Taxpayers losing along with White Sox - Quad-Cities Online: Employment

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Taxpayers losing along with White Sox

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Posted: Friday, August 21, 1998 1:00 am

CHICAGO -- While the cost of owning and operating Comiskey Park approaches nearly $22 million a year, the Chicago White Sox, the stadium's sole tenant, are on the hook for only a fraction of the bill.

In 1997, the team's rent payment to the Illinois Sports Facilities Authority amounted to a mere $415,539, slightly more than the Sox shell out for pitcher James Baldwin, and millions less than the checks cut to Frank Thomas and Albert Belle.

Instead of paying a yearly fixed rate, the team's rent is based strictly on attendance, or more precisely, the number of ``full'' tickets sold each season.

That means for special promotions like half-price night, it takes two tickets to equal one ``full'' ticket. When tickets are given away to charities and other groups, they aren't counted.

Unfortunately, much like the team's on-field fortunes, attendance at Comiskey Park, which seats 44,321 fans, has plummeted in recent years -- the much maligned upper deck is as deserted as a meeting of the Jerry Reinsdorf Fan Club.

Ticket sales began heading south right after the 1991 inaugural season when the Sox sold more than 2.9 million tickets. The club hasn't come close since.

Last year, ticket sales languished around 1.8 million, or the equivalent of 1.4 million ``full'' tickets. The real slump came in 1995, a year after the contentious baseball strike, when ticket sales barely topped 1.6 million.

As a result, the Sox have seen their rent payments slashed, dropping from more than $4.5 million in 1991 to a low of $301,420 in 1996. In addition to a bargain basement rent, the Sox also pocket a yearly $2 million maintenance subsidy for minor repairs and improvements at the stadium.

So exactly who pays the tab for Comiskey Park? Certainly not the White Sox. That burden falls on taxpayers and anyone checking into a Chicago hotel.

The hotel tax was increased from 13.5 percent to 16 percent to help pay Comiskey's bonds. The tax has generated $124 million since 1991, while the city of Chicago and state kick in an additional $5 million apiece in taxes every year. The city-state contribution was required to secure the bonds on the $137 million stadium.

After paying bond obligations and other stadium expenses, the authority routinely rebates money to the city and state -- so far more than $28.9 million. Since the rebates began in 1992, neither the city nor state has come close to recouping their taxpayer-funded subsidies of at least $80 million.

``In terms of the commitment the authority makes for the payment of its bonds and the rebate we provide to the state, the largest percentage of that comes from the hotel tax. It's more or less how we have managed those funds as opposed to looking to the White Sox to fulfill our obligation,'' said Jerry Blakemore, director of the sports facilities authority.

``What the White Sox do does not affect the integrity of our commitment to the bondholders nor does it impact significantly our ability to make a rebate to the state,'' he added.

The bonds themselves are secured by the hotel tax revenue and the financial commitment of the city and state.

``It was never contemplated that the Sox would be guaranteeing the payment on the bonds or the rebate,'' Blakemore added. ``We obviously have a vested interest in the Sox doing as well as possible because, we the authority, and therefore taxpayers, benefit because of that.'' Despite the Sox paying only a nominal portion of overall costs, ``I believe it's working out pretty well,'' he said.

``I'm not so sure,'' added John Cameron, executive director of Citizen Action-Illinois, a government watchdog group. ``Are (taxpayers) getting a $10 million return'' on their investment? ``I think over the long run you have to see this as your classic insider deal that made money for people in the know at taxpayers' expense. Was it the worse crime ever committed in Springfield? Probably not,'' he said.

In agreeing to help the Sox, the state should have insisted on gaining part ownership of the team. That way, the Sox could ``never again hold the threat of a move over out head,'' Cameron said.

Most hotel operators, who had to pass a tax increase onto customers, might agree.

The group initially fought efforts to raise the hotel tax arguing that a higher rate would make Chicago less attractive to convention business.

``There's really nothing that the business community can do about it now except monitor the excess dollars that are generated by the hotel tax,'' admitted Gerald Roper, president of the Chicagoland Chamber of Commerce.

That extra money, he insisted, should be spent on promoting the convention and tourism business, something the authority has so far rejected.

``They (the authority) told us they had plans of their own for those dollars,'' Roper said.

That view, he added, might be a bit short-sighted.

``I can guarantee you that program targeted (at attracting convention and trade shows) with those excess dollars would have a far greater impact on the local community than (the money) going into a general revenue fund,'' Roper said.

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