Chicago's Soccer Team Is Draining Hometown FundsBy and
Bridgeview, Illinois cut to junk on pressure from soccer arena
A cautionary tale, as suburb reels under resulting debt
The Chicago Fire’s stadium is burning its suburban hometown.
Bridgeview, Illinois, which issued debt to build the Toyota Park arena where the Major League Soccer club plays, had its credit rating cut four levels Friday by S&P Global Ratings to BB-, three steps below investment grade. The company said the bonds may be cut even deeper into junk, given the town’s deteriorating finances and the costs it took on to build the stadium.
“The village will continue to face acute business, financial, and economic uncertainties related to its debt burden," said S&P analyst Blake Yocom said in a statement.
The 17,000-resident suburb 15 miles southwest of downtown Chicago is an extreme example of the risks of subsidizing professional sports stadiums, which has also proven costly to cities including Glendale, Arizona, and Indianapolis.
Bridgeview intended for the stadium to provide an economic jolt by spurring nearby redevelopment, though the hoped-for projects never materialized. But financing the construction left the city with about $245 million of general-obligation debt by the end of 2015, according to its financial statement.
S&P said the city has relied on restructuring to cover debt-service payments and minimize property-tax increases, pushing some of payments out to 2047.
The price of Bridgeview bonds fell after the downgrade, with those maturing in 2042 falling to an average of 87.6 cents on the dollar from 88.4 cents when they were last traded.