On Chicago's North Side, the Captain Morgan Club, owned and operated by the Cubs, was built next to Wrigley Field by the team without any public assistance. The restaurant can be accessed from the street and from inside the ballpark.

 

In 1988, with Reinsdorf threatening to move his team to Florida — where a stadium was built to lure a team — then-Gov. Thompson worked the floors of the General Assembly to pass the law creating the Illinois Sports Facilities Authority. The clock on the House floor was turned off in order to meet a midnight deadline.

 

The city and state provide an annual combined subsidy of $10 million to the agency. The bulk of its budget comes from city hotel tax revenue, which was $30 million in 2010.

 

Under the ballpark lease, the Sox make payments for rent and maintenance, with that sum partly based on attendance numbers. Total amounts have averaged $2.7 million since 2003, according to the agency's annual reports. The lease expires in 2029, the agency said.

 

When the two sides agreed to the restaurant construction, no adjustments were made to increase the revenue stream for the agency.

 

The 2010 agreement also stipulates the Sox keep any revenue brought in by a new 13,000-square-foot retail store currently under construction next to the Bacardi restaurant. The White Sox paid for construction of that building.

 

Thompson said he had to push Reinsdorf for years before agreeing to build the restaurant. Earlier plans even included a larger commercial development with apartments and stores.

 

A lack of retail and eating options outside the ballpark has existed since it opened in 1991.

 

According to a 2007 journal article co-authored by Baade that compared economic impact of the Cell and Wrigley Field on their neighborhoods, most stadiums like the Cell are designed to bring as much income inside the stadium as possible, thereby lowering an incentive for local businesses to open up outside the stadium, Baade wrote.

 

"Like supplying expansive concessions services, supplying adequate parking also serves to increase the revenue for the team at the expense of local businesses," the article says.

 

Thompson deems the restaurant a success. Because most hotel visitors are from out of state, Thompson argues that Illinois taxpayers really are not footing the bill for the restaurant.

 

"It's proven to be wildly popular with fans," he said. "It's become an important part of the park."

 

WGN-TV producer Marsha Bartel and reporter Mark Suppelsa contributed.

[shipps]

"We said to Jerry, 'Jerry can we have part of the profits?' and he said no," former Gov. Jim Thompson, who was the agency's board chairman when the deal was made, said in an interview. "We said, OK.'

 

Wow, Jerry tells everyone just how its gonna be and thats it, I guess.

 

 

[chetkincaid]

The city and state provide an annual combined subsidy of $10 million to the agency. The bulk of its budget comes from city hotel tax revenue, which was $30 million in 2010.

 

So most of this is funded by taxes from hotels? And taxpayers aren't paying for any of it?

 

 

How much exactly is "the bulk"?

Edited October 27, 2011 by Chet Kincaid

[southsider2k5]

"We said to Jerry, 'Jerry can we have part of the profits?' and he said no," former Gov. Jim Thompson, who was the agency's board chairman when the deal was made, said in an interview. "We said, OK.'

 

Wow, Jerry tells everyone just how its gonna be and thats it, I guess.

 

I think Jerry must have Jedi mind powers or something.

[jasonxctf]

maybe the sports authority was thinking about trying to collect fees/taxes/revenue, etc from the Sox based upon Cell attendance? They made an investment in this restaurant, with the hopes that it will boost overall attendance to a level in which the White Sox have to make payments back to the State?

[bschmaranz]

I think Jerry must have Jedi mind powers or something.

 

These aren't the profits you're looking for...

Edited October 27, 2011 by bschmaranz

[southsider2k5]

Diamond Jim Thompson: Those were the profits we were looking for.

 

[Texsox]

He's almost as powerful as Boras in mind control.

[southsider2k5]

So most of this is funded by taxes from hotels? And taxpayers aren't paying for any of it?

 

 

How much exactly is "the bulk"?

 

I'm guessing anything that isn't going to stadium improvements at the Cell and Soldier Field.

[Soxfest]

JR making money hand over fist and owns 0% of facility.

[bigruss]

Well if that was their decision, then JR isn't at fault, but I would expect to see changes in the board for ISFA.

Edited October 27, 2011 by bigruss22

[bmags]

"We said to Jerry, 'Jerry can we have part of the profits?' and he said no," former Gov. Jim Thompson, who was the agency's board chairman when the deal was made, said in an interview. "We said, OK.'

 

"I've known Jerry for 52 years. He's tough. He's tough."

 

I don't know why you would tell this story without complete embarrassment. Destroy this board.

[StrangeSox]

JR making money hand over fist and owns 0% of facility.

 

Awful. Cities almost always end up negative on these stadium deals.

[bmags]

#occupychisox

[southsider2k5]

#occupychisox

 

I could suggest a media contact...

[bmags]

Who Rongey? Rongey probably loves this deal. I can hear it now: "This bacardi deal alone is not why there is a deficit in Chicago, therefore, argument is null"

[southsider2k5]

Who Rongey? Rongey probably loves this deal. I can hear it now: "This bacardi deal alone is not why there is a deficit in Chicago, therefore, argument is null"

 

For occupychisox? Why that beacon of fairness Joe Cowley of course.

[Balta1701]

Well if that was their decision, then JR isn't at fault, but I would expect to see changes in the board for ISFA.

The people who wrote this contract probably did so back in the early 90's.

[NorthSideSox72]

The people who wrote this contract probably did so back in the early 90's.

Correct. The contract was heavily favoring the Sox because the state was trying to keep them around. They got a sweet deal as a result.

 

[Balta1701]

Correct. The contract was heavily favoring the Sox because the state was trying to keep them around. They got a sweet deal as a result.

I'd imagine that the contract language probably directly relates to the fact that Bacardi at the Park is across the street, clearly within space that used to be a parking lot.

[Harry Chappas]

ISFA is in shambles I think everyone with any say has turned over.

 

The restaurant was stupid.

 

Nobody will go there unless there is a game and then there are plenty of other options.

 

 

[bmags]

If the city would like more bars around 35th and Shields I'd encourage them to look into their liquor license regulations and zoning. Both would be much better off.

[southsider2k5]

Correct. The contract was heavily favoring the Sox because the state was trying to keep them around. They got a sweet deal as a result.

 

I thought it all got changed with the US Cellular deal negotiations? Wasn't there some sort of agreement over how to spend extra incomes because of this? Apparently not.

[NorthSideSox72]

I thought it all got changed with the US Cellular deal negotiations? Wasn't there some sort of agreement over how to spend extra incomes because of this? Apparently not.

That would likely only be related to the money specifically coming from that sponsorship.

 

[Balta1701]

That would likely only be related to the money specifically coming from that sponsorship.

They did also get what, $30 million in public spending on the park in that deal (Stripping a few upper deck rows, the Fundamentals area, new seats), so it's not inconceivable that they'd have changed the new revenue clauses in that deal...but you're right, they probably didn't touch the parking areas in that deal, and that's where this bar sits.