Officials have whittled down the five proposals submitted by three firms to build a casino and resort in Chicago to eliminate both proposals that would have built the gambling palace at McCormick Place, city leaders announced Tuesday.
That leaves all three firms that bid for the long-awaited Chicago casino still in the running to build and operate the facility. Mayor Lori Lightfoot and the Chicago City Council are counting on a casino to boost the city’s economy and funnel approximately $200 million into the police and fire pension funds, significantly easing the pressure on the city’s finances, while creating thousands of jobs and drawing tourists — and their fat wallets.
The finalists are:
- The $1.62 billion proposal from Rush Street Gaming, led by Chicago billionaire and Rivers Casino Des Plaines operator Neil Bluhm. Plans call for a casino and resort to be built on vacant land between the South Loop and Chinatown along the Chicago River on land set to be redeveloped by Related Midwest into a new development known as The 78.
- The $1.74 billion proposal from Bally’s to build the casino and resort on what is now the Chicago Tribune printing plant and newsroom near Chicago Avenue and Halsted Street.
- The $1.74 billion proposal from Hard Rock to build the casino and resort as part of the proposed One Central development, across DuSable Lake Shore Drive from Soldier Field.
Lightfoot does not expect to pick one of the three finalists and ask the Chicago City Council to ratify her decision until early summer, a significant delay since the fall, when the mayor’s office unveiled the five bids for the Chicago casino. In December, Lightfoot said she expected to make a decision in early 2022.
Chief Financial Officer Jennie Huang Bennett said the decision to narrow down the casino proposals would allow the city to conduct an “authentic” community engagement process that allows Chicagoans to review the details of the proposals and weigh in at three sessions set for April 5, April 6 and April 7.
At the same time, Huang Bennett acknowledged that every month that passes without a casino up and running costs the city millions of dollars.
“Time is of the essence for us,” Huang Bennett said.
Samir Mayekar, deputy mayor for economic and neighborhood development, said that process is designed to make sure Chicago’s casino is an “iconic” addition to the city’s world-class architectural history and puts Chicago on the “global map” for gamblers.
Once Lightfoot makes her decision, a special City Council committee made up of all committee chairs and vice-chairs as well as President Pro Temp Ald. Brendan Reilly (42nd Ward) will be convened. That committee will be led by Ald. Tom Tunney (44th Ward) while Ald. Jason Ervin (28th Ward) will serve as the vice chair.
Tunney is the head of the Zoning Committee and Ervin leads the Contracting Oversight and Equity Commission, in addition to leading the City Council’s Black Caucus.
In addition to the approval of the Chicago City Council, the casino proposal also needs the endorsement of the Illinois Gaming Board.
Bally’s proposal to build a casino on what is now the home of the Chicago Tribune would be the most lucrative for the city and its sister agencies, according to a report released Tuesday by the mayor’s office from Union Gaming, the city’s gaming consultant.
A Bally’s casino with 3,400 slots and 173 table games as well as a 500-room hotel west of River North would generate $191.7 million in its sixth year of operations, according to the study.
The Rush Street casino at the 78, which includes 2,600 slots and 190 table games, would generate $174 million for the city and its sister agencies, the least amount of the three remaining casino proposals, according to the study.
However, that estimate relies on the construction of a planned observation tower and hotel as part of the resort, and Rush Street officials have not yet provided city officials with evidence they will be able to obtain financing for that part of their proposal. Rush Street officials said they planned to provide those assurances to city officials.
All three firms told city officials they will meet the requirements imposed by city officials that 25% of the facility be owned by Black, Latino or Asian shareholders, 50% of its employees be from Chicago and at least 26% of the construction contracts go to firms owned by women or Black, Latino or Asian Chicagoans.
McCormick Place Proposals Rejected
City officials rejected a proposal from Rush Street to renovate McCormick Place’s Lakeside Center as well as a proposal from Bally’s to build a casino on the south side of McCormick Place near DuSable Lake Shore Drive and 31st Street.
Ald. Sophia King (4th Ward) immediately objected to the proposal, saying it would complicate ongoing efforts to redevelop the former Michael Reese Hospital site into a new city neighborhood.
While the proposal to build a casino on the south side of McCormick Place never gained much traction, Rush Street’s plan for the Lakeside Center won the backing of Preservation Chicago, whose leaders praised the proposal which promised to rescue a neglected building the organization has long championed.
However, a coalition of ecologists and environmentalists objected to McCormick Place as a casino site on the grounds that it’s already the top bird killer in the city. A brightly-lit casino would have only made that issue worse, advocates said.
However, Huang Bennett said that the proposal to build the casino at what is now the Lakeside Center was doomed because it would be too expensive to replace the facility, which is set to host 253 events in the next 13 years.
The plan offered a “creative, adaptive reuse” but ultimately would not generate enough revenue to replace the facility elsewhere on the McCormick Place campus, Huang Bennett said.
The decision to eliminate both proposals to build a casino at McCormick Place also avoids a direct confrontation with Gov. J.B. Pritzker, who has said he’d rather not place a Chicago casino anywhere near McCormick Place or the city’s central business district.
In September 2019, Pritzker said he’d like to see the casino developed in an area of Chicago that has not benefited from the recent development boom downtown.
None of the remaining proposals meet that standard.
City officials could also allow the winner of the casino license to open a temporary casino while the permanent location is built. The report released Tuesday suggests the Medinah Temple or the Sheraton Grand Chicago as potential locations.
Hard Rock Casino
The proposal from Hard Rock is part of the proposed One Central development, which would create a massive mixed-use development by building over the train tracks west of Soldier Field. That plan relies on $3.8 billion in financing from the state.
The Hard Rock Chicago casino would include a 3,500-seat music venue, a 500-room hotel and a food hall in addition to a casino with 3,000 slot machines and 166 table games.
The development has yet to win the support of Ald. Pat Dowell, whose 3rd Ward includes the One Central development. Dowell is running to replace retiring U.S. Rep. Bobby Rush in June’s Democratic primary.
Hard Rock Chicago officials told Chicago leaders that the casino could be built regardless of whether the state financing is approved, Huang Bennett said.
A Hard Rock Chicago casino could also compete with the Hard Rock casino 29 miles away in Gary, Indiana, according to the Union Gaming study.
“The city will want to be comfortable that the operator will work to maximize revenues in the Chicago casino,” according to the study. “This dynamic is especially important for the Chicago casino since approximately 75% of gaming revenues are projected to come from local activity.”
Because taxes on slot machine wagers are lower in Indiana, Hard Rock officials may have an “incentive” to send slot aficionados to Gary, according to the study. Taxes on wagers placed in table games would be lower in a Chicago casino than in Gary, officials said.
The city’s study sounded a similar warning about the proposal from Rush Street for a Rivers Casino as part of the under-construction 78 development.
The Rivers Des Plaines casino is 17 miles from the proposed Chicago casino, which would include a riverfront plaza; an observation tower with indoor and outdoor space; a riverfront venue for live entertainment as well as a 300-room hotel tower as well as a food hall. The casino would have 2,600 slot machines and 190 table games, according to the plans.
However, “there should be little tax incentive for Rivers to direct customers to the Des Plaines casino versus the Chicago casino. Further, the Chicago casino would be a much larger project than Rivers Casino Des Plaines,” according to the study.
With his close ties to Chicago’s political and economic leaders, Bluhm has long been perceived as the front-runner in the high-stakes craps game that will determine the future of Chicago’s casino.
Lightfoot attended law school at the University of Chicago with Bluhm’s daughter, Leslie Bluhm, and they remain close friends.
However, Ald. Byron Sigcho-Lopez, whose 25th Ward includes The 78, has said a casino should only be built there with the support of the surrounding community.
The leaders behind the Rivers 78 proposal told city officials they will forgo $27 million that the project could get from the area’s Tax Increment Financing “in the interest of providing financial value for the city,” according to the city’s report.
The 78 is already set to be home to the Discovery Partners Institute, which would be part of the University of Illinois system as part of an effort to boost tech innovation and company growth.
Mayekar said both a casino and a hub of tech innovation could co-exist at the 78, and any plan for a casino would protect the Chicago River.
If the city awards Bally’s the Chicago casino license, it would mean the Tribune would have to find a new place to print its newspaper and house its journalists.
The proposal has already drawn opposition from River North residents, who are concerned it will snarl traffic and reduce the value of their property values.
Bally’s plan also includes a 3,000-seat theater, an exhibition hall, a Chicago sports museum, an extension of the Riverwalk, a 500-room hotel tower, restaurants and a food hall addition to a casino with 3,400 slot machines and 173 table games.
The Bally’s proposal is the only one to have at least the initial support of the area’s alderpeople, Ald. Walter Burnett (27th Ward), Ald. Brian Hopkins (2nd Ward) and Ald. Brendan Reilly (42nd Ward).
Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]