Damning Article on New Chicago Arena

[NJRedman]

I am usually on the "right" side of politics so why is Chicago funding a private university? Seems pretty wrong to me.

They aren't funding DePaul, if anything DePaul is funding the city. The project is not just the arena, a large venue is just something the project wanted. DePaul kicks in $70 million and gets a few things in return... naming rights, primary tenant, the venue is built to be suitable for them. The city will own the arena and charge DePaul rent to use it.

I know I said this just above, but the only way you can criticize DePaul's involvement from a taxpayer perspective is if you know how DePaul changed the project. Given that they're kicking in so much money and based on the city's desire for a casino (thus likely wanting a large venue already), I have a hard time thinking this cost taxpayers money. The project costs tax money, definitely (I believe most or all of it is already collected, though), but DePaul's involvement may not have.

Personally, I just don't believe private money should mix with public but obviously it does all the time.

That's too harsh a stance, government should be working with private entitles if it's the smart and/or cost effective way to accomplish something. In a sense, if the government doesn't work with private entities, who are they working with? If the government thought bringing DePaul on board was smart for the taxpayer, then it was a proper decision.

From what I understood DePaul would pay 70 mil, Chicago would pay 70 mil and they would sell the naming rights for the other 70 mil. Also I doubt if DePaul is paying 70 mil that they would have to pay to play there. I'm sure that 70 mil covers their rent for the first decade or so. Thats what United Center was offering and i'm sure DePaul wouldn't agree to help pay for the building of the Arena just so they could pay more to play a game there.

[XU85]

Just curious, do any Depaul fans post or follow this board?

[MUSeashells&Balloons]

From what I understood DePaul would pay 70 mil, Chicago would pay 70 mil and they would sell the naming rights for the other 70 mil. Also I doubt if DePaul is paying 70 mil that they would have to pay to play there. I'm sure that 70 mil covers their rent for the first decade or so. Thats what United Center was offering and i'm sure DePaul wouldn't agree to help pay for the building of the Arena just so they could pay more to play a game there.

From ESPN:
But here's the key: DePaul won't own this arena and will pay rent, reportedly $25,000 a game for the men, $15,000 for the women. As the "anchor tenant," DePaul will get 17 men's basketball dates and as many as 10 for the successful women's program headed by alum Doug Bruno. The school will also hold graduation there.
http://espn.go.com/chicago/mens-college-basketball/story/_/id/9285776/depaul-blue-demons-clear-winner-arena-deal

[yorost]

The naming rights are part of what DePaul gets for it's $70 million. I'm not sure how that got out it would cover a third of the cost. A DePaul fan here posted...

FWIW, there's a far more reliable report that pegs the cost of this at $195 million, with the financing breakdown as follows:

$70 million from DePaul, who would be allowed to sell the naming rights.
$70 million from McPier, though the sale of bonds.
$55 million from the City of Chicago through Tax Increment Financing.

Also, it's being reported that the development will include hotels, restaurants, and some retail.

I think the most important thing DePaul got was the project making sure the arena was suitable for their needs. If they didn't put the money in it might not have been designed to handle basketball or been too small. Their involvement probably upped the cost of the project, both with up front and recurring operational costs. Whatever that difference represented, a big chunk of their $70 million is likely because of that. I presume they got naming rights since those changes and DePaul's involvement made the naming more valuable. Even if DePaul stinks, games there will apparently be on FS1 and get exposure.

[DudeAnon]

Personally, I just don't believe private money should mix with public but obviously it does all the time.

That's too harsh a stance, government should be working with private entitles if it's the smart and/or cost effective way to accomplish something. In a sense, if the government doesn't work with private entities, who are they working with? If the government thought bringing DePaul on board was smart for the taxpayer, then it was a proper decision.[/quote]

I don't think its too harsh, I believe it keeps things clean. When you mix public and private, corruption is right around the corner. In my opinion.

[yorost]

Corruption is right around the corner when you have money or power of any sort.

It's harsh because the government cannot avoid working with private entities. Unless you go to an extreme small government model or extreme socialist government, public and private will be working together financially. It doesn't make sense to say money from private and public shouldn't mix. How do you avoid it? With something like this in DePaul, the notion of what is happening is almost ideal, the private entity which will benefit from a public project is paying a hefty share of the cost. Corruption would be DePaul paying nothing and the exact same project going in. I would argue that if DePaul is offering them a clearly better deal (which is always hard to analyze, and I'm not saying they are since the data is not available for any of us to judge) for the public, then it would be corrupt to turn them away.

[DudeAnon]

Corruption is right around the corner when you have money or power of any sort.

It's harsh because the government cannot avoid working with private entities. Unless you go to an extreme small government model or extreme socialist government, public and private will be working together financially. It doesn't make sense to say money from private and public shouldn't mix. How do you avoid it? With something like this in DePaul, the notion of what is happening is almost ideal, the private entity which will benefit from a public project is paying a hefty share of the cost. Corruption would be DePaul paying nothing and the exact same project going in. I would argue that if DePaul is offering them a clearly better deal (which is always hard to analyze, and I'm not saying they are since the data is not available for any of us to judge) for the public, then it would be corrupt to turn them away.

Its just a personal philosophy. I have no problem with Depaul building their own stadium then renting it out to the city or vice versa, but when you have shared ownership you are opening yourself up to corruption. Like I said, I know it happens all the time so its not the end of the world, I just don't think its right.

[yorost]

Who has shared ownership? I don't think DePaul will own any share of the arena.

[Edrick]

Depaul's attendance is 30% of what they report...

http://www.chicagobusiness.com/article/ ... /130529794

This is pretty typical around the country. Universities that report heads instead of sales is more correct but they will always look like they are less attended.

[yorost]

Fantastic piece by Eamonn Brennan on the issues surrounding the arena: http://espn.go.com/blog/collegebasketba ... ascinating

Two final points stand out:

1. The Chicago plan might or might not eventually lead to a much-discussed city-owned casino being built adjacent to McCormick Place. If that happens, all budget projections for the current plan are bunk, because casino arena events (see: MMA and boxing) mean big money. But even if that doesn't happen, with a new arena near the world's largest convention center, there's no reason the city shouldn't be able to maximize the 300-some days in the calendar in which DePaul won't be playing a men's or women's home basketball game. DePaul gets to pay rent and avoid raising tuition in the trade, but this is the city's building.

2. Success is a self-fulfilling prophecy. Has DePaul won seven Big East games in five seasons because the program is destined to be bad? Or is it because DePaul played its home games in a decrepit suburban arena that, as one person close to the program told me recently, it sometimes doesn't even show to recruits? If DePaul's new home can boost recruiting to the point that even a small fraction of local talent begins to consider the Blue Demons, the Blue Demons will improve. If they improve, more people will come to games.

Using Allstate Arena ticket data to dismiss the new project is reductive.

Love his closing line...

...whatever does follow from here, DePaul, a private university, has cast its lot in with the most byzantine municipal government in recorded human history. In other words: stay tuned.