Saving the Sox Aug & Sept 1988

Legislative Action Special Section

Saving the Sox

Owners of the Chicago White Sox join legislators at a press conference Wednesday, June 29, in the State-house to announce a $150 million plan to keep the team in Chicago. From left are Sen. Aldo DeAngelis (R-40, Chicago Heights), Rep. Bob Churchill (R-62, Antioch); Jerry Reinsdorf, White Sox owner; Sam Vinson, lobbyist; Eddie Einhorn, White Sox owner; Gov. James R. Thompson; and Al Johnson, special assistant to the Chicago mayor Photo by Randy J. Squires

When the General Assembly approved a package designed to build a new stadium for the Chicago White Sox, many saw it as an 11th hour move on June 30 to keep the American League team in the state. But the struggle to guarantee that prinicipal owners Jerry Reinsdorf and Eddie Einhorn would not move the baseball club to Florida merely came to a climax on or about midnight June 30 after two years of negotiating, business and politics.

In its 1986 fall session the General Assembly approved a package to build a new stadium. Chicago Democrats favored the plan, and Gov. James R. Thompson was able to convince Republicans to vote for it. Scheduled the same day for a vote was a new Arlington Heights Racetrack, important to the GOP, and Thompson warned his colleagues it would be difficult to get Democrats to support the racetrack if the White Sox package did not pass. Although the 1986 Sox package passed, the deal eventually lapsed because Thompson and then-Chicago Mayor Harold Washington could not agree on who would control the Illinois Sports Facilities Authority (ISFA), the agency created to build the stadium. With this failure Reinsdorf and Einhorn began serious negotiations with officials in St. Petersburg, Fla.

As this session of the General Assembly was beginning, the White Sox were close to an agreement with the Florida city, and the prospect of Chicago's losing the White Sox seemed real. Thompson sent his deputy, James Reilly, into the negotiations with instructions to come to an agreement. One week later, on May 11, a tentative agreement was reached with team owners. Almost immediately legislative approval of the package was linked to passage of a tax increase despite efforts to separate the two issues. "It's important for all the members to know that this will not take money away from schools, it will not take money away from kids, it will not take money away from mental health," Thompson said. "This is our baseball stadium; it will belong to the people of Illinois, not the White Sox; they're simply the tenants." House Speaker Michael J. Madigan (D-30, Chicago) also attempted to separate the issues, but in doing so declared no need for higher taxes: "The legislature is doing very well at this point in terms of reallocating the governor's budget to provide additional funding for education and mental health, so I don't see that there's any need to link those

Deadlines to meet in White Sox agreement

By October 15, 1988, the Illinois Sports Facilities Authority (ISFA) must have acquired 80 percent of the residential property on the stadium site (although residents are permitted to stay through the winter). If deadline is not met, Chicago White Sox can void the lease. ISFA reached an agreement on price with residents August 3.

By May 1, 1989, all demolition of existing property must be completed, sufficient bonds must be sold to pay for the stadium and all construction work must be contracted. If deadline is not met, Chicago White Sox can void the lease.

By March 1, 1991, stadium must be completed and ready for use. If deadline not met, ISFA must pay a $5 million penalty to the Chicago White Sox plus any extra costs the team incurs for playing in the old stadium until the new stadium is completed. By March 1, 1995, if the stadium is not completed, Chicago White Sox can void the lease.

questions to other issues."

Yet Madigan got commitments from 36 Democrats to vote for the White Sox package while it still seemed possible a tax increase might pass. Madigan said it was up to Thompson to secure 24 Republican votes for the package. A game developed between Thompson and Madigan, each blaming the other for a possible failure of the White Sox package. Although 36 votes is the normal House Democratic quota on controversial items, Thompson said Madigan needed to get more votes. "I hope he does as good a job in persuading suburban and downstate Democrats to vote for the White Sox as he has in persuading Chicago Democrats to vote for the White Sox," the governor said. "It's only natural that Chicago Democrats would vote for the White Sox."

While Madigan and Thompson were bickering over votes, Sen. Greg Zito (D-26, Melrose Park) came out with a plan to buy the team with state bonds and then sell stock to the public. Thompson said he would veto the bill if it were passed, hoping to discourage legislators from voting for it instead of his package.

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Financing the new White Sox stadium

The funding for the new stadium is a complicated affair designed to assure bondholders and to guarantee that the Illinois Sports Facilities Authority (ISFA) receives the $18 million it estimates will be needed each year. The ISFA will sell $150 million in bonds to pay for the construction of the new Comiskey Park and for relocation of residents living on the stadium site, just south of 35th Street in Chicago. Debt service on the bonds is estimated at $15 million per year and will comprise the largest part of ISFA annual spending.

The law specifies three separate accounts in which revenue will be collected. A pool of $18 million in two accounts is the basis for the annual funding to the ISFA. One account will have $10 million dollars, $5 million from Chicago's local share of the state income tax and $5 million from the statewide hotel operators tax. The ISFA must spend the money in this account first. The second account will receive an additional $8 million annually from the statewide hotel tax as an advance payment from the state. Each year the General Assembly must appropriate the funds, and the ISFA may not ask for more than $18 million in any year.

A third account is a trust fund held by the state treasurer to receive revenue from the Chicago Hotel Operators Tax, expected to be $10 million annually. The ISFA can tap this fund if the General Assembly appropriates less than the ISFA requested, and from this fund the state will reimburse itself for its $8 million advance. At the end of a year, if this account has a balance and the ISFA has met all its expenses (even if more than $18 million), the state and the city will split it.

Because the ISFA has first claim on the trust fund if the state appropriation falls short, it is expected the ISFA will always get the $18 million per year. Since the state is reimbursed by either making a lower appropriation or from the money left in the trust fund, the state should always be reimbursed for its $8 million advance. The risk for the state is whether the Chicago hotel tax will generate enough revenue each year for the trust fund; the state could lose its advance. Revenue projections suggest that the Chicago hotel tax will always raise enough revenue.

The main difference between the 1988 and the 1986 packages is the state's $8 million advance; it offers more security to bond investors. The bonds should be paid off in 20 years, and then the General Assembly can decide how to reallocate the money in the three accounts.

Once the stadium is completed, the ISFA will have revenue from ticket sales (if annual attendance exceeds 1.2 million in years one through 10 and 1.5 million in years 11 through 20) and 35 percent of all media income. This money will be used for maintaining and insuring the stadium.

The first $18 million appropriation to start this process was approved July 2. (It was part of the fiscal year 1989 budget for the Department of Commerce and Community Affairs, known as a "Christmas tree" bill.) Before lawmakers consider the second year's $18 million appropriation, the ISFA must meet specific deadlines (see box on page 51) for building the stadium and selling the first bonds.□

On June 27 Madigan told supporters at a Save Our Sox rally on the lawn of the Capitol that the Republicans would be at fault if the package failed: "I would encourage you to go talk to the other legislative leaders and to the governor. Ask them to do the same thing that Speaker Madigan has done and we'll keep the White Sox in Chicago." Thompson told the crowd the agreement was almost final and he was waiting for Reinsdorf and Einhorn to sign a lease. The governor urged the crowd to put pressure on legislators: "We've got a mighty selling job to do with people from downstate and the suburbs on the Democrat and Republican sides."

With time running out in the session, the lease signing ceremony was staged in Springfield June 29. Reinsdorf and Einhorn were there. To show the unified support for the package, Thompson had representatives of the four legislative leaders and a representative from Chicago Mayor Eugene Sawyer's office join him up front. "The details of the lease agreement are in place and must be considered by the General Assembly within the next 36 hours," Thompson said. If the bill had not been voted on by midnight June 30, it would have required an impossible three-fifths majority vote. One added detail in the lease assured minority contractors 25 percent of the construction work on the stadium, guaranteeing the support of most of the black legislative caucus.

In the afternoon of June 30 the Senate approved Zito's plan to buy the team, but no action was taken on approving the signed lease. At 5 p.m. Rep. Robert W. Churchill (R-62, Lake Villa), who handled the issue for House Republicans, told reporters he had only 5-10 committed votes. If the tax hike had been approved, Churchill said he would have had the 24 expected Republican votes.

Finally at 11:20 p.m. the Senate began debate on the package, with the House following about 15 minutes later. After the Senate debate, President Philip J. Rock (D-8, Oak Park) closed voting and announced the roll. There were 30 yes votes, the minimum required.

The pressure was now on the House as Thompson, Lt. Gov. George H. Ryan and members of Thompson's staff moved across the rotunda and began lobbying representatives on the floor of the House. Senators, having adjourned for the night, filled the rear of the House chamber. When the voting opened in the House several members did not register their votes on the electronic board. The voting was closed, thereby forcing representatives to declare their votes. The board showed only 54 yes votes, and 60 were required. The roll call was not announced, giving Thompson and other supporters time to convince reluctant representatives to change their votes. The clock on the vote board was switched off, so nobody could be sure of the exact time. Slowly six representatives, three from each party, asked that their votes be changed from no to yes. When the 60th vote was lit up on the board the vote was immediately announced, as well as the time of 11:59 p.m., although the printed roll call recorded the time at 12:03 a.m.

On July 2 the House voted to extend the deadline for the bill containing Zito's plan to December 8, 1988. If anything happens that would allow the White Sox to void the lease, Zito says he will attempt to pass his bill during the veto session. □

Brett D. Johnson

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