Chicago may up the ante when it comes to returns from the city’s chosen casino licensee, Bally’s Corp.
On May 5, Mayor Lori Lightfoot announced that the city had selected the Rhode Island-based firm over two other finalists to develop and run the city’s first casino resort at the 30-acre River West site, now home of the Chicago Tribune Publishing Center. Now, according to Crain’s Chicago, the city proposes assessing the site at a minimum of $125 million a year, even if the valuation changes.
A city council committee was expected to vote on Lightfoot’s proposal last Friday, but Alderman Tom Tunney announced the vote would not happen that afternoon. And according to a report on ABC-7, final approval could be months away.
Bally’s has already agreed to pay $40 million upfront after the agreement is approved and $4 million in additional annual payments. The city is expecting at least $200 million in annual tax revenue from the project, which will help top off almost-bankrupt police and firefighter pension funds.
If the new assessment plan goes forward, the city could collect more taxes on the $1.7 billion property if the Cook County Assessor’s Office raises its assessment, reported real estate website TheRealDeal.com. The proposal would also require Bally’s to make a “good-faith effort” to award about a third of building contracts to minority-owned and women-owned firms.
City officials revealed the temporary casino would be housed in the landmark Medinah Temple while construction is completed on the main site. Downtown Aldermen Brendan Reilly and Brian Hopkins have been outspoken in their opposition to putting the temporary casino there, with Reilly calling it “switcheroo.”
“We’re being told that if we don’t approve this soon, that we will have no choice but to raise property taxes, [but] we’ve been receiving this kind of drip-drop of information from the administration. … We are being asked to review something that is literally being changed as we go,” Reilly said.
Alderman Walter Burnett, on the other hand, supports the proposal, and agrees with Lightfoot that the alternative would be a property tax hike.
According to the Chicago Sun-Times, Lightfoot is rushing to secure the $40 million upfront payment for her pre-election budget.
Tunney, who is also the casino committee chairman, said there may not be enough votes to approve the companion agreements. “There’s still a lot of work to be done.
“We have local opposition for the temporary site,” Tunney told the Sun-Times. “There was a lot of concern about safety and congestion in the neighborhood of River North. They did not bargain for this one. There’s gonna be a lot of convincing to do with our committee members…I’m gonna work hard trying to make sure that people feel comfortable if they’re in support of it and those that are not feel (heard).”
In a May 18 column in the Chicago Tribune, former city budget manager Paul Vallas slammed the selection process and the proposal as it now stands.
“The fact remains that the largely secretive selection process has resulted in the license being awarded to the least experienced operator, at a location in need of massive infrastructure upgrades and in a community where the majority of local residents oppose its location,” he wrote. “Community input? Not so much. It was taken in a hastily called 11th-hour and curated fashion and then promptly ignored.”
He continued, “As for the temporary site at the landmark Medinah Temple? The selection of the site was sprung upon the local alderman and his constituents with barely a hint, let alone opportunity for input.”
“As bad as the process has been in terms of transparency, even more offensive is taxpayer-funded administration mouthpieces presenting the casino as a solution for the city’s seemingly intractable financial problems,” Vallas wrote. “It’s history repeating itself. The mayor and her allies are outright lying about the two claimed important benefits of the casino: that it provides a solution to the city’s worsening pension crisis and that it will enable the city to avoid a property tax increase. It will do neither.”
Alderman Hopkins concurred with most of those points, and said Lightfoot created the city council committee to give herself “political cover” for a decision that was already in the bag.
Lightfoot has dismissed criticism that she is trying to fast-track the casino through council and then the Illinois Gaming Board, which has the final say on issuing a casino license.
City officials hope to advance Bally’s proposal to state regulators by summer. Meanwhile, in a videotaped message to city residents, Lightfoot said, “We may not be able to calm all of your concerns, but we are confident that this casino will not only benefit our entire city, but you as well.”
