Chicago Teachers Union Charges Bulls Owner With United Center Tax Dodge

By Ted Cox on January 3, 2013 3:32pm | Updated on January 3, 2013 8:27pm

 The United Center has received millions of dollars in tax breaks. The teachers union says that taints Bull owner Jerry Reinsdorf's support for charter schools.
The United Center has received millions of dollars in tax breaks. The teachers union says that taints Bull owner Jerry Reinsdorf's support for charter schools.
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DNAinfo/Justin Breen

CHICAGO — In its latest bid to pressure supporters of charter schools, the Chicago Teachers Union has completed a study suggesting that Bulls Chairman Jerry Reinsdorf and the owners of the United Center are paying less than a quarter of the property taxes they should be paying on the arena.

The soon-to-be-released study, "Nothing but Net Profit: Jerry Reinsdorf, Property Tax Relief, and Corporate School Reform on Chicago's Near West Side," says tax breaks the United Center received from the state have saved the owners tens of millions of dollars, in exchange for Reinsdorf and Bill Wirtz, then owner of the Blackhawks, agreeing to build it on their own without public financing.

According to data CTU obtained from the Cook County Board of Review through the Freedom of Information Act, the United Center paid $8.5 million in property taxes for the six years from 2002 through 2007.

That's because the General Assembly had previously approved legislation setting the UC's assessment at 20 percent of market value — well below the 38 percent maximum rate for commercial properties at the time — and gave the UC a sweetheart deal to deduct income taxes, maintenance costs and mortgage interest from income.

Yet, the union says the taxes should have been $35.9 million for those years — or more. If the UC's tax multiplier hadn't been set at a level below what it likely would have been, the total tax cost for the six years could have been as high as $71.8 million.

The study points out the study only covers 2002 to 2007 because complete revenues were included in a 2008 assessment appeal filed by the United Center owners. The CTU has filed FOIA requests on later appeals, but CTU sources said the office of Cook County Assessor Joseph Berrios has yet to release them.

The tax deals extend back to the arena's debut in 1994 and continue to this day.

CTU suggested the $30 to $60 million in savings over six years dwarfed the $2 million Reinsdorf contributed to help launch Chicago Bulls College Prep in 2009, as well as the $8 million he contributed in the 1990s to build a Boys & Girls Club on the Near West Side and bolster Chicago Public Schools' afterschool programs.

 Chicago Bulls College Prep was launched in 2009 with the help of $2 million from Jerry Reinsdorf, according to the Chicago Teachers Union.
Chicago Bulls College Prep was launched in 2009 with the help of $2 million from Jerry Reinsdorf, according to the Chicago Teachers Union.
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DNAinfo/Justin Breen

It's Reinsdorf's support for CBCP, a Noble Network charter school, however, that drew CTU attention. CTU has attacked the CPS funding of charters, as those schools are not obliged to observe union teacher contracts, and it insists it's part of an organized effort by CPS and the Emanuel administration to privatize public education. Others have criticized fines charged to students as a disciplinary measure at the schools.

"At the same time that he makes relatively small contributions to a local charter school — one with a history of pushing out the most vulnerable students — Reinsdorf benefits from an unpublicized system of corporate welfare that shifts the burden of paying for public schools onto ordinary taxpayers and ultimately diverts resources away from the city's most vulnerable students," the study stated.

The United Center management criticized the study and said all taxes are paid in full.

"It is disappointing that any group would mislead the public by suggesting the United Center does anything other than pay all property, sales, amusement, parking and employment taxes, in full, as required by law," said a statement issued by UC management. "Since opening as a privately funded and operated arena in August 1995, the United Center has generated more than $310 million in direct tax revenues for the city, county and state.

"It is both disappointing and inaccurate to suggest that our charitable activities and longstanding support for public education in Chicago are in any way related to those taxes."

CTU has previously subjected Board of Education member Penny Pritzker and charter-schools supporter Bruce Rauner — both of whom have lent their surnames to Chicago charters — to similar attacks, and they are cited by name in the study as "high-profile union critics."

 

 

 

 

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