The Rolling Stones, the Bulls, and the United Center property tax deal | Bleader

Monday, January 14, 2013

The Rolling Stones, the Bulls, and the United Center property tax deal

Posted By on 01.14.13 at 06:44 AM

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When word broke that Bulls owner Jerry Reinsdorf was eligible for the basketball hall of fame, team coach Tom Thibodeau gushed praise for his boss.

"Great owner," Thibodeau told Joe Cowley of the Sun-Times. "From a leadership standpoint, he sets the tone for our franchise. He’s fair, he’s honest, and you can’t ask for anything more than that."

Well, obviously Coach Thibs is not a Chicago property tax payer. Otherwise, he might have a different view of his employer.

Thanks to a new study written by Sean Dinces, a graduate student at Brown University, and published by the Chicago Teachers Union, we now have a sense of the impact of the property tax break the state gave to Reinsdorf and Rocky Wirtz, owner of the Blackhawks, to operate the United Center.

To put it mildly, it's a nice deal for Reinsdorf and Wirtz and not so nice for ordinary taxpayers.

Here, read the study yourself.

A few basics you should know before we continue . . .

Basically, the amount you pay in property taxes is determined by the value of your property times the tax rate. The tax rate stays the same for everyone. It's the value of your property that determines how much more or less you pay each year relative to everyone else.

The more your property's value goes up, the more you pay in taxes; the more you pay in taxes the less everyone else has to pay.

In 1989, the General Assembly passed a law that essentially limited the rise in the United Center's value, thus sheltering Reinsdorf/Wirtz from dramatic property tax increases.

So how have they fared over the last couple of decades compared to ordinary property taxpayers?

Excellent question. To answer it, I've randomly selected one ordinary taxpayer who owns a humble little home near the el tracks on the north side of Chicago.

Let's just call him, oh, Ben.

In 1995, the first full year the United Center was in operation, it paid about $864,000 in property taxes on five essential parcels. I know this 'cause I talked with Dinces, who's collected volumes of information on the tax history of the United Center. What a geek! Unlike me, he obviously has no life.

In contrast, Ben paid about $2,700 that year.

Last year those same United Center parcels paid about $2,214,000.

Ben paid about $8,500.

Now bear with me as my crack team of researchers calculates the numbers to see who's had the greatest proportional increase in taxes over the last 15 or so years.

So just hold on. While we wait—can you believe the Bulls lost at home to the Bobcats and the Suns? Is it too much to ask that we make these tax breaks contingent on beating the worst teams in the league?

Oh, wait—the totals are in!

The United Center's tax bill went up 156 percent.

Ben's taxes went up 214 percent.

And by the way, I'm being fair to Reinsdorf/Wirtz because their tax bill fluctuated over the years. In 2005, for
instance, they paid $612,500 on these parcels (probably cause the NHL lockout cut into their profits). In contrast, Ben paid—actually, Ben's too depressed to talk about his property tax bills anymore.

In short, Reinsdorf/Wirtz are far more adept at playing the system than Ben, who's not very bright and easy to bamboozle, like most taxpayers in Chicago.

You might want to make the same calculations with your own tax bills. You too can be an investigative reporter and earn all the rewards that emanate from this glorious vocation.

Now, in fairness to Reinsdorf/Wirtz, $2.2 million is a lot more than $8,500. Meaning they contribute more money to the tax coffers than Ben.

So their attitude just may be: Yo, Ben—kiss our mother-bleeping . . .

Wait—that's Mayor Rahm's attitude toward Ben.

In fairness to Ben, he doesn't bring in big bucks by staging Rolling Stones concerts in his backyard. Or rap concerts, hockey games, basketball games, circuses, ice shows and so on and so forth.

So one could argue that Reinsdorf/Wirtz—not Ben—should be picking up more of the tax burden year after year. That would be what we call a more progressive system of taxation.

In fact, if I know Ben, he's probably making that argument right now. Not that it's ever done him any good.

By the way, the law that shelters Reinsdorf/Wirtz expires in 2016. In exchange for extending it, they've proposed to build a retail/entertainment center just east of the United Center.

In short, they want property tax relief in return for making even more money out of the operations.

My bet is they'll get what they want, whether Ben likes it or not.

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