Chicago Bears explore ditching city. What are the costs if they do?

News of the Bears inking a $197.2 million agreement to buy a giant parcel of land in the Chicago suburb Arlington Heights shook the city awake early Wednesday like a frigid gust off the lakefront during a January game at Soldier Field.

The deal is far from done, but it signals the Bears are serious about exploring a move out of Chicago to build a new state-of-the-art stadium, and not merely bluffing as Mayor Lori Lightfoot suggested in June when the team’s interest in the land first surfaced. Wednesday’s agreement allows for the Bears to more closely study constructing a stadium at the 326-acre site of Arlington International Racecourse, where owner Churchill Inc. held its final horse races last weekend.

But like most big decisions in business, sports — and government — the final call will rely heavily on the finances.

The McCaskey family that owns the Bears has been tight-lipped about its pursuit of a new home, and the Bears remain a private business enterprise, which leaves many of the questions about how the team might finance a potentially multibillion dollar stadium unanswered for now.

What is more clear is the potential cost to the city of Chicago if its marquee tenant for Soldier Field leaves, and how much the Bears might have to pony up to break their lease with the city.

Here’s a look at some of the money matters surrounding the team’s possible bolt to the ‘burbs:

How much would a new stadium cost the Bears?

This, of course, largely would be up to the Bears. But the price tags on several new stadiums in the NFL suggest the cost would approach $2 billion, if not more.

A Tribune analysis in July found that the average cost of the seven most recent NFL stadiums was $2.2 billion in today’s dollars. The breakdown:

—Allegiant Stadium — Las Vegas: $1.9 billion, opened in 2020

—SoFi Stadium — Los Angeles: $5.5 billion, opened in 2020

—Mercedes-Benz Stadium — Atlanta: $1.5 billion, opened in 2017 ($1.64 billion today)

—US Bank Stadium — Minneapolis: $1.1 billion, opened in 2016 ($1.23 billion today)

—Levi’s Stadium — San Francisco: $1.3 billion, opened in 2014 ($1.47 billion today)

—MetLife Stadium — New York: $1.7 billion, opened in 2010 ($2.1 billion today)

—AT&T Stadium — Dallas: $1.4 billion, opened in 2009 ($1.85 billion today)

The land alone would cost the Bears $197.2 million, according to Wednesday’s announcement, but the team would not need the entire 326-acre site for the stadium and parking, leaving other development opportunities. Churchill Downs said Wednesday it anticipated closing the sale in late 2022 or early 2023.

Would taxpayers pay for a new stadium?

This seems unlikely — at least in a major way.

If the Bears moved to Arlington Heights, it’s not hard to envision the suburb picking up some costs related to infrastructure in and around the stadium site. Beyond that, a major public financing of a Bears stadium would be a stretch — especially considering it’s only been 17 years since the completion of the $690 million Soldier Field renovation that placed a glass and steel saucerlike structure atop the limestone and colonnades of the original 1924 monument to veterans of World War I.

Taxpayers covered $432 million of the Soldier Field renovation project, a figure that will balloon substantially once the hundreds of millions of dollars in debt and interest are paid off in 2032. Both the city and state remain cash-strapped amid deep budget challenges, making the political appetite to fund yet another stadium hard to fathom.

How would the Bears finance a new stadium?

This is harder to decipher. Unlike many NFL teams, the Bears are not owned by a billionaire who was independently wealthy before the purchase of the team.

The McCaskey family’s wealth is believed to largely be derived from the team, which Forbes has valued at $3.5 billion. That value, of course, only would come to fruition with a sale.

With family matriarch Virginia McCaskey, the daughter of founding owner George Halas, closing in on her 99th birthday, there has been speculation for years that the next generation of McCaskeys might pursue a sale.

Considering the team is worth $3.5 billion despite having never owned its own stadium since moving to Chicago from Decatur in 1921, it’s not hard to imagine the franchise’s value increasing with a new retractable-roof or domed stadium that could play host to other events, such as the NCAA Final Four.

Because the Arlington Heights site is large enough to allow for other development, it’s possible the Bears would pursue a partnership with a developer to help cover construction costs with revenue shared from other projects on the site. It’s also likely the NFL would kick in tens of millions of dollars in loans, as it has to help other teams with new stadiums. For example, NFL owners approved a $500 million loan for the L.A. Rams to build SoFi Stadium.

Back when the Soldier Field renovation project was sold to the public, a major talking point was how the Bears were covering more than $200 million of the cost, which at the time was called the largest private contribution for a publicly-owned NFL stadium. But a 2002 Tribune investigation found the Bears actually only contributed about $30 million of their own money, with the remainder covered by $100 million from the NFL and the sale of personal seat licenses to season-ticket holders.

With the construction of a new stadium, the Bears presumably once again could count on the sale of personal seat licenses to season-ticket holders, but they would be asking them to do so roughly 20 years after previously ponying up at Soldier Field.

Also, the Bears would be able to generate much more income from a new stadium than their deal at Soldier Field, which limits them to the revenue from tickets, concessions, stadium signage and the use of 4,250 parking spots. And unlike other NFL franchises that own their own stadiums, the Bears’ revenues are limited to the 10 home games played per season (including the preseason).

The Park District collects all revenue from non-Bears events at the stadium and entered into an agreement with Major League Soccer’s Chicago Fire to play at the venue beginning with the 2020 season. The Bears also could pursue a lucrative naming-rights deal for their new stadium, which is not allowed at Soldier Field.

Can the Bears pay to break their lease early in Chicago?

Yes, and a July analysis by the Tribune found the expense would be relative peanuts compared with the price of building a new stadium.

The Bears current lease payment to the Chicago Park District is $6.48 million per year, though the team only paid $3.1 million in 2020 after fans were not allowed to attend games because of the pandemic.

A Tribune review of the team’s 120-page lease with the city showed it would not be difficult for the Bears to break the agreement before it ends in 2033, and such a move likely would trigger negotiations between the team and the Park District to reach a financial settlement.

But in the event the Bears were to leave Chicago for the northwest suburbs without reaching such a settlement, a damages clause in the lease requires the team to pay 150% of the money it owes on the remainder of the lease to the city within 30 days. The fewer years left on the lease, the smaller the payment becomes.

If the Bears were to break the lease five years from now, in 2026, the team would have to pay $84 million in damages to the city, the analysis found. That estimate assumes the Bears’ inflation-adjusted payments to the city would continue to rise at a pace similar to increases since the lease’s inception in 2003. If the team waited beyond 2026 to leave Soldier Field, the financial penalty would be less.

An $84 million fine might sound like a lot of money, but in the high-priced world of the NFL it represents just 3% of the $2.2 billion average cost of the league’s seven newest stadiums.

The Tribune analysis found the potential fines if the Bears broke the lease in subsequent years would be $74 million in 2027; $63.8 million in 2028; $53.3 million in 2029; $42.7 million in 2030; $32.1 million in 2031; $21.6 million in 2032; and $11 million in 2033.

Are Chicago taxpayers still on the hook for the Soldier Field renovation if the Bears leave?

Yes. Soldier Field is owned by the Chicago Park District and the bonds for its renovation are paid for by the Illinois Sports Facilities Authority, a city-state agency controlled by the governor.

The $432 million in public bonds will balloon substantially once the hundreds of millions of dollars in debt and interest are paid off in 2032. The bonds were timed to be paid off with the expiration of the team’s lease in 2033.

The public portion of this cost is largely funded by a city hotel tax. If that hotel tax revenue falls short, it is City Hall and city taxpayers, not the state, that is on the hook to make up the difference. This happened in 2011, when then-Mayor Rahm Emanuel groused that city taxpayers should not be an ATM for Soldier Field, though he never came up with a new funding mechanism.

Because of the pandemic, the city’s hotel tax once again did not generate enough revenue to cover the debt payments in 2020. The sports facilities authority approved a one-time fix in May to push out $20 million in debt payments to cover the tax shortfall to prevent City Hall from having to come up with the money.

It’s not clear when hotel tax revenue will improve enough to again fully cover the Soldier Field debt payments. On top of that, the debt payments are backloaded, meaning the hotel tax will have to generate even more income in the final years of payments. If it falls short, City Hall once again would be on the hook to make up the difference.

In addition, the sports facilities authority provides a roughly $3 million stipend to the Park District to make improvements to Soldier Field under its lease with the Bears. Park District officials have raised questions about whether that money would continue to be available if hotel tax revenues do not rebound amid the pandemic.

If the Bears leave Chicago before its Soldier Field lease expires, whether the city has enough money to cover the remaining debt payments likely would depend on the terms of its financial settlement with the team and the future health of the city’s hotel tax revenue. Of course, once the debt payments are finally retired, the city would have that portion of the hotel tax to spend anew on Soldier Field or elsewhere in the city budget.