As Indiana lawmakers approved a plan to spend up to $1 billion on an enclosed stadium in Hammond for the Chicago Bears, public finance analysts are raising sharp questions about whether the proposed tax revenues will be sufficient to cover the construction debt.
The Bears have pledged $2 billion toward building the stadium and would lease the site while collecting all operating revenue. However, economists Deborah Carroll of the University of Illinois Chicago and Geoffrey Propheter of the University of Colorado Denver calculated that a 30-year bond of $1 billion would require annual debt service payments ranging from $60 million to $62 million.
A fiscal analysis by Indiana’s Legislative Services Agency estimated the proposed tax revenues: a 1% food and beverage tax in Lake and Porter counties could generate $12 million to $18 million annually, a 5% increase to Lake County’s innkeeper’s tax could bring in $5 million, and a 12% admissions tax could yield approximately $12 million per year. A Professional Sports Development Area could contribute additional revenue, though the legislative analysis projected it would generate less than the $16 million produced by a similar area around Lucas Oil Stadium in Indianapolis.
In a best-case scenario, total annual tax revenue could reach approximately $55 million — roughly $5 million short of what is needed for annual debt service, according to the two economists’ calculations.
Carroll warned that if revenue assumptions fail to materialize, the reality could drastically change the financial scenario. She noted that while some revenue would come from out-of-state visitors, she doubted many would stay overnight, limiting hotel tax collections.
The Bears said they are assessing additional parcels in the Wolf Lake region, including an 83-acre site currently used for tank storage of food oils, petrochemicals, and de-icers. The site is near protected wetlands and a NIPSCO electrical substation.
In Illinois, Governor JB Pritzker has said the state will not pay to build a stadium but would fund infrastructure costs like roads and sewers, estimated at $855 million for the team’s Arlington Heights property. A consultant for the Bears projected that a $2 billion Arlington Heights stadium would create 33,000 construction jobs, 9,000 permanent jobs, and $1 billion in annual economic impact.
Economists generally remain skeptical of such projections, noting that public financing for sports stadiums tends to be a poor deal for taxpayers.
Sources: Chicago Tribune, Chicago Tribune Indiana stadium coverage
