Owners of the Chicago White Sox have sent prospective developers of a downtown sports stadium a list of 12 ”minimum” requirements so favorable to the team that developers say the project may die unless the Sox relent.
”They want all the benefits of ownership and none of the liabilities,”
said one developer after reviewing four pages of ”minimum criteria” sent Jan. 7 by Sox owners Jerry Reinsdorf and Eddie Einhorn.
In the letter, Reinsdorf and Einhorn propose that the Sox, as the stadium`s principal tenant, keep virtually all income from ticket sales, concessions, parking and in-stadium display advertisements.
They also propose that the Sox pay no rent for their use of the 50,000-seat stadium.
The only revenue left to the developers–in effect, the only money available to finance construction of the $125 million ballpark–would come from rents paid by corporations and others who lease skyboxes and luxury seats.
Reinsdorf and Einhorn further ask that their terms be made part of a letter of intent to be signed by themselves and the developers no later than Feb. 7. The letter would then have to be ratified by the Chicago City Council no later than Feb. 21. ”We gave them a deadline, and now they have one month to meet it,” Reinsdorf said.
Adding to the atmosphere of haste, Reinsdorf said Friday night the team has received a directive from American League president Bobby Brown urging the Sox to find an alternative to Comiskey Park.
”It was pretty strong,” Reinsdorf said. ”They are telling us to leave. They know that staying in Comiskey Park is a financial disaster for us. They don`t want to see us go broke and have the Chicago franchise become a league problem.”
Bob Fishel, a spokesman for Brown, said that ”to my knowledge” the White Sox had not solicited the letter to use as a negotiating device.
”This is a sincere thing on the part of the league president” Fishel said. ”People keep selling the White Sox franchise because they can`t afford to operate Comiskey Park. He (Brown) doesn`t want that to happen.”
Fishel said Brown`s letter included an ”implied deadline” which he did not disclose. However, Howard Pizer, White Sox executive vice president, said the American League`s deadline ”talks about a long time frame, a lot longer than we feel is realistic.”
One of the co-developers of the proposed downtown sports stadium, Robert Wislow, said Friday night that he did not think the directive from the American League would have any effect on the negotiations between the White Sox, the developers and the city of Chicago. ”I think they (Reinsdorf and Einhorn) have pretty well decided to leave Comiskey Park anyway,” Wislow said.
The long-term rentals from the skyboxes and the luxury seats–the only money the White Sox are willing to surrender to get a new downtown stadium
–could prove substantial, up to $10 million a year according to one estimate. That figure is based on 100 skyboxes renting for $50,000 a season, plus 5,000 luxury seats pre-leased at $1,000 each.
But developers say those rent payments would not be enough to safely cover the annual debt service on construction bonds, estimated at a minimum of $8 million, plus numerous other expenses that are assigned to the stadium`s owner under the Reinsdorf-Einhorn plan.
Einhorn defended the requirements Friday, calling them ”very reasonable proposals” aimed at ”making sure we`re in no worse shape than we are now”
at Comiskey Park.
”Here`s what we need,” Einhorn said of the list. ”We know it`s difficult. We know it`s tough.”
Talks between the Sox and the developers began in earnest a month ago when Mayor Harold Washington picked two prominent local developers to negotiate an agreement for a new stadium on dormant railyards south of the Loop.
The city would buy and own the land under the stadium. The ballpark would be built for a fee by the developers and then turned over to a newly formed public authority, which would act as landlord.
On the advice of his three-member stadium task force, the mayor picked as co-developers Robert Wislow, chairman of U.S. Equities Inc., and Daniel Shannon, president of GSI Inc. Both men have headed small groups of real estate professionals that have been trying for a year to piece together a stadium deal at that site.
The mayor`s stadium initiative began last spring as an effort to entice all the city`s professional teams into a multipurpose sports complex. But the nature of the quest gradually changed into building a baseball-only stadium for the Sox.
Advisers to the mayor explain that only the Sox are ready and willing to help develop a stadium. They also argue that the city is in imminent danger of losing the team to the suburbs or to another big city unless Chicago helps it build a replacement for 75-year-old Comiskey Park.
Reinsdorf`s Balcor Co. owns a potential stadium site at the southwest corner of Swift Road and Lake Street in west suburban Addison. A development arm of the White Sox recently won interim approval for a low-interest state loan to build a ballpark there. Sox officials say, however, that Addison remains just one of several options.
On the record, the mayor`s handpicked developers claim that the list of Sox requirements amounts to a tough opening position and is open to negotiation.
”Sure they`re going to ask for the moon,” said Martin R. Rogan, vice president at Shannon`s GSI Inc. ”But if everyone works together, it can still go.”
Rogan said the development group is fashioning a counter-proposal, and he predicted that some give-and-take wrangling will inevitably occur.
Einhorn would say only, ”I can`t tell you there`s any `give` ” in the Sox position.
Others inside the developer`s camp aren`t optimistic.
”These terms are quite onerous,” said a developer who asked not to be identified. He predicted it will be impossible for the mayor`s development team to meet the conditions, and that the Sox organization could not fashion as sweet a deal should it develop its own facility in Addison.
The Sox requirements call for:
— An open-air or retractable-dome natural turf stadium configured for baseball only, because a football-baseball combination would ”lose the intimacy demanded by Sox fans.”
— Sox control of stadium design and day-to-day operations.
— Developers to ”arrange” for all public-works infrastructure, such as sewers, utility lines, highway and rapid transit improvements–a cost city officials have estimated at $55 million.
— Developers to ”arrange” for traffic police outside the stadium on game days.
— A ban on other stadium events that might interfere with the team`s 81 home games, though the Chicago Cubs would be permitted to play up to 18 regular season games ”plus post-season play.” Cub executives have said they still hope to reach a compromise with Wrigleyville residents to let the team install lights at Wrigley Field for a limited night schedule, eliminating the need to play elsewhere.
— Surface parking spaces for 8,000 cars.
— A waiver by the city of its amusement and parking taxes, plus a waiver, or absorption by the developer-owner, of all real estate taxes, along with a ban on new city taxes once the stadium is built.
— The developer-owner to absorb all stadium construction, improvement, maintenance, insurance and utility costs.
— The Sox to ”retain 100 percent” of concession, parking and advertising revenue related to its baseball games.
