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Effects of the Wrigley Field Renovation on the City of Chicago

To: The U.S. Conference of Mayors

Prepared by: Febrina Boediman

Shan Du Kyle Jin

Matthew Lee Renee Verdier Won Sun You

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Executive Summary Objective: To explore the effects of the approved Wrigley Field Renovation Plan for the City of Chicago and its key constituents and stakeholders. The findings of this report will identify economic and socio-economic effects for Chicago as well as its direct effect towards hospitality and tourism. Positive Effects: The report finds a positive growth in economic impact to Chicago while considering nonconventional revenue streams through spending, job creation, and tax incentives. ● The renovation will generate $57M in annual net new direct spending ● $94M in annual new indirect and induced spending ● Restoration will create approximately 2,100 jobs (1,300 permanent/800 in direct construction) ● $232M renovation of Wrigley Field would be supported by Class-L property tax incentive Negative Effects: The amended Wrigley Field Planned Development causes negative effects on the Lake View community and its residents both financially and socially. ● The approximate total cost of 41,397 sq. ft. of Lake View land is $11M ● $3.75M that the Cubs must pledge in order to compensate for the expansion plan of the left-

field and the right-field walls is below the market value of 41,397 sq. ft. of public land that Lake View must sacrifice

● Narrowing of Sheffield Ave and Waveland Ave erodes quality of life of Lake View residents ● Increase in night games minimizes economic activities, invades residents’ quality of life and

causes traffic congestion within the community Hotel and Restaurants Development: The projected hotel and restaurants development will be a good addition to the Wrigleyville area, as the report found that there is an increase in hotel demand in this particular area. ● The demand average for hotel rooms in the Wrigleyville area has reached 112,854 per year ● The current hotel rooms supply has covered the number of average rooms demand, with a

mixed of upscale and midscale hotels in the area, which gives an opportunity for an upper-upscale hotel to be developed

● Restaurants and bars around Wrigley Field clustered along N Clark Street vary from fast food restaurants to sports themed bars

● The projected restaurant and retail space should take the current restaurants and bars supply in the area into consideration (types and price) when deciding on the space tenants

Tourism Development: The renovations are projected to increase the capacity of and visitation to Wrigley Field and Wrigleyville, creating new demand and opportunities for tourism product development. ● Wrigley Field is already Illinois’ 3rd most popular tourist attraction, drawing over 3 million

visitors per year ● In addition to being a sports attraction and the home of the Chicago Cubs, Wrigley Field is

also considered a heritage destination and social gathering place ● Renovations should take these various motivations into account and ensure the preservation of

historical artifacts as well as promote niche social events ● Wrigley Field can maximize economic benefits for community-owned businesses by giving

local vendors satellite locations within the renovated Wrigley Field stadium

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Impact Analysis

Wrigley Field, home of the Chicago Cubs, a Major League Baseball club is scheduled to undergo

a significant renovation. The 5-year project will cost a total of $500M. $200M will be devoted to

redevelopment of the Wrigleyville community and $300M will be solely devoted to the

renovation of the stadium.

Assessment of Economic and Social Effects

The goal of the economic and social assessment is to analyze additional future growth

while locating nonconventional revenue streams through spending, job creation, and tax

incentives as a result of the Wrigley Field renovation.

Investment

The renovation of Wrigley Field will lead to economic impacts determined by variables

such as growth in increase in local, county, and state revenue, tax revenue, job creation, personal

earnings and consumer spending. The forward will depict just how much of an economic impact

will the Wrigley Field renovation project will generate for Chicago and the neighboring region.

The data below supported by the Conventions, Sports, and Leisure International report highlights

the amount of new growth in terms of revenue reinvested into the economy as a result of the

renovation that otherwise would not be present.

The renovation project will generate roughly $57M in new annual direct spending.1

Direct spending consists of the revenue driven by in & out of ballpark fan spending and other

spending from premium seats, league sources, advertisers, and visiting teams. Table 1 is a

categorical breakdown of the direct spending allocation.

Table 1:

Direct Spending

1 Greenberg, Jon. "A Simple Plan? Hardley." ESPN. 17 11 2010: n. page. Print. .

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The renovation project will also generate roughly $94M in new annual indirect and

induced spending. Indirect spending consists of “supplies of goods or services as a result from

the direct spend” at Wrigley Field2. Induced spending encompasses the “change in local

consumption due to the personal spending by individuals whose incomes are affected by direct

and indirect spending.”2 Table 2 is a chart that exemplifies the categorical breakdown of direct,

indirect, and induced spending.

Table2: Direct, Indirect, Induced Spending

Job Creation

The $200M investment by the Ricketts family towards Chicago will help increase job

growth and enhance the surrounding areas. According to the Conventions, Sports, & Leisure 2 Chicagoland Chamber of Commerce. “The Restoration of Wrigley Field. 2013. PDF file.

2013 Direct Spending ($ millions)

Categories Spending

Game-day operations 118

Lodging 76

Restaurants 110

Retail Shops 48

Non-Cubs Entertainment 48

Total Direct Spending 400

Changes in Economic Impacts ($ millions)

Direct

Spending

Indirect + Induced

Spending

Total

Spending

2019 457 332 789

2013 400 238 638

Net New Spending 57 94 151

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International reporting, Wrigley Field will instantly create over 7,000 jobs. 2,100 of the total jobs

will be positions directly affiliated with the actual renovation of Wrigley Field. 800 of the jobs

will be created through construction.2

Class-L

$232M of the Wrigley Field renovation is supported by a property tax incentive titled

Class-L. Class–L encourages the rehabilitation of landmark properties such as Wrigley Field in

Chicago. As a result, taxes will be reduced on the 99year old ballpark by an estimated $8.1M

over 12 years. As of November 12th, 2013, the Finance Committee & Commission on Chicago

Landmarks approved of the Class-L incentive and the project will reach its final stage of

approval in voting by the city council.

The current property taxes on Wrigley are estimated at $1.5M a year.3 With the proposed

renovation plans, Wrigley Field will increase in stadium value. According to the Landmarks

Commission, the project will increase property tax to $4.2M at the completion of the 12 year-

incentive periods.

Community

The Chicago Cubs commitments to the community are unparalleled. The renovation

plans include a $1M new ballpark at 1230 W. School Street in Chicago. The Cubs fund will also

increase donation support of already $2M a year to children in the Lakeview community since

2000 (Greenberg).

Competitive Set

The renovation of Wrigley Field draws many parallels to the Boston Red Sox’s Fenway

Park renovation. Built two years apart from each other, Fenway in 1912 and Wrigley in 1914,

both are recognized by the Landmark Commission of Historic Preservation. Table 3 is a chart of

the direct, indirect, and induced spending that economically benefited the city of Boston.

3 Chicago Cubs. "FAQ." Restore Wrigley Field. N.p., n.d. Web.

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Table3:

Boston Red Sox as a Competitive Set

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Negative Effects

Referred to as the planned development (PD), the Wrigley Field renovation and the Lake

View redevelopment plans have gone through various amendments. The latest amendment calls

for various architectural changes to the original renovation plan, which was approved by the

Chicago City Council back in April. On December 11th, the Chicago City Council passed the

latest amendment with support from Mayor Rahm Emanuel.4 Additionally, the Lake View

community groups such as the East Lake Vie Neighbors strongly contend the Wrigley Field

renovation plan as it will negatively affect the livelihoods of many residents in the community.

Cost Overruns

Initial design of the Wrigley Field renovation located the advertisement signage and the

video board in a way that obstructed views from the rooftop clubs. However, the Cubs and the

rooftop owners have a binding contract for which the rooftop club owners pay the Cubs 17% of

their annual revenue in exchange for allowing rooftop views to be preserved.5 The original

renovation plan of the Wrigley Field violates this contract and the Cubs have been challenged

with a threat of lawsuits from the rooftop owners. Thus, the rationale for the latest amendment is

to prevent any litigation from the rooftop owners.

The amended Wrigley Field Planned Development includes expansions of the left-field

and right-field walls. Specifically, the left-field wall will be extended by 16 ft. and the right-field

wall will be extended by 7 ft. 4 Expanding the Wrigley Field footprint gives the Cubs the space

they need to erect the 650 sq. ft. advertisement signage on the right field and install the 5,700 sq.

ft. video-board on the left field further out to preserve rooftop views that otherwise would have

been obstructed. However, these architectural changes require more funding from the Cubs than

$300 million that they allotted for the original budget.

Cost overruns mean unexpected cost increase from the original budget and they are

inevitable in most stadium projects. Two most recent stadium projects in the Major League

Baseball have experienced cost overruns in their construction phase. The Minnesota Twins had

undergone cost overruns with reconstruction of their stadium, the Target Field, in 2010. The

4 Dardick, Hal and John Byrne. “City Council Approves More Wrigley Field Renovation Changes.” Chicago Tribune. 11 Dec. 2013. Web. 5 Suddath, Claire. “Wrigley Field's Planned Renovation Threatens a Chicago Rooftop Tradition.” BlommbergBusinessweek. 05 Sept. 2013. Web.

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overall cost of the reconstruction project exceeded the original budget by $37.5 million.6 In

2010, the Yankees Stadium had also experienced substantial amount of cost overruns with their

stadium construction. The initial project budget for the Yankees Stadium was set at $825.3

million but only to be exceeded by $812.6 million. 6

1) 2010 Target Field Construction

Financial Summary ($ in millions) Project Costs Minnesota Twins Construction Costs $390 On/Off Site Development Costs 90 Cost Overruns 37.4 Bond Issuance Costs 42 Total Project Costs $559.40 Source: Conventions Sports & Leisure

2) 2009 Yankees Stadium Construction Financial Summary ($ millions)

Project Costs New York Yankees

Initial Project Budget $825.30 Scope Modifications & Add'l Build Out 424.7 Security/Safety Improvements 59.8 Construction Delay from Litigation 40 Museum & Conference Center 8.4 City Parkland Replacement 194.7 State Parking Garage Construction 70 Rent Credits 15 Total Project Costs $1,637.90

Source: Conventions Sports & Leisure

Architectural changes in an effort to accommodate the rooftop club owners will lead to

increased costs of resources for modifications on the original renovation plans, workers’

compensation and destruction of public land. Even though, the renovation has not even begun,

the issue of cost overruns looms the Wrigley Field Planned Development. Based on the case

studies of above, the Cubs should expect cost overruns in other areas as well when the

renovation commences.

Funding sources for the amendment have yet to be determined. According to Chicago

Sun-Times, Mayor Emanuel has exempted the Cubs from pledging more than $4.75 million they

6 Conventions Sports &Leisure. “Economic Impact Analysis: Proposed Major League Ballpark in San Jose, CA.” 2009. PDF file.

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already have invested into the “Cubs Fund” for the use of public streets and sidewalks needed to

expand the left-field and the right-field walls since the Cubs have already agreed to provide $500

million for not only the Wrigley Field renovation but also the redevelopment project of the Lake

View community.7 Of those $.4.75 million, $1 million contribute to the School Street Play Lot so

in reality, the Cubs only have to pledge $3.75 million in excess cost.3

Quality of Life

The outfield wall expansion plan can only be accomplished with sacrifices from Lake

View residents. Specifically, the outfield wall expansion plan comes at an expense of 41,397 sq.

ft. of public land on Waveland Avenue and Sheffield Avenue.8 In order to allow enough spaces

for the Cubs to make proper expansions, Sheffield Avenue will be narrowed from 33.5 ft. to 23.5

ft. in width. Waveland Avenue will shrink from 31.5 ft. to 23 ft. A total of 56 public parking

spaces will be lost. 8 On the ballpark sides of the streets, sidewalks on Waveland will go from 16

ft. wide to 8.5 ft. wide and Sheffield sidewalks are reduced from 15 ft. wide to 10 ft. wide. 8

Accordingly, cost overruns of the amended Wrigley Field Planned Development also

account for the public land that the Lake View community is asked to sacrifice. Average price

per sq. ft. for homes in Lake View is valued at $267 in the month of December.9 Taking that

value into account, the approximate overall cost of public land that Lake View residents are

forced to give up is $11,052,999. Certainly, $3.75 million that the Cubs are required to pledge

are well below the market value of 41.397 sq. ft. of Lake View land. In effect, architectural

improvements to the initial renovation plans would put unexpected financial burdens on

taxpayers. If the Ricketts family is not required to fully compensate for public land given up by

Lake View, then, the only reasonable assumption is that the cost of those destructions would

have to be compensated by public subsidy.

In addition to public land being lost, the quality of life for many residents who live

around the Wrigley Field, some who have lived there for more than four decades, are negatively

affected as a result of the amended renovation plan. About 125 residents in homes on the 1000

block of Waveland and the 3600 block of Sheffield are directly affected.8 Due to narrowed

7 Spielman, Fran. "Cubs Won't Have to Give Taxpayers More After $4.75M for Wrigley Renovation." Chicago Sun-Times. 2 Oct. 2013. Web. 8 “East Lake View Neighbors Denounce Mayor Emanuel’s Plan to Give Cubs Public Land for Free.” East Lake View Neighbors. News Release. 21 Nov. 2013. PDF file. 9 “Lakeview Market Trends.” trulia.com. Dec. 2013. Web.

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streets and sidewalks, simple daily activities such as jogging and walking kids back home from

school will be intervened. With elimination of street parking, Lake View residents will be forced

to move further away from their homes to park their vehicles while the Cubs are allowed to build

more parking spaces for their employees and players. Additionally, the 5,700-ft. video-board

erodes the livelihood of many residents who live in apartments near the stadium. 8 Sounds and

illumination of lights coming from the video-board could be intrusive to residents who live near

the Wrigley Field.

Night Game Ordinance

The intention of the “Cubs Fund” agreed between the Cubs and Lake View was to

allocate $4.75 million to community infrastructure improvements in exchange for approving the

Night Game Ordinance, which included a dramatic increase in night games from 33 to 44, the

addition of 6 Friday games with 3:05 starts and 4 concerts. Most MLB teams play 5 to 6 games

per week during the season including 3 or 4 weekday games. 3 “For example, in 2006 the White

Sox, a typical team in MLB, played 81 home games of which only 26 were day games that start

before 3:30 in the afternoon. On the other hand, the Cubs have continued to be the last in the

MLB in the number of night games they host”.10 The Cubs only scheduled and played only 33 of

their 81 home games at night last season.

Playing night games affect residents as well as local establishments in neighboring

communities for various reasons. First, night games do not spur as much economic activities as

the day games do. Taking into account of 3-hour duration of a typical baseball game, fans tend to

leave late at night on games that start after 3:05 pm, which diminish spending in local restaurants

and bars. On the other hand, day games discharge fans in the late afternoon or early evening

leading to larger foot traffic to local bars or restaurants, thus, inducing more economic activities.

10 “Like most MLB teams, frequently attracting visitors in other local establishments very

difficult. The Cubs crowd out local business through night games only half as often as a typical

MLB team.” 10

Second, night games and concerts that come after lead to negative quality of life on the

neighborhood and its residents. 8 The Wrigley Field is unique from all other ballparks in the

10 Baade, Robert A., Mimi Nikolova, and Victor A. Matheson. “A Tale of Two Stadiums: Comparing the Economic Impact of Chicago’s Wrigley Field and U.S. Cellular Field.” International Association of Sports Economists. Working Paper Series, Paper No. 06-14. 2006. PDF file.

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MLB in that it is located at the heart of downtown Chicago. Noises, lights and behaviors of fans

directly affect the neighborhood. With fans occupying the streets of Sheffield and Waveland,

carrying out normal daily activities such as walking kids back home from school, walking dogs

or running errands could all become more difficult than they have to be.

Finally, playing games at night causes traffic congestion in the community. 8 The motive

for doing stadium renovations and neighborhood redevelopment project is to attract higher

volume of tourists. Thus, the Lake View community can expect increase in foot traffic,

especially on game days, when the Wrigley Field planned development is complete. To make

matters worse for local residents, night games bring higher attendance than day games do. Even

after considering three-hour duration of a typical baseball game, day games still end before rush

hour and most fans leave the town by the time local residents come back from work. On the

other hand, night games end after rush hour, thus, causing traffic in the neighborhood.

Since there is no overlap in time between the day game and rush hour, fans can afford to

park on the streets and in personal garages10 without invading parking spaces designated for local

residents. Fans’ cars merely substitute the number of vehicles that would have been parked by

local residents on the streets. However, during night games, local residents have to deal with a

possibility of sharing their own parking spaces with visiting fans since night games end after

rush hour. Furthermore, the expansion of the outfield walls limit local residential parking spaces

and diminish local streets that surround the Wrigley Field in the first place. The obvious reason

as to why the Cubs sought out more night games and the city approved the ordinance is because

night games bring higher revenue than day games do for a ball club on average. While hosting

more night games brings economic benefits to the Chicago Cubs, it has detrimental effect on the

quality of life of the Lake View community.

Relationship Between the City and the Community

The consensus among Lake View residents on the Wrigley Field planned development

with the newest amendment is clear; the community is opposed to many aspects of the planned

development. The East Lake View Neighbors, a representative group of the Lake View

community, has sent numerous letters to the Cubs and mayor Emanuel expressing their concerns

on the negative effect that the planned development would have on the community. On July 10th,

another group called the Lake View Citizen’s Council organized a “Rally to Save Wrigleyville”

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to protest the original planned development.11 Despite these efforts, the community’s voices “are

falling at deaf ears” 11 as evidenced by the ease at which the planned development and the

amendments have been approved by the Chicago Plan Commission, the Commission on Chicago

Landmarks and the Chicago City Council.

The time span between the introduction of the proposal and the hearing simply has been

too short to provide the Lake View community enough time to assess how the proposal or

amendments to thereof affect the community. For example, the Cubs proposed the newest

amendment for the Wrigley Field planned development on October 16th 12 and only about 5

weeks have passed when the proposed amendment went before the Chicago Plan Commission

and subsequently approved on November 21st.13 Since then, it took less than three weeks for the

city council to finally pass the proposed amendment on December 11th. 4This gives an unfair

advantage to the city in meetings since it does not give proper amount of time for the Lake View

community to develop an effective defense.

Another factor that contributes to the community’s voice being ignored by the city is the

strong support of Mayor Emanuel on the Wrigley Field renovation plan. Mayor Emanuel has a

reputation for his authoritative style of leadership.14 Since he has assumed the mayoral position,

“Emanuel has openly advocated for his city’s respective cultural assets and tourist appeal, as

well as for the vast economic potential.” 14 Mayor Emanuel’s authoritative leadership style in

conjunction with his strong support of the renovation plan has had influence on the outcomes in

plan commission, landmarks commission and city council meetings regarding the Wrigley Field

Planned Development. The approved amendment, which allows the Cubs to pledge no more than

$3.75 million to compensate the public land being given up for the expansion of outfield walls,

solidifies his strong support for the planned development. Therefore, regardless of the outcry

from the Lake View community, the approval by the Chicago City Council seems to indicate that

the Wrigley Field renovation plan will occur.

11Ambrosius, Andy. "Wrigley Rally: 'Residents Are Not Being Listened To'" Lake View Patch. N.p., 17 July 2013. Web. 12 Dec. 2013. 12 Byrne, John. “Advertising Arch Across Clark Part of Wrigley Renovation.” Chicago Tribune. 22 Nov. 2013. Web. 13 “Drastic Changes to Sheffield Avenue to Come Before City Plan Commission on Thursday, November 21.” 14 Prechtel, Jason. "Bloomberg Already Has a Mayoral Successor: Rahm Emanuel." Gapers Block. 13 Sept. 2013. Web.

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Wrigley Field Hotel & Restaurants Development Description of the Hotel Project

The site

The hotel located in the intersection of N Clark Street and Addison Street. Walking

distance to the numerous theaters, shops, restaurants, and bars in

the Lakeview community, the hotel will be just 15 minutes from

the Magnificent Mile. The hotel will provide fans and visitors with

accommodation on the North side outside of Cubs baseball

games.15

The site is under city zoning plan with code PD-

958(Planned Development Area), together with Wrigley Field

Renovation, Ball Park Renovation and surrounding area renew

plan.

The Cubs have already agreed to eliminate the pedestrian

bridge over Clark Street connecting the park and hotel. Additionally, it has been proposed that

the hotel's entrance be moved from Patterson Avenue to Clark Street, with the hotel balcony at

Clark and Patterson getting nixed.16

Local Access and Visibility

The CTA Red Line provides direct service to Wrigley Field

via the accessible station at Addison. Fans can transfer to Red Line

trains from all other rail lines and from most east west bus routes.17

The Cubs also operate a shuttle and parking service at the

DeVry University campus located off Addison Street and Western

Avenue for all weekend and night games. The first shuttle leaves

two and one half hour prior to the game. The shuttle runs for one

hour after all Night Games and for two hours after all Weekend Day

Games. Fans in the northwest and west suburbs can take Pace's

15 Carrie Bloom. “Starwood Hotels Announces Exclusive Partnership to Become "Official Hotel of the Chicago Cubs", Starwood Hotels and Resorts. <http://development.starwoodhotels.com/news> (17 January 2013) 16Carrie Muskat. “New Proposals in the works for Wrigley renovations”, MLB.com <http://mlb.mlb.com/news/article> (16 October 2013).17 “Public Transportation,” MLB.com, <http://chicago.cubs.mlb.com>.

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Wrigley Field Express Route non-stop to Wrigley Field. The routes operate during all evening,

weekend and holiday games, as well as to every game in June, July and August. Parking

The parking lot is located on West Grace Street between North Clifton and North

Seminary Avenues. Parking at this lot is available to fans who have purchased a parking pass.

Street parking in the neighborhoods surrounding Wrigley Field is extremely limited and highly

restricted. The blocks closest to the stadium do not allow parking for any amount of time without

a residential parking permit, which are available only to neighborhood residents and guests of

residents. However, a limited number of blocks within walking distance of the stadium might

allow parking without a permit during day games. A number of independently owned and

operated parking lots offer parking in the neighborhood surrounding Wrigley Field on game

days. Price and availability in these private lots can vary greatly from game to game. Online

service like Park for Wrigley offer fans the opportunity to reserve a spot in a privately-owned

parking lot by paying online.

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Market Area Analysis

HistoricalSupplyandDemandTrend(STR)

Year OccupiedRmNgts Change

AvailableRm

Ngts Change Occ(%) Change AvailableRate Change RevPAR Change

2007 111681

152570

73.2

149.47

109.41

2008 106525 -4.6% 152570 0.0% 69.8 -4.6% 147.78 -1.1% 103.18 -5.7%

2009 103029 -3.3% 156242 2.4% 65.9 -5.6% 125.59 -15.0% 82.82 -19.7%

2010 112541 9.2% 161330 3.3% 69.8 5.8% 128.70 2.5% 89.78 8.4%

2011 119485 6.2% 161330 0.0% 74.1 6.2% 134.60 4.6% 99.69 11.0%

2012 123864 3.7% 161330 0.0% 76.8 3.7% 139.90 3.9% 107.41 7.7%

2013 123095 -0.6% 161330 0.0% 76.3 -0.6% 147.03 5.1% 112.18 4.4%

Average 114317 1.8% 157562 0.9% 72.3 0.8% 139.01 0.0% 100.64 1.0%

CompoundedChange 1.6%

0.9%

0.7%

-0.3%

0.4%

HotelIncludedinSample NoofRmsAffDate OpenDate Class

DaysInnChicago

133 32143 32143 EconomyClass

Inn@LincolnPark

74 37773 30407 UpperMidscaleClass

WillowsHotel

55 10380 10380 UpscaleClass

HotelMajestic

52 34851 34851 UpperUpscaleClass

BestWesternPlusHawthorneTerraceHotel 83 40483 9649 UpperMidscaleClass

CitySuitesHotelChicago 45 9649 9649 UpscaleClass

Total 442

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Chicago Hotel Performance18

Below is the data from “STR report for August 2013” that concludes the hotel performance in

the greater Chicago area. This data helps to recognize the type of market coming into the city and

how much each segment contributes to the Chicago hotel occupancy, revenue per available

room, and average daily rate.

• The overall occupancy number for luxury hotels in the United States has been increased

2.4% from the year 2012, which makes luxury hotels to have the highest percentage of

occupancy from transient and group customer.

• Chicago is placed as number 7 (80%) on the top 25 market occupancy in the United

States

o Transient 48.9%

o Group 28.8%

o Contract 2.3%

• In regards to Average Daily Rate (ADR), it has been placed as number 4, with the

average of 168.55

o Transient 176.66

o Group 161.68

o Contract 81.60

• Number 9 for the Revenue Per Available Room (RevPar), with the total of 134.84

o Transient 83.34

o Group 46.64

o Contract 1.86

18 STR Monthly Segmentation Hotel Review: U.S. Hotel Industry Performance for the Month of August 2013. Rep. Hendersonville: Smith Travel Research, 2013. Web. 17 Sept. 2013.

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Competition

The map of hotel competitors’ location

A. City Suites� B. Best Western Plus Hawthorne Terrace C. Majestic Hotel� D. Days Inn Chicago� E. The Willows Hotel Chicago� F. Inn at Lincoln Park

With regards to competition, there are six hotels located within short distance from

Wrigley Fields. These hotels are being considered as possible competitors to the projected hotel.

The 6 hotels around Wrigley Field’s provide 161,330 room nights per year. These hotels

accommodate the demand average of 112,854 room nights per year. Since 2007, demand for

these hotels has been increasing; it reached to the highest number of 123,864 room nights in

2012. Based on the STR reports, the hotels’ occupancy starts to escalate on April, which coincide

with the beginning of baseball season.19

19 STR: Chicago, IL Selected Properties. Rep. Hendersonville: Smith Travel Research, 2013. Web. 17 Sept. 2013.

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Factor Sheet of Major Competitors

Hotel City Suites20

Best Western21

Majestic Hotel 22

Days Inn Chicago23

The Willows Hotel24

Inn at Lincoln Park

25 No. of Rooms 45 Rooms 59 Rooms 52 Rooms 133 Rooms 55 Rooms 74 Rooms

Hotel Class Upscale Upper Midscale

Upper Upscale Economy Upscale Upper

Midscale Distance from

WF 0.6 miles 0.7 miles 0.7 miles 1.2 miles 1.2 miles 1.4 miles

Rate 189 163 189 147 161 91

Launch Year Jun-1926 Jun-1926 Jun-1995 Jan-1988 Jun-1928 Apr-1983

Restaurant No No No No No No Meeting Space Yes Yes Yes Yes No Yes

Fitness Center Outside Hotel,

3,500 SF

On-Site Fitness

Outside Hotel, 40,000 SF

On-Site Fitness Outside Hotel Outside

Hotel

The factor sheet of proposed Sheraton Hotel’s major competitors above shows details about each hotel’s amenities, location,

service level, start year, etc. The following rate-experience matrix will assess all the major competitors based on the information in the

fact sheet.

20 "Chicago City Suites." Hotel Amenities. N.p.. Web. 13 Dec 2013. <http://www.chicagocitysuites.com/amenities>. 21 "Wrigley Field Amenities." Best Western plus Hawthorne Terrace Chicag. N.p.. Web. 13 Dec 2013. <http://www.hawthorneterrace.com/wrigley-field-hotel.asp&xgt>. 22 "Majestic Hotel Amenities." Majestic Hotel Chicago. N.p.. Web. 13 Dec 2013. <http://www.majestic-chicago.com/luxury-hotel-in-chicago>. 23 "Days Inn Hotel Chicago." Service and Amenities. N.p.. Web. 13 Dec 2013. <http://www.daysinnchicago.net/services.asp&xgt>. 24 "Willows Hotel Chicago." Amenities at the Willows Hotel. N.p.. Web. 13 Dec 2013. <http://www.willowshotelchicago.com/amenities>. 25 "Inn at Lincoln Park." Hotel Amenities. N.p.. Web. 13 Dec 2013. <http://www.innlp.com/wp/?page_id=264>.

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Rate – Experience Matrix

*Eachcompetitorshouldbecomparedagainstthebenchmark(your)property.*Ifyoudeterminethecompetitorisofthesamequality,gradewitha0.

*Ifthecompetitorranksbetterorworse,theyshouldbegradedwitha+3,+2,+1,-1,-2,-3accordingly.

The Rate-Experience matrix above is based on each hotel’s advantages and disadvantages. All the strengths and weaknesses are

transformed into numerical grades. Majestic Hotel is chosen as the subject hotel, and all its grades are set as “0”. Other hotels are

measured based on Majestic Hotel’s features. For example, City Suites is an upscale hotel inferior to Majestic hotel, which is Upper

Upscale, so we input “-1” accordingly in its corresponding “service level” grid, and so forth. The rate of each hotel is measured based

on the Majestic Hotel’s rate. All the rates are measured by the metric of percentage. For example, Best Western has a lower rate than

that of Majestic Hotel, so the percentage difference is -14%.

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Rate-Experience Graph

The rate and experience graph shown above is created by using the results of the rate – experience matrix. From the graph, it is

clear that each hotel seems to be normal competition for Majestic Hotel. The projected Sheraton Hotel now faces two options in order

to gain the market share. First, the projected Sheraton Hotel has to set a higher price and to offer a premium experience than the

Majestic hotel. Second, the projected Sheraton is recommended to offer a better experience value and to set a lower price than

Majestic Hotel. However, for the second option, we doubt if the relatively lower room rate of our projected Sheraton Hotel will hinder

the hotel’s profitability. All in all, we recommend that the new Sheraton Hotel should give better amenities and services than its

potential competitor, Majestic Hotel. Moreover, the room rate for the projected Sheraton is recommended to be set slightly higher than

Majestic Hotel at its first year after opening.

21

Demand Generator

26

The projected Sheraton Hotel will benefit from the healthy Chicago economy, which is well diversified among industries such

as manufacturing, printing and publishing, finance and insurance, and food processing. With its central geographic location and inland

port facilities, Chicago is also a national transportation and distribution center and a popular place for large group meetings, the later

due in some part to Chicago’s McCormick Place, a 2.6 million square foot convention center, which is the nation’s largest. Furthering

the appeal of Chicago as a meeting place is its accessibility by air. Chicago is served by two major airports, which are O’Hare

International and Midway. Both airports are served by Chicago Transit Authority metro stations, which allow for inexpensive, fast and

easy access to the entire Chicago metro area.

Hotel demand generators for the Chicago market are related predominantly to the meeting and group segment, which includes

seminars, conventions, and trade associations shows as well as numerous meeting groups such as corporate groups, associations and

SMERFE (social, military, ethnic, religious, fraternal, and educational groups). Moreover, another major generator will be the Wrigley

field stadium in which the Chicago Cubs play games since April every year. Chicago’s peak convention demand typically occurs in

the spring and fall.

26Celeste P., Stinson. "Hilton Chicago." MORNINGSTAR. (2013): n. page. Print.

!!!!!!!!!!!!!!!!!!!!!!!!!Local!Demand!Generator

Demand'Generator

Approximte'Mileage'From'Subject'Hotel

Approximate'Driving'time'From'Subject'

Chicago's!McCormick!Place! 8!mi 15minsLincoln!Park!Zoo 4.1!mi 11minsWrigley!Field 1!Block 1minO'Hare!International 22.8!mi 30minsMidway!Airport 18.2!mi 30mins

22

Supply Changes Supply Changes

Hotels in pipeline27

Market segmentation

Market Wide Market Segment Accommodated Demand Percentage of Total Commercial 610,566 20% Meeting and Group 1,692,762 56% Leisure 704,040 23% Total 3,007,367 100%

27 “Proposed Hotel – Chicago Area,” TR Mandigo & Company, <http://www.trmandigo.com/proposed.html#content>.

23

Food & Beverage Analysis

Restaurant near Wrigley Field mainly clustered along N Clark Street. Fast food are

welcomed in this area since people come here mostly for the game. Fans like grab-and-go.

Among 45 restaurants we looked into around Wrigley Field area, five American Restaurant, ten

Bar & Grill, eleven fast food (including fast food, takeout, hotdog, pizza and sandwich shop),

three Mexican food restaurants, one Chinese restaurant and one Thai restaurant. Some don’t have

exactly target, are not counted into types.

Restaurants around Wrigley Field

No Name Address Spend Theme 1 Uncommon Ground 3800 N Clark St $$ American Restaurant 2 Subway 3776 N Clark St $$ Sandwich Shop 3 Wrigleyville Dogs 3737 N Clark St $ Hot Dog Restaurant 4 FULL Shilling Public House 3724 N Clark St $ Irish Pub 5 Azteca De Oro Mexican Grill 3731 N Clark St $ Mexican Restaurant 6 Big G's Pizza 3716 N Clark St $ Pizza Restaurant 7 Raw Bar & Grill 3720 N Clark St $$ Bar & Grill 8 Yak-Zies 3710 N Clark St $ Bar & Grill 9 Rockit Burger Bar 3700 N Clark St $$ Bar & Grill

10 Bernies Chicago 3664 N Clark St $ Bar & Grill 11 McDonald's 3620 N Clark St $ Fast Food Restaurant 12 United Club 1060 W Addison St 13 Taco Bell 1111 West Addison $ Fast Food Restaurant 14 Vines On Clark 3554 N Clark St $$ 15 Salt & Pepper Diner 3537 N Clark St $ Diner 16 Goose Island Wrigleyville 3535 N Clark St $$ American Restaurant 17 Mullen's On Clark 3527 N Clark St $ Bar & Grill 18 Flaco's Tacos 3530 N Clark St Mexican Restaurant 19 Wrigley Side 3527 N Clark St Bar & Grill 20 John Barleycorn 3524 N Clark St $$ American Restaurant 21 Moe's Cantina 3518 N Clark St $$ 22 Merkle's Bar & Grill 3516 N Clark St $ Bar & Grill 23 Curse 3517 N Clark St $ 24 Pauly's Pizza Ria Wrigleyville 3515 N Clark St $$ Pizza Restaurant 25 The Irish Oak 3511 N Clark St $$ Irish Pub 26 Chens 3506 N Clark St $$ Chinese Restaurant 27 Old Crow Smokehouse 3506 N Clark St 28 Deuce's & The Diamond Club 3505 N Clark St $$ American Restaurant 29 The Stretch 3485 N Clark St $$ Bar & Grill 30 Sweet Baby Ray's 3478 N Clark St BBQ Restaurant 31 The Bar Celona 3474 N Clark St $$ Bar & Grill 32 Lucky's Sandwich Co. 3472 N Clark St $ Sandwich Shop 33 Rockwood Place 3466 N Clark St $$ Nightlife 34 Rebel Bar & Grill 3462 N Clark St $ Bar & Grill 35 Dimo's Pizza 3463 N Clark St $ Pizza Restaurant

24

36 Marko's Tacos 946 W Newport Ave $ Latin American Restaurant 37 Rice'N Bread 3435 N Sheffield Ave $ Hamburger Restaurant 38 The National 3441 N Sheffield Ave American Restaurant 39 Einstein Bros Bagels 3455 N Clark St $ Bagel Shop 40 Cozy Noodle n' Rice 3456 N Sheffield Ave $ Thai Restaurant 41 Subway 953 W Addison St $ Sandwich Shop 42 Sports Corner Bar & Grill 956 W Addison St $ Bar & Grill 43 Bacci Pizzeria 950 W Addison St $ Takeout Restaurant 44 El Burrito Mexicano 936 W Addison St $$ Mexican Restaurant 45 Captain Morgan Club 1060 W Addison St $ Event Venue

Bars around Wrigley Field

No Name Address Spend Theme 1 The Cubby Bear 1059 W Addison St $$ Sports Bar 2 The I.O. Theater 3541 N Clark St $$ Bar 3 Red Ivy 3525 N Clark St $$ Sports Bar 4 Smart Bar 3730 N Clark St $$ 5 The Gingerman Tavern 3740 N Clark St $$ 6 Trace 3714 N Clark St 7 Casey Morans 3660 N Clark St $$ 8 Sluggers 3540 N Clark St $$ Sports Bar 9 Chicago's Blarney Stone 3424 N Sheffield Ave

10 Underground Lounge 952 W Newport Ave 11 Nisei Lounge Ltd 3439 N Sheffield Ave Sports Bar 12 Dark Horse Tap & Grill 3443 N Sheffield Ave $ Sports Bar 13 O'Malley's Liquor Kitchen 3551 N Sheffield Ave $$ Sports Bar 14 The Dugout Sports Bar and Grill 950 W Addison St Sports Bar 15 Murphy's Bleachers 3655 N Sheffield Ave $$ Sports Bar

List above showed surrounding bars. There are total 25 bars around, if we add Bars with

Grills listed out in restaurant chart. We can easily spot that most bars are of sports theme. Both

restaurant and bars in Wrigley field area are under $$. When we decide F&B for proposed

Sheraton hotel, existing competitors pricing level should be taken into account.

Development Plan

We recommend hotel property save the first floor for leasing except for entrance and

lobby. Since fast food are welcomed in stadium area, hotel could contract with qualified brand

restaurants like McDonald, Subway, coffee shop like Starbucks. Owner will have stable lease

income from leasing. In addition, contracts can include incentive terms. For instance, if revenue

exceeded certain amount, owner will have the right to take 10% profit so on. Lounge & Bar is

suggested to be managed under management contract same as hotel rooms. Management sales

25

could also use it as events area. First floor leasing spaces include one or two retail shops. Fans

could get logo T-shirts and other souvenirs.Facilities Summary

Guestrooms No of Rooms Configuration No of Rooms

King 60 Handicapped Accessible 10

Double/Double 80

Suite 42

Total Guestrooms 18228

Food and Beverage Management Location/Floor Theme

American Gourmet Lease 1 Fast food

Lounge & Bar Mgmt Contract 1 Sports

Meeting and Banquet Space Size(sf) Location/Floor

Total Meeting Space 2800 TBA

Pre-function 700 TBA

Total Function Space 3500

Health Club Size(sf) Location/Floor

1000 TBA

Retail Size(sf) Location/Floor

500 1

Parking Size(sf) Location/Floor

2000 B1

Service and Amenities

Valet Parking

Ice/Vending

High-Speed Internet Access

28 Serena Dai and Ted Cox. “Wrigley Field’s $ 500 Million Renovation Approved by City Council”, DNAinfo Chicago, <http://www.dnainfo.com/chicago>. (24 Jul4 2013).

26

Sales and Marketing Recommendations

1. Hotel and Restaurant packages

In order to enhance the number of tourists coming into the city, especially to the

“Wrigleyville”, some packages could be offered. Some examples for the packages would be:

• Packages During the Football season

o A package that combines the Cubs ticket with hotel stays

o A package that combines the Cubs ticket with restaurants gift card/coupon

o VIP seating and hotel stays with special early booking rates

• Packages during low season (to pick up occupancy)

Depending on seasonality and the market performance, each package would be

appropriately offered in different period of the year.

2. Partnerships with Choose Chicago to promote the new development, as it is the official

destination marketing organization for Chicago.

3. The new developed hotel and restaurants should create more events that involve the

WrigleyVille community for public relation purposes.

Hotel and Restaurant’s Conclusion

o The hotel demand in this particular area is increasing from year to year and by having a

Sheraton hotel with approximately 182 rooms, it will give additional lodging choices for

the people who are traveling to WrigleyVille for any purposes.

o Although the hotel supply in WrigleyVille area has already covered the average demand,

there is still opportunity for the projected hotel to gain market share by offering better

value compared to its competitors. With the fresh and new concept and design, it would

help the hotel to compete with the other six major competitor hotels in the area.

o The restaurant and retail space should take the current restaurant supply in the area into

consideration (types and price) when deciding on the space tenants.

27

Tourism Development Chicago Tourism Overview

Both Chicago and Illinois had record-setting visitor numbers in 2012. Chicago saw

46,370,000 domestic and international arrivals, a 6% increase from 2011. Illinois also hosted

over 100 million visitors for the first time ever in 2012.29 This translates into a tangible

opportunity for Wrigley Field to capitalize on the city’s momentum and reach out to new visitor

markets.

Chicago is currently the 10th most visited city in the United States, outdone only by other

Major destinations like New York City, Miami, Orlando, and Las Vegas. Its tourism industry has

a significant economic impact, accounting for $12 billion in direct spending, $725 million in tax

revenues, and 128,000 jobs. Projected increases in visitor numbers have the potential to increase

spending to $15 billion, increase tax revenues to between $1.2 and $1.3 billion, and

create 27,000-30,000 new jobs.30

As illustrated in the chart below, visitor arrivals (both domestic and international),

expenditures, employment and tax revenue (from the tourism industry) have been on the rise

since 2009, corresponding with greater post-recession recovery trends in other US markets.

Though Chicago has suffered an image issue over the past few years due to increased crime rates

and negative media exposure, it does not appear to have significantly impacted Chicago’s appeal

or arrival trends.

29 Bellware, Kim. "Chicago Tourism Numbers: Both City And State Tallied Record Number Of Visitors Last Year." Huffington Post. 06 Sep 2013: Web. 13 Dec. 2013. <http://www.huffingtonpost.com/2013/09/06/chicago-tourism-numbers_n_3880514.html>. 30 Rauner, Bruce, and Don Welsh. "Choose Chicago Annual Report 2012." ChooseChicago.com. ChooseChicago, 2012: Web. 13 Dec 2013. <http://www.choosechicago.com/includes/content/docs/media/ChooseChicago_AnnualReport_2012.pdf>.

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Chicago Travel & Tourism Statistics 2006-201231 2006 2007 2008 2009 2010 2011 2012

Visitation (Millions) Total 45.23 46.29 45.57 39.57 39.25 43.59 46.37

% Change 9.6% 2.3% -1.5% -13.2% -0.8% 11.1% 6.4% Total Domestic 44.17 45.14 44.21 38.45 38.11 42.39 45.00

% Change 9.9% 2.2% -2.1% -13.0% -0.9% 11.2% 6.2% Total Overseas* 1.062 1.147 1.368 1.117 1.134 1.199 1.369

% Change -2.0% 8.0% 19.3% -18.3% 1.5% 5.7% 14.2% Domestic Business 11.32 12.31 11.70 9.60 10.07 10.58 10.92

% Change 0.7% 8.7% -4.9% -18.0% 4.9% 5.1% 3.3% Domestic Leisure 32.85 32.84 32.41 28.86 28.03 31.81 34.07

% Change 13.5% 0.0% -1.3% -11.0% -2.9% 13.5% 7.1%

Direct Travel Impact (Millions) Expenditures $10,910.8 $11,524.4 $11,826.0 $10,445.2 $11,097.8 $11,963.3 $12,762.5

% Change 9.3% 5.6% 2.6% -11.7% 6.2% 7.8% 6.7% Domestic $9,743.5 $10,148.1 $10,229.3 $9,167.0 $9,749.7 $10,453.5 $11,034.1

% Change 10.2% 4.2% 0.8% -10.4% 6.4% 7.2% 5.6% International $1,167.3 $1,376.3 $1,596.7 $1,278.2 $1,348.1 $1,509.8 $1,728.4

% Change 2.1% 17.9% 16.0% -19.9% 5.5% 12.0% 14.5% Employment (000) 129.7 132.3 131.9 124.6 124.4 128.3 132.4

% Change 0.7% 2.0% -0.3% -5.5% -0.2% 3.1% 3.2% Payroll $4,003.5 $4,083.5 $4,063.2 $3,794.5 $3,889.4 $4,180.5 $4,436.4

% Change 5.3% 2.0% -0.5% -6.6% 2.5% 7.5% 6.1% Total Tax Revenue $616.6 $648.5 $656.4 $586.9 $616.1 $725.7 $805.6

% Change 10.2% 5.2% 1.2% -10.6% 5.0% 17.8% 11.0% Domestic $550.6 $574.5 $574.4 $518.3 $546.1 $636.5 $699.3

% Change 11.1% 4.3% 0.0% -9.8% 5.4% 16.6% 9.9% International $66.0 $74.0 $82.0 $68.6 $70.0 $89.2 $106.3

% Change 3.0% 12.1% 10.8% -16.3% 2.0% 27.4% 19.2%

Wrigley Field Tourism

Wrigley Field and the Chicago Cubs are major players in Chicago’s tourism industry.

Chicago is the 3rd largest professional sports market in the USA,32 and the Chicago Cubs

regularly attract more fans than any other Chicago sports team.33 Wrigley Field itself is the 3rd

31 ChooseChicago. "Choose Chicago Market Analytics: Chicago Tourism Profile." 2012 Chicago Visitation Report. ChooseChicago, n.d. Web. 13 Dec 2013. <http://www.choosechicago.com/includes/content/docs/MEDIA/2012ChicagoVisitationReport.pdf>. 32 Bristow, Dennis, Kenneth Schneider, and Richard Sebastian. "Thirty Games Out and Sold Out For Months! An Empirical Examination of Fan Loyalty to Two Major League Baseball Teams." Journal of Management Research. 2.1 (2010): E2. Print. 33 Roper, Jerry. "Chicagoland Chamber of Commerce."Chicagoland Chamber of Commerce: Letter to Alderman Tunney . Chicagoland Chamber of Commerce, 15 May 2013. Web. 13 Dec 2013. <http://www.wrigleyfield.com/support/widespread-support/document/chamber-commerce.pdf>.

29

most popular tourist attraction in Illinois, and has drawn over 3 million fans per year for the past

nine straight seasons; in 2012, the Cubs drew an average crowd of 36,826 fans per game – nearly

90% of Wrigley Field’s current capacity - placing them 10th in attendance in MLB.34

In addition to being a fully-functional sports stadium, Wrigley Field is also a heritage

attraction. Built in 1914, Wrigley Field is the second oldest venue in Major League Baseball,

and the Cubs have represented Chicago since 1870 - longer than any sports team has represented

any city.35

Unlike most professional sports teams, the Chicago Cub’s competitiveness/success rate

does not significantly affect fan loyalty or visitation to Wrigley Field. This makes Chicago

Cubs/Wrigley Field unique amongst MLB teams/stadiums, as many studies have established a

positive correlation between winning records and attendance levels. Indeed, though the White

Sox consistently outperform the Chicago Cubs, they struggle to draw a fraction of the attendees

that visit Wrigley Field each year.36 This phenomenon may be attributed to the added historical

appeal of the stadium, and indicates that Wrigley Field visitors may possess a different set of

motivations than the average MLB attendee.

Wrigleyville

“Wrigleyville” is the neighborhood surrounding Wrigley Field on the north side of

Chicago, located within the greater Lakeview area. It is bordered by Halsted St. on the east,

Ashland Ave. on the west, Roscoe St. on the south and Byron St. on the north.

Wrigley Field’s location in - and integration with - the heart of the neighborhood

amplifies its impact on the local economy. Its proximity to a bustling restaurant and

entertainment district means that the majority of fans’ spending happens at local businesses

rather than at the stadium, where most profits go to the team/owners. According to the

34 Strauss, Ben. "Compared With Cubs, White Sox Can’t Win for Winning." New York Times. 26 Aug 2012: D2. Web. 13 Dec. 2013. <http://www.nytimes.com/2012/08/27/sports/baseball/white-sox-though-winning-cant-outdraw-cubs-in-chicago.html?_r=2&>. 35 Bristow, Dennis, Kenneth Schneider, and Richard Sebastian. "Thirty Games Out and Sold Out For Months! An Empirical Examination of Fan Loyalty to Two Major League Baseball Teams." Journal of Management Research. 2.1 (2010): E2. Print. 36 Gregory, Ted. "Hot Chicago White Sox get Cold Shoulder." Chicago Tribune. 03 Sep 2012: n. page. Web. 13 Dec. 2013. <http://articles.chicagotribune.com/2012-09-03/news/ct-met-sox-fans-20120903_1_cubs-attendance-sox-attendance-sox-fans>.

30

Chicagoland Chamber of Commerce, local businesses “report sizable increases in revenue and

jobs when the team is in town.”37

According to the Chicagoland Chamber of Commerce, the tourism industry has a

significant economic impact on Wrigleyville; in 2012, annual tourism receipts included $76

million in lodging, $110 million in food & beverage, $48 million in retail, and $48 million in

non-Cubs entertainment. Moreoever, a 2011 study by Conventions, Sports & Leisuire

International found that the Cubs/Wrigley Field and their visitors account for $638 million in

annual local revenue, 7,000 jobs, $282 million in annual lodging, restaurant, retail and

entertainment revenue, $244 million in annual personal earnings, and $81 million in annual tax

collections.38

According to Michael Mini, Vice President of Public Policy at the Chicagoland Chamber of

Commerce, the Wrigley Field renovations and proposed developments will maintain existing

economic impacts on Wrigleyville in addition to delivering $94 million in additional spending,

$19 million in new tax revenue, and 2,000+ new jobs (including 800+ construction jobs and

300+ permanent jobs.39

A 2012 Chicago Tribune article illustrates Wrigleyville’s dynamic appeal:

“Wrigleyville is upscale, dynamic and mostly young, teeming with clubs and restaurants steps

from the ballpark, one of the state's most popular tourist attractions… "No. 1, there's a lot more

to do’ in Wrigleyville, said Josh Ganal, owner of Grandstand. ‘It's not just, ‘”Come to the

game.”’ He added that the area around the Cell is "loaded with places to go," but they're little

more tucked away. ‘Here, you've got to do a little more looking," said Ganal, a Sox fan, ‘but I

feel our places are a lot better.’” 40

37 Roper, Jerry. "Chicagoland Chamber of Commerce."Chicagoland Chamber of Commerce: Letter to Alderman Tunney . Chicagoland Chamber of Commerce, 15 May 2013. Web. 13 Dec 2013. <http://www.wrigleyfield.com/support/widespread-support/document/chamber-commerce.pdf>. 38 Mini, Michael. "Chicago Plan Commission: Wrigley Field Expansion and Rehabilitation." Chicagoland Chamber of Commerce. Chicagoland Chamber of Commerce, 18 Jul 2013. Web. 13 Dec 2013. <http://www.chicagolandchamber.org/wdk_cc/wcm/resources/documents/adobe_pdf/news/2013_news/9841_2211410_01632/wrigley_field_expansion_and_rehabilitation_testimony.pdf>. 39 Mini, Michael. "Chicago Plan Commission: Wrigley Field Expansion and Rehabilitation." Chicagoland Chamber of Commerce. Chicagoland Chamber of Commerce, 18 Jul 2013. Web. 13 Dec 2013. <http://www.chicagolandchamber.org/wdk_cc/wcm/resources/documents/adobe_pdf/news/2013_news/9841_2211410_01632/wrigley_field_expansion_and_rehabilitation_testimony.pdf>. 40 Gregory, Ted. "Hot Chicago White Sox get Cold Shoulder." Chicago Tribune. 03 Sep 2012: n. page. Web. 13 Dec. 2013. <http://articles.chicagotribune.com/2012-09-03/news/ct-met-sox-fans-20120903_1_cubs-attendance-sox-attendance-sox-fans>.

31

The vast majority of visitors to Wrigley Field also visit Wrigleyville, whether to enjoy a

meal, drinks and entertainment in addition to the game, to shop for Cubs merchandise from the

countless sports vendors, or simply to park near the stadium. Much of the neighborhood’s

businesses cater to the stadium crowd; there are several sports-themed food & beverage

establishments (including Sluggers, Murphy's Bleachers, Casey Moran's, Rockwood Place, and

Sports Corner), the majority of the retail is Cubs-centered, and there are even a few lodging

options for fans to stay the night after the game. Wrigleyville is also home to a bevy of bars and

restaurants - frequented by locals as well as Cubs fans – as well as a handful of popular music

and performance venues that draw non-sports visitors to the area, including independent film

theatre The Music Box, dance club Metro Smart Bar Chicago, avant-garde theater venue Stage

Left Theatre, and live music venue The Cubby Bear.

Wrigley Field/Wrigleyville Visitor Demographics & Behavior

As previously mentioned, over 3 million people visit Wrigley Field on an annual basis to

see the Chicago Cubs. According to a study conducted by the Macrothink Institute, 73% of

visitors to Wrigley Field/Wrigleyville are non-Chicago residents, and 30-40% of visitors are

from outside the state. Over 50% of visitors identified the Cubs/Wrigley Field as their primary or

sole motivation for visiting Chicago. Another study of visitors to Wrigley Field conducted by

Scarborough Sports Marketing in 2012, found that 59% of Chicago Cubs game attendees are,

employed full time, 54% are white collar workers, and 40% are college graduates. Additionally,

nearly 50% of all adults in 17 counties in the Chicago area viewed a Cubs game via a media

platform in the past year.41

The Macrothink survey found that “attendees at Cubs home games may include a larger

number of “baseball fans” as opposed to “Cubs fans,” going to Wrigley Field to participate in the

tradition and history of professional baseball, that uniquely American game.” This implies that at

least a portion of Cubs attendees are motivated to visit not out of any loyalty to or particular

interest in the team, but rather out of interest in the sports heritage aspects of the stadium and

game experience; “With its ivy-covered walls, natural grass, old fashioned scoreboard, closeness

of the seats to the field, and simply years of existence, it’s hard to imagine a major league ball

41 Gregory, Ted. "Hot Chicago White Sox get Cold Shoulder." Chicago Tribune. 03 Sep 2012: n. page. Web. 13 Dec. 2013. <http://articles.chicagotribune.com/2012-09-03/news/ct-met-sox-fans-20120903_1_cubs-attendance-sox-attendance-sox-fans>.

32

park that represents the history and tradition of the game better than Wrigley Field. The results

suggest that some fans do indeed attend games at Wrigley to participate in the game’s history

and tradition.”42

The vast majority of visitors to Wrigley Field also visit Wrigleyville, whether to enjoy a

meal, drinks and entertainment in addition to the game, to shop for Cubs merchandise from the

countless sports vendors, or simply to park near the stadium. Much of the neighborhood’s

businesses cater to the stadium crowd; there are several sports-themed food & beverage

establishments (including Sluggers, Murphy's Bleachers, Casey Moran's, Rockwood Place, and

Sports Corner), the majority of the retail is Cubs-centered, and there are even a few lodging

options for fans to stay the night after the game. Wrigleyville is also home to a bevy of bars and

restaurants - frequented by locals as well as Cubs fans – as well as a handful of popular music

and performance venues that draw non-sports visitors to the area, including independent film

theatre The Music Box, dance club Metro Smart Bar Chicago, avant-garde theater venue Stage

Left Theatre, and live music venue The Cubby Bear.

According to the Chicagoland Chamber of Commerce, the tourism industry has a

significant economic impact on Wrigleyville; in 2012, annual tourism receipts included $76

million in lodging, $110 million in food & beverage, $48 million in retail, and $48 million in

non-Cubs entertainment,. Moreoever, a 2011 study by Conventions, Sports & Leisuire

International found that the Cubs/Wrigley Field and their visitors account for $638 million in

annual local revenue, 7,000 jobs, $282 million in annual lodging, restaurant, retail and

entertainment revenue, $244 million in annual personal earnings, and $81 million in annual tax

collections.43

According to Michael Mini, Vice President of Public Policy at the Chicagoland Chamber of

Commerce, the Wrigley Field renovations and proposed developments will maintain existing

economic impacts on Wrigleyville in addition to delivering $94 million in additional spending,

$19 million in new tax revenue, and 2,000+ new jobs (including 800+ construction jobs and

300+ permanent jobs.44

42 Bristow, Dennis, Kenneth Schneider, and Richard Sebastian. "Thirty Games Out and Sold Out For Months! An Empirical Examination of Fan Loyalty to Two Major League Baseball Teams." Journal of Management Research. 2.1 (2010): E2. Print. 43 Mini, Michael. "Chicago Plan Commission: Wrigley Field Expansion and Rehabilitation." Chicagoland Chamber of Commerce. Chicagoland Chamber of Commerce, 18 Jul 2013. Web. 13 Dec 2013. 44 Mini, Michael. "Chicago Plan Commission: Wrigley Field Expansion and Rehabilitation." Chicagoland Chamber of Commerce. Chicagoland Chamber of Commerce, 18 Jul 2013. Web. 13 Dec 2013.

33

SWOT Analysis - Wrigleyville

Strengths

-Established reputation as entertainment

district

-High degree of fan loyalty

-Easily accessible by public transportation

-Highly developed tourist infrastructure

(restaurants, bars, entertainment)

-Proximity to Wrigley Field maximizes

local business revenue

Weaknesses

-Retail: lacks diversity; dominated by

sports vendors/merchandise and ticket sales

-Some local resistance to Wrigley Field

Renovations

-Parking overcrowding

-Lack of diversity in types of

accommodations

Opportunities

-Retail: product diversification to attract all

types of shoppers

-More night games will increase demand

for local accommodations

Threats

-Delay of Wrigley Field Renovations

-Conflicts with rooftop owners

-Competition with White Sox, other

regional sports attractions

Tourism Plan – Recommendations

Based on secondary research of the proposed Wrigley Field renovations, interviews with

relevant stakeholders, and analysis of Wrigleyville tourism, we propose the following

recommendations for future planning:

1. Ensure that Wrigley Field Renovations correspond with the stadium’s tradition of sports

heritage.

As previously detailed, it is clear that Wrigley Field does not fit typical models of visitation

and fan loyalty, and that one of the primary motivations for visiting Wrigley Field is to

experience a piece of sports history. Therefore, it is essential that the renovations preserve and

enhance Wrigley Field’s historical assets. Potential strategies include:

§ Establish a small museum to honor Wrigley Field history & tradition

34

§ Consult with sports history experts throughout the renovation process to ensure

preservation of Wrigley heritage and prevent destruction of important artifacts/historic

spirit

§ Conduct focus groups before and during renovations to ensure that any new

developments do not damage Wrigley Field’s pre-existing heritage appeal

2. Create a regional marketing campaign featuring the Wrigley Field Renovations & their

future unveiling, focused on sports fans in target markets less than 350 miles from Chicago.

Potential Target Markets include:

§ Neighboring States: Indiana, Michigan, Wisconsin, Minnesota, Ohio.

§ Other Major and Minor League Stadiums

§ Other Sports Stadiums (College athletics, other sports)

§ Partnerships with regional baseball leagues

§

3. Schedule themed day and night games to appeal to current visitors and reach out to new

markets.

Studies of Chicago Cubs fans have indicated that a significant portion of attendees are not

particularly interested in the team or even the sport, but are motivated to visit Wrigley Field

based on the social aspects of baseball games (Macrothink). Wrigley Field/Wrigleyville can

reach out to untapped markets and highlight the entertainment/socialization appeal of visiting by

establishing promotional deals or themed games based on various visitor niches. Suggestions

include: family day, history/heritage day, “ladies’ day,” couples’ “date night” night game, .

4. Create opportunities for local vendors to establish in-stadium locations.

The recently opened Barclays Stadium in Brooklyn features a food court comprised of

satellite installations of local restaurants and other culinary attractions. By allowing local

businesses to establish a presence within the stadium, like Barclays, the Wrigley Field

developments can maximize financial benefits for local businesses while enhancing the

authenticity and spirit of this legendary Chicago attraction.

35

Work Cited

1. Greenberg, Jon. "A Simple Plan? Hardley." ESPN. 17 11 2010: n. page. 2. Chicagoland Chamber of Commerce. “The Restoration of Wrigley Field. 2013. PDF file. <

http://files.sj-r.com/media/news/CubsProposal_Final.pdf>. 3. Chicago Cubs. "FAQ." Restore Wrigley Field. N.p., n.d. Web.

<http://www.wrigleyfield.com/plan/faq>. 4. Dardick, Hal and John Byrne. “City Council Approves More Wrigley Field Renovation

Changes.” Chicago Tribune. 11 Dec. 2013. Web. <http://www.chicagotribune.com/news/politics/clout/chi-city-council-approves-more-wrigley-field-renovation-changes-20131211,0,907954.story>.

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