Could financing tool help Bears land at Arlington Park? They'll need help from state lawmakers
Could a so-called PILOT be the financing tool that helps the Chicago Bears take off from Chicago and land in Arlington Heights?
Village and state officials confirmed Wednesday the NFL franchise is exploring use of a program called Payments in Lieu of Taxes as one piece of the financial equation to help pay for its $5 billion redevelopment at Arlington Park.
“My understanding is they are floating this idea to our state legislators to see what their thoughts are on it and to see if they're receptive to it,” said Mayor Tom Hayes. “It's a creative way to address some of the financing issues they'll be dealing with.”
Hayes stopped short of fully endorsing the specific funding mechanism, having just learned of it Wednesday, but said he is supportive of “creative ways” that might assist the team with financing issues, and help make their relocation to Arlington Park a reality.
A Bears spokesman said Wednesday the team is continuing its due diligence studying how to finance the massive redevelopment project but has made no formal requests of politicians at this point.
“As we have mentioned publicly, in order for this project to move forward, we will need to have property tax certainty and infrastructure support,” said Scott Hagel, the team's vice president of marketing and communications, in a statement.
PILOT, also known as PILT, is a process more commonly used on the federal level in cases where the government makes payments to municipalities to help offset property tax losses due to the existence of nontaxable federal lands within their boundaries.
But the concept is also used in some parts of the country where municipalities have asked nonprofits — like hospitals, universities and cultural institutions — that occupy valuable real estate to make payments to supplement local revenue and pay for essential services, according to a 2015 memo compiled by then-Chicago Alderman Michele Smith's office.
The Bears or any other business may see PILOT, though, as an economic development incentive that would give them the property tax “certainty” they're looking for. If it were allowed for a private enterprise, the mechanism would allow the Bears to pay less than the regular property taxes on the sprawling 326-acre shuttered racetrack site.
It also could be more palatable to local school districts and other local taxing bodies than tax increment financing, which would divert some of their property taxes into the Bears' proposed mixed-use project. Under PILOT, payments to local governments could be negotiated.
But none of that can happen without a change to state law. In Illinois, the only groups exempt from property taxes are government, religious, educational and charitable, according to the aldermanic memo.
“I have not seen (PILOT) for a for-profit, and frankly, I'm not sure that's a box we want to open,” said state Sen. Ann Gillespie, an Arlington Heights Democrat whose district includes the racetrack site.
Gillespie, a TIF critic who has proposed reforms to the state law, has already spoken out against the need for that type of local tax help for the Bears redevelopment.
State Rep. Mark Walker, a fellow Arlington Heights Democrat, said he was skeptical about the payments-in-lieu proposal, calling it a “long shot” in Springfield.
“This is an entirely new kind of deal, if it were to be done, and I don't know what the likelihood is,” Walker said.
Both local legislators — as well as Republican state Rep. Tom Morrison of Palatine, whose district includes Arlington Park — said they personally haven't been lobbied by the Bears on the proposal yet.
The organization is still in its due diligence phase for a pending $197.2 million purchase of the racetrack from Churchill Downs Inc. A closing is scheduled for the first quarter of 2023.