Shiny new things and public priorities

Just a few weeks after the Chicago Bears unveiled their plans for a new lakefront stadium with significant public funding, pushback and opposition continue to grow. Not only have the media and some public officials expressed skepticism about the scale and merits of the proposed “shiny new thing,” but even some of Mayor Brandon Johnson’s most vocal (and progressive) supporters seem perplexed about the mayor’s enthusiasm for the project. 

Significant public funding for private development endeavors may make sense when there are significant public benefits to compensate for the public expenses, but in the present case, identifiable public benefits seem scarce. Adding 14 acres of green space for public and youth sports programs along the lakefront? Providing year-round access to new food and drink establishments, retail and other cultural attractions? Ensuring that the city “makes the cut” for the next list of top 25 cities for hosting major sporting events? Seems like a weak set of benefits for hundreds of millions of dollars in public funding.

In fact, considerable evidence and experience indicates that the economic impacts and public benefits of large, publicly subsidized stadiums are usually far less than projected. One recent survey of over 130 studies of stadiums and other sports facilities concludes that even taking intangibles like civic pride into account, “welfare improvements from hosting teams tend to fall well short of covering public outlays.” In other words, these public investments do not generate positive net returns.  Of course, building new facilities can, in principle, generate economic development nearby, but some of that growth reflects re-located activity, not truly new activity. And hosting sporting events in a flashy new facility can contribute to civic pride, but not nearly enough to cover public outlays.

Yet despite the overwhelming evidence on the limited economic impact and value of public funding of stadiums, “pitches” from major league sports teams have proven hard to resist, with state and local governments directing $33 billion in subsidies to construct such facilities between 1970 and 2020 and voters approving 35 of 57 stadium and arena proposals between 1990 and 2023. Why the disconnect? There’s no definitive answer, but surely no city leader wants to be the one who “loses” a major franchise—and besides, city leaders can enjoy cutting the ribbon on new facilities today, knowing they will long be out of office when tax payments are due.

In Chicago’s case, the Bears’ proposal almost feels like a trip down memory lane; haven’t we—and other cities—been here before?

• With a price tag of $3.2 billion for a new stadium plus $1.5 billion for infrastructure improvements, private support of $2.3 billion is too low—and public support is too high. In fact, $900 million in public money for stadium construction alone would represent nearly 30% of stadium construction costs—far higher than the 15% ceiling suggested by previous research as reflecting a balance between public costs and public benefits.
• Financing details are not transparent; too many tax dollars are captured or needed for the project; and “scoop and toss” plans to repay existing stadium debt by issuing new bonds with longer durations only delay the inevitable. That strategy “tosses” repayments into the future and drives an even greater wedge between the expected lifetime of the new stadium and the years needed to pay for it.
• Labeling the new facility as “publicly owned” when non-game-day rental income seems headed for the Bears, not the Chicago Park District, seems a bit of a stretch.

That is all not to mention the proposal’s “me-first” and tone-deaf approach to potential demands from other Chicago sports teams such as the White Sox and/or the Red Stars for their own new facilities—the Bears simply ignore those issues completely.

Are the economic growth and civic pride benefits of a new Bears stadium really enough to compensate for the required public financial commitment? Our elected officials must act like the grown-ups in the room, slow things down and assess whether this project really deserves priority over other pressing demands.

Here’s a short list of worthy projects informed by skimming recent headlines. No doubt other useful ideas could be added: 

• Providing additional support to Chicago-area transit agencies as COVID-era support runs out is essential.  Newly-proposed state legislation seeks major governance reforms and up to $1.5 billion in additional operating revenues annually.
• Reversing COVID-era “learning losses” for Illinois students will be expensive but will generate even greater returns. 
• Replacing lead service lines statewide will cost between $5.8 and $10.1 billion per a recent taskforce report. 

Every city, every state will have its own set of priorities to consider. When it comes to the Bears’ proposal, the welfare of Chicago and Illinois residents should be paramount. Public funds are limited, so which will it be? Supporting improved transit, which connects people to jobs and economic opportunities? Investing in human capital, which raises lifetime earnings and improves life outcomes? Updating our water infrastructure to limit the damage to the health and well-being of Illinois residents? Some other worthy program? Or building a new stadium that serves to principally benefit the Chicago Bears? Illinoisans deserve better than a shiny new bauble delivering limited public benefits and diverting significant public funds away from more serious and valuable projects.

Paula Worthington is an economist at the University of Chicago’s Harris School of Public Policy.