December 12, 2008
TRIBUNE CO. | Bond sale possible if ticket prices limited, other conditions
BY DAVID ROEDER email@example.com
The chairman of the Illinois Finance Authority told a legislative panel Thursday he’s willing to arrange a bond sale for the purchase of Wrigley Field despite the matter’s entanglement in the Gov. Blagojevich scandal.
William Brandt Jr. said he’s asked for three conditions from Tribune Co., owner of Wrigley and the Chicago Cubs. One is a Tribune guarantee for the bonds, and Brandt said that may be impossible now that the media company is in bankruptcy.
The other conditions, he said, would be limits on ticket price increases and an agreement on who would own the park once the bonds were paid off in perhaps 30 years.
Brandt said a government agency, perhaps the Chicago Park District, could be the right owner.
IFA’s negotiations with Tribune came to light in the federal government’s charges against Blagojevich, issued Tuesday. The charges refer to wiretapped conversations in which the governor allegedly threatens to scrap the Wrigley deal unless the Chicago Tribune fires certain critical editorial writers.
Brandt said he was “astonished” when he read the allegations. The IFA’s newly hired executive director, John Filan, had a similar reaction and said he never heard Blagojevich make extortionist demands of the Tribune.
Filan, who had been Blagojevich’s top aide for fiscal matters, said the governor’s office always has supported a state purchase of Wrigley Field in the name of keeping the Cubs in the landmark stadium. “If it keeps jobs in the state of Illinois, I think people are for it,” Filan said.
An IFA deal does not involve tax dollars because the agency issues its own bonds. They’d be paid with rent from the Cubs.
Brandt, a business turnaround expert, emphasized that talks with the Tribune were preliminary and that he’s never seen a full proposal from the company. But he estimated money from the Cubs would justify $235 million to $275 million in bonds.
Tribune has the Cubs for sale to retire debt. Brandt said a state-backed purchase of Wrigley would compel any new owner to stay there and prevent any threats to build a new ballpark.
In the Blagojevich tapes, his chief of staff, John Harris, allegedly said the bond sale could help Tribune save more than $100 million in capital gains taxes.
Tribune Chairman Sam Zell appeared to back away from the bond proposal during an interview with CNBC on Wednesday. He said the company wondered if the deal made
sense “and we never really got to find out since we never took it very far.”
Brandt said capital gains never came up in talks with the IFA. In any case, he said, bankruptcy may lead Tribune to sell other assets, especially its daily newspapers, at a loss that would negate any tax liability from the Cubs.
He testified before the Legislative Audit Commission during a review of audit results for state agencies.