UPDATE: Chicago Casino Study: Taxes Too High to Be Profitable
Where to put a Chicago casino? Chicagoans will have some more insight on that soon.
A $120,000 feasibility study evaluating five potential sites proposed by Mayor Lori Lightfoot is now in the hands of the Illinois Gaming Board and will be made public Tuesday morning.
The goal of the report is to determine whether or not a casino would do well in any one of the following locations:
• The old Michael Reese Hospital site in Bronzeville, south of McCormick Place and near the lake.
• A vacant parcel in Lawndale at Kostner Avenue and Roosevelt Road on the West Side.
• Next to Harborside International Golf Center in the Chicago port district on the Far Southeast Side.
• South Works – the old U.S. Steel site on the Far South Side.
• And a parcel of land at Pershing and State – four blocks south of Guaranteed Rate Field on the South Side.
Some aldermen have already dismissed the idea of a casino in their ward, including 3rd Ward Ald. Pat Dowell, who is opposed to the Pershing and State site.
“A casino … is simply not appropriate for this site,” Dowell said. “A Bronzeville casino would destroy the neighborhood’s character without maximizing the benefit to Chicago.”
Ald. Sophia King, 4th Ward, has also expressed opposition to the Michael Reese and former U.S. Steel sites, located in her ward. Ald. Michael Scott Jr., 4th Ward, was lukewarm, saying he doesn’t think Lawndale has the amenities to support a casino. But if the development included plans for restaurants and other local small businesses, he could be in favor. Ald. Susan Sadlowski Garza, 10th Ward, says she supports the Harborside site.
Meanwhile, an economist who has studied the economic impact of casinos said the ideal site will satisfy a few conditions.
“You want to be in a place where you’ll have a high demand for gambling services, and being close to downtown Chicago is a way to address that,” said Dr. Michael Wenz, professor of economics at Northeastern Illinois University. “So I’d be in a place where you can draw the gamblers from downtown, especially tourists, but draw the economic development and employment opportunities from the areas you want to draw the workers from. In that sense, Michael Reese makes the most sense of the five sites listed.”
Lightfoot says she’ll wait to see what the report says before speculating on the best location, but that the final site could be in a location outside the five so far put forward.
“Those sites were ones that have historically been talked about over the many years there have been questions about a Chicago casino, but I wouldn’t fixate on them because it’s not clear that any of those sites will ultimately be ones that are under consideration,” Lightfoot said.
The feasibility study will also look at the financial structure of the deal. The bill passed by the Illinois General Assembly allows that the owner would take one-third of the revenue, while the state gets a third and the city gets a third. Lightfoot has expressed doubt that a private operator would even want to be a part of a deal like that.
But Wentz says there’ll be enough in each slice of the pie to make an owner happy.
“For a casino operator, the right to have a casino in Chicago is extremely valuable,” Wenz said. “It’s going to be interesting to see how this evolves, but a casino in Chicago I expect to be wildly profitable even given the structure of the deal.”
Follow Paris Schutz on Twitter: @paschutz
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