The negotiations between the State of Illinois, through the Illinois Sports Facilities Authority, and the Tribune Co. to purchase and renovate Wrigley Field have broken down over a financing issue that pertains the use of taxes. Former Governor James R. Thompson, Chairman, Illinois Sports Facilities Authority, said in a statement, "The Tribune believes that ISFA's participation in such an acquisition requires either the transfer of future sales and amusement tax revenue from transactions at Wrigley Field for the next 30 years, or the imposition of new taxes, or the transfer of existing ISFA funds now pledged to projects at U.S. Cellular.” Thompson then added, “ISFA cannot agree to this. In our judgment, there are no votes in the City Council or in the Illinois General Assembly for transferred or new taxes for Wrigley Field. And we cannot break the promises we have previously made to the White Sox under our lease terms.”
Thompson mentioned that funds could be met through the use of Equity Seats Rights. The ESR concept is the product of Lou Weisbach (see The Biz of Baseball interview with Weisbach for details on the difference between ESRs and Personal Seat Licenses).
The Tribune Company, through a statement, saw the matter differently.
"As an employee-owned organization, Tribune has been clear and unwavering in its commitment to a transaction that is favorable to the public, to the company, and to the Cubs. Unfortunately, ISFA’s proposal did not meet this criteria and would, in fact, violate the policies of Major League Baseball. We continue to see a strong benefit for the state and the city in public ownership of the ballpark, but we cannot execute a transaction at the expense of our employees or in violation of MLB rules."
While it is not specified, the use of ticket revenues to back the construnction bonds may be the violation of MLB rules.
The news sets the stage for the approved bidders for the Cubs to now focus on the purchase of both the storied franchise and Wrigley Field. How the renovation of Wrigley Field will be funded is still yet unknown. The cost to repair Wrigley is estimated to be approx. $450 million.
Thompson made it clear that while the negotiations between the State of Illinois and Sam Zell and the Tribune Co. have collapsed, the Cubs are safe in Chicago.
“When Governor Blagojevich asked ISFA to explore this opportunity, he wanted to insure that under new ownerships the Cubs would stay at Wrigley Field in Chicago and that Wrigley Field would be restored. We have no doubt that these two goals will be reached -- whether or not ISFA acquires and restores Wrigley.”
“We stand ready to resume negotiations with the Tribune or any new owner of the Cubs at their request.”
Source: Illinois Sports Facilities Authority, Tribune Company