Chicago Mayor Lori Lightfoot wants an upfront payment of $75 million from the gaming operator chosen to develop a downtown casino, according to Crain’s Chicago Business. That total includes $40 million on selection plus $2 million a year down the road. It’s not clear if the money would go to the city’s general budget, to specific neighborhood projects or other purposes. Also, it’s unclear whether the money would be an early tax payment or is an additional add-on.
Industry sources said requests for upfront payments from casino operators are not unusual nationally. Observers said the move positions Lightfoot, facing re-election, as a hard bargainer, winning the best possible deal for Chicago. The mayor is expected to sell her eventual choice among the three finalists to the city council and the Illinois Gaming Board within the next few weeks.
The three competing developers are Bally’s, proposing the Chicago Tribune printing plant property at Halsted and Chicago; Rush Street Gaming’s proposal within the 78 development at Roosevelt and Clark; and Hard Rock’s proposal within the One Central development west of Soldier Field. Residents in all three areas have expressed strong opposition in a series of public meetings and now some aldermen have said they oppose the sites. Bally’s is the only finalist that has made an upfront offer, of $25 million.
In recent testimony before a virtual meeting of the Special Committee on the Chicago Casino, a group of aldermen hand-picked by Lightfoot, Chicago Chief Financial Officer Jennie Huang Bennett confirmed city officials “asked for an upfront payment from each of the bidders and continue to negotiate that.” She said, “We are working to negotiate a better proposal from what we had released in the evaluation report,” adding the payments would be a “bridge” between what the city needs now and what it will get when a temporary casino presumably opens by 2024, with a permanent venue opening a few years later.
At the virtual meeting, the Special Committee took questions about subjects from timing and process to resurrecting two discarded proposals involving McCormick Place. The city is counting on a casino to generate $200 million in annual tax revenue to make up a shortfall in pension funding. Lightfoot plans to submit the final choice to the Illinois Gaming Board for approval in time to include upfront payments from the winning bidder in the 2023 fiscal budget this fall, said Alderman Tom Tunney, chairman of the Special Committee.
At the committee meeting, Bennett also acknowledged that labor peace and subsequent wage agreements “need to be discussed and they need to be negotiated” for casino operations. She said the three casino operators have agreed to adopt labor agreements with construction unions before any work can start. “As a part of the evaluation, the city will consider very heavily the agreements that are in place before it proposes something to council,” Bennett said.
