Chicagoans Drill Casino Finalists

In three recent and often contentious community meetings, officials from Hard Rock, Bally’s and Rush Street Gaming presented their vision for a downtown Chicago casino, and responded to questions about their proposals.

Chicagoans Drill Casino Finalists

Community hearings introducing Chicago Mayor Lori Lightfoot’s three casino developer finalists took place April 5, April 6 and April 7, starting with Hard Rock Chicago, then Bally’s and Rivers 78. All three faced overflow and skeptical crowds.

Martina Hone, the city’s chief engagement officer, set the tone before Hard Rock Chicago officials began their presentation. She told the audience some may have “many strongly held and sincere views” but “screaming and hollering” is not going to help the city pick the winner.

Hard Rock. Inside the packed auditorium, Hard Rock Chicago officials presented plans for the $1.75 billion entertainment complex that would be built over train tracks west of Soldier Field. The venue would offer 3,000 slot machines and 1,166 table games, a 3,500-seat Hard Rock Live entertainment venue, 500-room hotel, spa, rooftop space, “several” restaurants and six bars. Officials said the project could generate $185 million in tax revenue within six years.

The facility would be part of the proposed One Central development, which has requested $6.5 billion in state assistance to create a gigantic retail center and transit hub, which already faces major community opposition. During the heated question-and-answer session, one audience member said, “You put together a comprehensive proposal, but One Central is the millstone around your neck. The community doesn’t want it.”

Hard Rock officials said the project could move forward even if that state aid doesn’t come through for One Central. Hard Rock Chief Executive Officer Jim Allen said, “We have nothing to do with the massive project for One Central. That’s separate from us. The development will not take one penny of subsidies on this casino.”

On another topic, Jim Reynolds, the African American chief executive officer at Loop Capital, told the crowd only the Hard Rock proposal includes minority involvement at the highest levels. The other two finalists will include minority investors as limited partners with “no influence,” he stated.

The Hard Rock officials said a temporary casino could open by second quarter 2023 and the permanent location would open in third quarter 2025. However, a city analysis said that timeline was “aggressive,” given the approvals needed from the Illinois Department of Transportation, Metra and the Metropolitan Pier and Exposition Authority, which manages McCormick Place. “The significant number of approvals needed creates execution risk to this proposal and the possibility for construction delays,” the city report said.

On the plus side, however, analysts stated Hard Rock Chicago could generate an estimated $200 million in annual revenue for the city, which would go toward funding gaps in Chicago’s fire and police pension plans. The state also could receive $200 million in yearly tax revenue.

Many of the attendees expressed concerns about increased traffic, crime and noise potentially “destroying the quality of life” in their neighborhood. Landmark Development President Bob Dunn noted the original designs have changed to extend the buffer with local neighborhoods. Other issues included minimizing bird collisions on the reflective glass structure and including local restaurants in the plan.

The audience also was shown several videos promoting Hard Rock that included the city’s musical heritage, computer renderings the proposed casino floor, entertainment venue and district exterior; and testimonials from local minority business owners touting the casino as a local economic driver.

Bally’s River West. Rhode Island-based Bally’s Corp. proposes building a $1.74 gaming and entertainment complex at the 30-acre site of Tribune Publishing’s printing plant in River West. The project would include a casino with 3,400 slots and 173 table games, hotel, 3,000-seat theater, outdoor music venue and Chicago Riverwalk extension. Bally’s Chairman Soo Kim said a temporary casino could open by second quarter 2023 and the permanent casino in first quarter 2026.

City analysts said Bally’s proposal is the most lucrative of the three finalists, generating yearly tax revenue of $192 million. However, that depends on Bally’s finishing both phases of construction, starting with 100 hotel rooms and expanding to 500. Unlike the other two finalists, Bally’s also has offered a $25 million upfront payment directly to the city if their plan is selected.

Attendees at the Bally’s meeting, like those at the Hard Rock gathering, expressed concerns about congestion, noise, crime and above all, traffic. (In fact, hours ahead of the meeting, the city issued a traffic alert hours in anticipation of the expected 300-capacity crowd). The 22,000-member River North Residents Association previously sent letters to their aldermen spelling out their objections. The group’s president, Brian Israel, wrote, “The Bally’s Casino complex is simply the wrong project for this location. The additional strain on infrastructure, noise lighting, traffic and impact on property values are unreasonable burdens.”

At the meeting, a River West resident declared, “I’m just gonna say it, flat out no. This casino does not belong in a neighborhood. You need to show the benefit of a casino to this neighborhood and as of right we have not articulated one good reason.” Thunderous applause followed.

Kim said the plan actually would reduce traffic because the budget includes millions of dollars in infrastructure improvements, including resurfacing Halsted and putting up new traffic and pedestrian signals. “Our project is complementary to the problems that you have,” Kim said. City officials previously indicated Bally’s plan “should result in less traffic in the weekday morning, similar traffic levels in the weekday evenings and additional traffic during weekend evenings.”

Regarding crime, Kim noted casinos “radiate security for blocks” through on-site safety personnel and video surveillance. “The worst place to commit a crime is around a casino,” he said.

Alderman Walter Burnett Jr. said although it seemed most of the attendees opposed the casino, a “silent majority” actually want a casino in the neighborhood. He said, “A lot of my senior citizens who don’t come to these things like to gamble. I’ve only had maybe four emails, a handful against.”

Bally’s already has had to tweak its minority investment program. Previously it offered potential minority investors the opportunity to purchase shares, but the company would have had the right to buy out the minority shareholders after six years. Chicago’s Chief Financial Officer Jennie Huang Bennett said the city “values having longevity of minority ownership” and Bally’s removed the provision.

Although Kim said criticism about minority participation was “noise,” he said, “We’ve continued to evolve on this,” adding women and minorities will account for “at least” 25 percent of the ownership group.

Another significant issue is the environmental impact of building a casino along the Chicago River. The nonprofit Friends of the Chicago River said Bally’s and Rivers 78 both are “an intense entertainment use” that would totally alter the character of some of the largest remaining river edge sites in Chicago. The group’s Executive Director Margaret Frisbie said, “We just think that the river is a place for people and wildlife, and that doesn’t usually go hand in hand with a casino.”

Rivers 78. Chicago-based Rush Street Gaming, owned by billionaire Neil Bluhm, has proposed a $1.62 billion riverfront casino at the 78, Related Midwest’s proposed $7 billion, 62-acre megacomplex on long-vacant land in the South Loop. The project would include a casino with 2,600 slots and 190 table games, live entertainment venue, 300-room hotel, restaurant, food hall, five bars, boat dock and a 1,078-foot observation tower that Related Midwest president Curt Bailey has called “an Eiffel Tower for Chicago.”

Bailey said, “This is where we’re different. We’re creating an entire neighborhood from the ground up. We’re shifting the epicenter of Chicago’s tourism south.”

Officials said a temporary casino could open in second quarter 2024 and the permanent casino in fourth quarter 2025. A city analysis indicated the casino would generate $174.2 million in annual revenue if it includes the hotel and observation tower; it’s the lowest projection among the three finalists.

Rush Street Chief Financial Officer Tim Drehkoff noted the company’s Chicago roots and history. “We only develop casinos in urban markets. It’s all we do and this experience matters. We have a community centered approach that drives everything we do,” he said.

Many in the community, however, seemed to want Rush Street to take its business elsewhere. Prior to the presentation, which one local newspaper called “the city’s final airing of public grievances” over a downtown casino, South Loop residents held a protest. Among them was Grace Chan McKibben, executive director of the Coalition for a Better Chinese American Community, said casinos have habitually “preyed” on vulnerable residents of nearby Chinatown.

Drehkoff responded the company has structures in place to identify and help problem gamblers. He added, “We don’t do predatory marketing like that. It’s not good for business. Our customers are high-end, they come to our casino to have some fun, make some wagers and have a great time.”

Also, last month, the 78 Community Advisory Council, a group of neighborhood representatives appointed by Lightfoot, released a survey indicating 78 percent of nearly 400 area respondents were “unsupportive” of the proposed casino. They cited concerns about crime, traffic and the character of the development. Bailey dismissed the survey as “a very small sample size” and not representative of the broader support for the Rivers 78 proposal.

He said, “There are many, many more constituents out there that are interested in seeing something happening in jobs and kind of changing the whole metric of where tourism occurs in the city.” However, Bailey added he welcomed community input, which sometimes leads to “significant changes” in a proposed development.

Bailey said more than 125 minority investors have invested more than $100 million in the project, at an average of $800,000 and equity participation starting at $25,000. He said, “For me, the real important piece was to be out to Chicagoans and to have a lot of investors, forgetting about denomination, but just they would participate and be our partners on the site. And that’s what we’ve been able to do.”

They raised many of the concerns that have been leveled against the other bidders, including increased traffic, the potential for more crime and the threat of gambling addiction.

After the meeting, Alderman Byron Sigcho Lopez said the presentation didn’t address the “legitimate concerns” of his community. If Rivers 78 wins the competition, he said he’ll “continue to engage” residents who are “demanding answers.”

After Lightfoot selects a finalist, that developer will be evaluated by a new special city council committee. If approved, the proposal needs the full support of the city council before it’s sent to the Illinois Gaming Board for the final go-ahead.