Study raises questions about effects on property taxes from megaprojects bill for Bears stadium
The Illinois General Assembly as of Tuesday had five days left to reach a deal on the "megaprojects" bill, which would enable the Chicago Bears to build a new domed stadium in northwest suburban Arlington Heights.
One version, HB910, passed in the Illinois House of Representatives. The bill is now in the state Senate.
But a new study from the Cook County Treasurer's office underlines growing concerns about the impact the bill could have on the county's property tax base and overall fiscal health.
Cook County Treasurer's office researcher Hal Dardick, formerly a reporter for the Chicago Tribune, explained that the study acknowledges that it's hard to know what the market value of an Arlington Heights stadium will be because nothing else like it exists in the area.
But the study estimates the bill will likely allow the Bears to save tens of millions of dollars in taxes every year, while not guaranteeing the taxes the team does pay will be enough to cover enhanced and needed services.
"A lot of folks assume the stadium will be worth $2 billion. It won't be worth $2 billion, because that will include labor and financing and fixtures, which the property tax system does not tax in the state of Illinois," Dardick said. "So a conservative estimate that we actually got from one of the foremost sports economists in the country, Geoff Propheter, and based on that, what the tax would be, if there were no breaks, would be $53 million a year."
However, the bill would allow megaproject developers to freeze property tax assessments for 25 to 45 years. Rather than paying higher property tax bills that would come with rising assessments, developers such as the Bears would be allowed to negotiate long-term Payments in Lieu of Taxes, or PILOT, with local taxing bodies.
Assuming the Bears make a $10 million annual payment in lieu of taxes on top of the approximately $4 million in property taxes they are already paying on the Arlington Heights site where they plan to build, the Bears would save $39 million a year — or $1.5 billion across the 40-year life of the deal, Dardick said.
By comparison to the $14 million estimated for the proposed Bears stadium, the annual tax bill for the Westfield Old Orchard mall in Skokie is $18 million, and for the Wilis Tower $50 million. The annual tax bill for Wrigley Field and nearby buildings is also $14 million, and the United and Advocate centers $10 million, the study indicates.
Dardick said the question becomes whether that $14 million total bill for the Bears stadium would be enough to support education, police and fire services and inspections, and everything else that the municipal government in Arlington Heights requires.
Moreover, those figures are independent of the infrastructure improvements around the proposed new stadium for which the Bears want to state to pay.
"There's a figure thrown out about $855 million in infrastructure, comes to about $2.3 billion total in assistance, basically, that [the state is] giving the Bears," Dardick said. "It's a subsidy."
A related question that remains open, Dardick said, is if the Bears' payments to cover additional municipal services in Arlington Heights come up short, will everyday taxpayers have to pick up the difference and pay more?
Further, Dardick said, the tax break deals being negotiated for the megaprojects bill could limit any expansion of the tax base that would provide relief to taxpayers.
Indeed, the study had a warning for those who anticipated that the megaprojects bill could provide property tax relief to homeowners, especially around the stadium site where many just got hammered with massive increases in their property tax bills. The way the bill is written now, it would offer property tax relief of about $300 or less to those who live in Arlington Heights — and negligible amounts for anyone else, Dardick explained.
"It's about $280 if you dole out those breaks evenly among the homeowners in Arlington Heights — that's about 3.3% of the bill," Dardick said, "and the statewide component is a dollar and some change in relief, which, you know, won't even get you to McDonald's."
Meanwhile, the megaprojects bill will not necessarily be applied only to a new Bears stadium.
"Where it gets really tricky is this bill isn't just about the Bears," Dardick said. "In some ways, the Bears are the tip of the iceberg."
Other projects that could fall under the terms of the megaprojects bill if it passes include One Central — a massive proposed development in the South Loop that would cap a 35-acre train yard across Soldier Field with a massive platform where the developers would build residential, retail, dining, and office space.
In the Loop and on the Near West Side alone, there were at least five projects with price tags over $100 million — the amount that would qualify for the megaprojects bill — under construction in 2025 alone, the study said.
As to whether the megaprojects bill is ultimately a thumbs-up or thumbs-down for taxpayers, Dardick said all the questions raised in the treasurer's study need to be answered. Will the tax payments negotiated for the Bears to pay be enough to support services in Arlington Heights? Will property taxpayers see relief, or could they end up paying more? Is it fair and equitable to provide tax certainty for big-money developers when everyday property taxpayers rarely see it? Will megaprojects like the Bears stadium increase economic activity overall, or just move it from one area of the state or county to another?
"I don't think it's a great deal, but if it's an adequate deal, maybe it's OK," Dardick said. "But I think the reason for the study was to make the legislature face these questions that are still out there."
