Should Chicago Pay for a DePaul Basketball Arena?

The Lincoln Park school plays in a mostly empty Allstate Arena, but momentum is building for a new venue—and taxpayers might foot part of its bill.

DePaul basketball

John Smierciak/Chicago Tribune

Yesterday the Sun-Times reported that the mayor is expected to announce a “tentative” plan for a McCormick Place arena for DePaul’s basketball team that would include substantial—nine figures—state funding, using McPier’s bonding authority and, perhaps, tax-increment finance money. Greg Hinz reports that the specific figures being thrown around have been shot down by his sources, but the general concept is expected to be announced this week. (Update: make that quite a bit of TIF money.)

It’s a bit of a surprise after the Emanuel administration talked the Cubs’ ask down from public money and/or tax breaks to a jumbotron. (On one hand, the Cubs make money; on the other, people care about the Cubs.) It’s also a surprise, given that a huge plot of land is opening up a mile from campus and the people who are nominally interested in DePaul athletics: the A. Finkl steel factory at 2011 North Southport, which is moving to the South Side.

It’s the latest twist in a story that’s seen the private university, which hasn’t won an NCAA tournament game in more than twenty years since 2004, courted all across Chicagoland.

Right now the Blue Demons play out at the Allstate Arena, where they’ve been since 1980; currently, the team plays there rent-free, but the scene isn’t exactly collegiate, as Adam Doster writes:

The team plays its home games at Rosemont’s Allstate Arena, an antiseptic gym that overlooks I-90 and not much else. The building—more than 15 miles from the school’s Lincoln Park campus—officially seats 18,500 people, though far fewer stream in when DePaul suits up. Those that do are primarily dads and children, most of whom seem more interested in the T-shirt toss than the pick-and-roll. Public-address announcements echo off the wooden ceiling and settle in the vacant upper deck. Beer vendors circulate aimlessly through empty blue rows in search of customers. The energy that makes college basketball so captivating is mostly absent.

So Rocky Wirtz, co-owner of the United Center, decided to make a deal that DePaul theoretically couldn’t refuse:

The United Center, on Chicago’s West Side, had been offering free rent for at least 10 years, plus all ticket revenue, in an attempt to woo the team from Rosemont, where it has a rent-free deal at the Allstate Arena.

The center offered a wide range of resources, he said, including Blackhawks staff guidance to the Blue Demons and assistance with ticket sales and advertising.

That would have given the Blue Demons use of an NBA arena four miles away from their campus (Allstate is about 16 miles away), though they would have had to work around the Bulls and Blackhawks. Not good enough, DePaul told Wirtz: "Instead, the university told United Center owners it preferred to work with the state-city agency that owns McCormick Place and ‘do their own private building,’ Wirtz said.”

Except, you know, it wouldn’t be private private. Quinn’s office told them the state couldn’t afford it. Bob Fioretti said: “Taxpayer money to build a stadium for 18 games? Somebody’s got to have a hole in their head to be proposing that.”

Why would the mayor have interest? Here’s what Greg Hinz reported last year:

Sources say Mr. Emanuel is behind the idea because much of the Near South Side near the convention center goes dark when a big convention is not running, which is most of the time. For instance, the area lacks many good restaurants, bars and shops.

This is the strange Rube Goldberg logic of publicly-financed sports arenas. Authorities decide that a neighborhood doesn’t have enough restaurants, bars, and shops. But they don’t finance commerce in the form of restaurants, bars, and shops, which tend to thrive in neighborhoods that do not have sports arenas. The primary local businesses you see in three of the four immediate areas around Chicago’s sports stadiums—four of five if you count Toyota Park—are places you can pay to park on game day. So to fix the problem, governments finance commerce in the form of massive, sometimes-used structures (which sell food, beer, and goods), with the expectation that a healthy mix of commerce will follow in its wake.

It’s an oddly indirect form of economic development that seems to persist solely because of the appeal of athletics. Yet that appeal doesn’t always extend to the people in the shadow of the arena. In March, Micah Maidenberg reported that local residents objected to the traffic, parking, and the “dead space” of an arena. Complicating things is that two buildings in the area, the Rees House and the American Book Company building, are both landmarked.

And it also assumes that Chicagoans need some excuse to go to bars and restaurants, which has not been the case in my anecdotal experience.

The United Center, for example, was completed in 1994. It houses two beloved professional sports teams that, at least in recent years, have regularly been selling out games. It hosts major concerts, like Madonna, the Rolling Stones, Justin Bieber, and Beyoncé. It was meant to be “Wrigleyville West.” It hasn’t happened. When UC management went back to the drawing board for the Bulls’ practice space next to the arena, they decided that maybe it should include retail and entertainment (if they get an extension on their favorable property tax formula), instead of continuing to wait for it to show up.

The UC, though it got a good tax deal, was privately financed. Toyota Park, meanwhile, has been a boondoggle, as Bridgeview’s credit rating has declined and its property taxes have gone up. In Chicago, the city had to kick $1.1 million 2011 in for Soldier Field and U.S. Cellular Field debt repayments because hotel taxes were insufficient to cover them. The next year, hotel taxes went up again.

According to the Sun-Times, McPier still has “resources on hand from a 2010 bond restructuring.” Yeah, but:

Today, the financial picture at McCormick Place has changed dramatically. Restructured debt payments are now in line with tax revenue, but ballooning payments in the future will have to be refinanced yet again.

The financing details will be absolutely critical. But just because a DePaul stadium looks like it’s coming doesn’t mean it’s anything like a done deal. McDome, the last planned McPier-financed sports arena and longtime future home of the Bears, was reported as being close to done numerous times before negotiations fell through and Soldier Field soldiered on.

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1 year ago
Posted by George56

The real question is why does DePaul think it needs a sorta big time athletic program. Maybe it should got to Division III or drop sports altogether. What benefit does the athletic program bring to the university?

Northeastern Illinois University decided in the 1990s that it could not charge its students to fund an athletic program that no one was interested in. Chicago State charges its students $120 a semester to fund an athletic program no one is interested in. And it got $35 million from the state to build its arena. I think NEIU took the right path.

Why should the taxpayer fund a boondoggle for a private university?

1 year ago
Posted by Erbs

"It's the latest twist in a story that's seen the private university, which hasn't won an NCAA tournament game in more than twenty years..."

DePaul beat Dayton in the 2004 NCAA tournament. That was only 9 years ago.

1 year ago
Posted by please no

A tax-exempt religious institution with a $380 million endowment and extensive real estate holdings needs our money why exactly?

1 year ago
Posted by solitarysherlockian

No. The students have protested against it, bright kids. Setting up a petition to say NO. The professors too organized a NO vote. The neighborhood is against it. The only one's in favor are the apparently well-connected alleged DePaul alums who think this private school is owed to them (sky box anyone?)by the City of Chicago a stadium for the rich and deep pocketed to drive their posh cars or be driven to, by their chauffeurs.
Talk about the Chicago Way.

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