Chicago Mayor Rahm Emanuel will propose a budget today for a $195 million basketball arena for private school DePaul University, which he believes will generate tax dollars and fill the city’s gaping $1 billion school funding gap.
The plan will require $125 million from taxpayers, $70 million from hotel taxes and $55 million from tax-incremented financing (TIF). The arena includes new hotels, restaurants and retail space.
Alderman Pat Dowell on the city’s board said that building the new arena is about fostering economic growth, though the arena would have to compete with the existing United Center just a few miles down the road.
Marc Ganis, a local arena expert, called the plan complete lunacy.
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“It makes no economic sense whatsoever.” Ganis said, “As someone who has worked on projects like these for decades, I can tell you there is absolutely no way for this to make any sense in any way. It is not in the realm of possibility.”
Though Emanuel is eager to increase city revenue, he has wanted to abandon the Allstate Center, a facility closer to DePaul’s campus, for some time. His impatience may throw residents into debt, critics say.
According to a Harvard study in 2010, the cost of land, infrastructure, operations and lost property taxes involved in taxpayer funded sports stadiums and arenas increased taxpayer bills by 25 percent, from $89 million to $259 million.
In addition to pricey introduction costs, arenas do not always usher through economic benefits. Glendale, Arizona laid off 49 public workers and cut social services after its Jobing.com Arena failed to generate revenue.
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With the potential of so much, debt DePaul’s basketball team can’t afford to lose.