Jim O'Donnell: Boom or doomed? An expert's views on the Bears and Arlington Park
David Trandel looks at the 326 acres currently housing Arlington Park and sees a once-in-a-century opportunity for an inspired NFL ownership.
Then the 57-year-old commercial real estate maestro considers the more recent business history of his beloved Bears and winces at the thought of blessed opportunity doomed to be lost.
"This is so obvious that I fear only the Bears could be too timid to seize the moment," says Trandel, the CEO of North Shore-based Stonestreet Partners LLC.
"You, me and the postman would already have the finances set and this deal done. A major-market NFL team, far too often disappointing its fans and stuck in a leased, undersized stadium that's hard to get to and has no dome. And this opportunity right here, right now - with a franchise undervalued at $3.5 billion to back it all up."
Is the spirit of "Papa Bear" George Halas listening?
• • •
FEW ARE AS SEASONED in their contemporary ability to get a sizable project done on land near Arlington Park as Trandel.
Since 2011, his Stonestreet - and subsequently Trandel's Springbank Capital - has been the engine behind the redevelopment of the 27 acres southwest of the track at the northeast corner of Euclid Avenue and Rohlwing Road.
Originally, the land was part of the Arlington Park property owned by the ruling Lindheimer-Everett family (1940-1969).
In 1969, track president Marje Everett opened the 450-room "Arlington Park Towers" on the resort-like site. Everett left Illinois racing in 1970, purchasing Hollywood Park two years later. Arlington Park Towers became a Hilton and finally a Sheraton that wheezed to an end in 2009.
Enter Trandel and associates.
With visions of a $300 million "Arlington Downs" project to include conversion of the hotel into a residential tower plus an adjacent new hotel, entertainment district and water park, internal optimism reigned.
Then assorted market factors and a roller-coastering economy forced downscaling.
The uncertain future of the racetrack didn't help - as Dick Duchossois's regal touch steadily gave way to the stark "shareholder value" rule of Churchill Downs Inc.
"We completed the conversion of the hotel into the 214-unit luxury apartment tower 'Arlington One' in 2014," Trandel said. "Other aspects were put on hold. An adjacent 263-unit upscale apartment building on the southeast portion of the property is close to opening."
Its name, according to Trandel - possibly in a plea for sweetness from the gods of pro football - will likely be "Payton Place."
• • •
CHURCHILL DOWNS INC. IS REPRESENTED by the West suburban office of the CBRE Group in the sale of the racetrack land.
The broker's point men are vice presidents Tony Gange and Matt Ishikawa.
Although an All-State baseball selection from nearby Prospect High School in 1982, Trandel had no qualms about guest quarterbacking key elements of the land sale and multibillion-dollar development of George S. Halas Stadium at Arlington Park.
"Since Ted Phillips's confirmation of the Bears bid on the property (announced June 17), every aspect now hinges on the state of negotiations or if an unannounced agreement already exists between the team and Churchill Downs," Trandel said.
"The land without the Bears is worth less than many people probably think. For one thing, perimeter land is far more valuable than interior land to a developer on that sort of acreage. And there's a whole lot more interior than exterior at Arlington.
"Without the Bears, I think CDI would be lucky to get $100 million for the 326 acres. The price could be as low as $60 million and as high as $120 million.
"The good news for CDI shareholders is all that money will drop to the bottom line. That's the nature of a once-in-a-lifetime sale like this."
But, Trandel adds, if the Bears hierarchy is negotiating with vision and determination, myriad possibilities enter the frame.
• • •
"A BEST-CASE SCENARIO for CDI would be to get a commitment from the Bears to build their billion-dollar stadium on a portion of the land," Trandel said. "That would increase the value of the remaining land at least fourfold.
"CDI and CBRE could then peddle the remainder - at least 200 acres - at the increased rate. That is, if Bears ownership would let them get away with it.
"A truly aggressive, hands-on owner - like a Jerry Jones or a Stan Kroenke or even a Tom Ricketts - would not allow that to happen. They'd find the resources to buy every inch.
"My personal opinion is that I would much rather have (Bears minority partner) Pat Ryan spearheading the negotiation from the Bears side than Ted Phillips and George McCaskey.
"Mr. Ryan is a driven businessman. He took AON public quite successfully, recharged with his Ryan Specialty Group and came close to bringing the 2016 Summer Olympics to Chicago.
"And, is there anything he hasn't done to assure that Northwestern athletics can consistently attempt to compete at the highest level of the Big Ten?"
• • •
PER TRANDEL, SOME ASSUMPTIVE MATHEMATICS and negotiating points regarding the Bears and Arlington Park:
• CDI wants $100M for the 326 acres;
• The Bears need one-third of that for their new stadium and parking - approximately 100 acres;
• Rather than offer $33.3M for the 100 acres, the Bears should begin at $1 ("a token one dollar") and stop at $10M;
• If CDI accepts $10M for 100 acres because it will house the new Halas Stadium, its remaining acreage likely increases in projected value from $66.7M to more than $200M.
"A brilliant deal by both sides," Trandel said. "CDI then sells the remaining acreage to a developer who will make most of it residential with enough park land and complementary amenities and necessities.
"I think on those 200 or so acres, among other things, the market could absorb about
1,000 residential units with a starting price not all that far above the current median in Arlington Heights, which is roughly $450,000.
"So for approximately $650,000, even a reasonably well-resourced young household could make a starter purchase at the new 'Bears-ville' or whatever and Churchill rolls on to new initiatives."
• • •
MRS. VIRGINIA MCCASKEY - age 98 - is the sole surviving second-generation heir to her father's football team.
It is credibly estimated that in the family's next three generations - extending to her great-grandchildren - there are close to 80 more heirs and counting.
It is also estimated that if the Bears do build and own a new state-of-technology stadium, the value of the franchise will rapidly ascend to more than $5 billion.
Like many ardent Bears fans, Trandel has little faith in any remaining family members to consistently return the team to its long-ago status as one of the perennial best in the NFL.
"All the acorns have fallen far from the tree of George Halas," the commercial real estate mastermind said. "I don't think it's in their DNA to think so big and close on a deal even as obvious as Arlington.
"I don't know what more has to happen to induce them to sell. Even if Pat Ryan were to purchase 70 percent of the McCaskey-Halas 80 percent, that would leave the family with 10 percent of a $5 billion franchise along with approximately $2.5 billion pretax to divide.
"That is serious money."
• • •
AND WHAT ABOUT THE BEARS and a stadium-ready slice of the Arlington Park acreage?
"This is such an obvious idea because while large in scale, it is simple in practice and a proven recipe," Trandel said. "I could give you the names of six or seven equity firms off the top of my head that would be willing to come in with any money necessary to get it done.
"The Arlington site should be like a dream for the Bears. A location that has served as a major sports venue for close to 100 years. Thriving suburbs all around. Twenty minutes from O'Hare and all of the hotels in Rosemont. And a Metra station right at the front door.
"But this is Chicago, and Cook County, and the state of Illinois and the Chicago Bears," he concluded.
"With the exception of the Village of Arlington Heights, governance in Illinois has been at best underwhelming. When a great idea and opportunity surfaces, all the competing constituencies race to get a hand out instead of letting the market drive the decision.
"And unlike Coach Halas, have you ever seen a McCaskey that would have the vision to start an idea called 'The NFL'?"
Thus, blessed Bears opportunity resulting in inspired organizational fulfillment at Arlington Park?
Or just another Chicago chapter of pro football boom gone doom?
• Jim O'Donnell's Sports & Media column appears Thursday and Sunday. Reach him at jimodonnelldh@yahoo.com.