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SBJ/October 15 - 21, 2001/Marketingsponsorship
Bears’ stadium deal reaches closing time
Published October 15, 2001
Bankers for the Chicago Bears were set to close at press time on the financing for the team's $600 million overhaul of Soldier Field, a deal that was on shaky ground after the Sept. 11 terrorist attacks.
Bankers for the Bears said they expected to complete the team's financing on Oct. 12. The renovation will be funded by $400 million in bonds backed by a statewide hotel tax, a $100 million loan from the NFL and $100 million from the Bears.
The bonds were sold on Oct. 8. Of the Bears' $100 million commitment, $60 million is expected to come from the sale of personal seat licenses.
"The final financing piece is now in place," said Marc Ganis, president of SportsCorp Ltd., a Chicago-based sports consultant who was not involved in the project's financing.
The project, announced nearly a year ago, has faced a raft of criticism and litigation from local groups that opposed the renovated stadium's design and impact on Chicago's lakefront.
More doubt was cast on the financial viability of the renovation after last month's terrorist attacks that caused a slowdown in tourism, prompting some officials to question whether there would be sufficient hotel tax revenue to pay off the bonds.
After the attacks, the Bears withdrew plans to sell the naming rights for the renovated stadium. Soldier Field opened in 1924 and is dedicated as a memorial to the soldiers who fought in World War I.
The decision to withdraw naming rights will cost the Bears about $8 million in annual revenue, and Ganis said that the Bears will generate about $35 million more annually in cash from the rebuilt stadium.
"Giving up the naming rights was a big pill to swallow, but it had to be swallowed or else the deal would have unraveled," Ganis said.
The complete financing package will clear the way for construction to begin after the season ends in early January.
"It's a terrific outcome for the city and for the Bears," said Brian McGough, managing director for Banc One Capital Markets, which was retained by the Bears to arrange their funding for the project.
The renovation timetable already faces potential setbacks. Two lawsuits must be settled before major construction can begin, and the NFL's decision to reschedule week two of the league's games that were postponed due to the terrorist attacks could add to the delay.
The Bears' original schedule called for the team to play its last two games on the road to allow for an early start to the renovation. The Bears were supposed to play the Jacksonville Jaguars in week two, but now the game will be played Jan. 6 at Soldier Field, setting back the initial construction timetable.
The Bears will play their home games next season at Memorial Stadium on the University of Illinois campus in Champaign. The renovated stadium in Chicago is expected to be completed in time for the 2003 season.