Casino Operators Agree Chicago Mega-Casino Should Go Downtown

A Chicago casino could bring the city a $150 million annual jackpot. But officials may need to bring McCormick Place to the table first.

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ABEL URIBE/CHICAGO TRIBUNE The Chicago Skyline seen from the Maccomic Place Lake Side Center (right) from the bridge connecting the Lake Side Center and the McCormic West on October 13, 2015.

ARMANDO L. SANCHEZ/CHICAGO TRIBUNE 31st Street and Jean Baptiste Pointe Dusable Lake Lake DRIVE 28 Agal parking and staging area A trailer parked in UCK MARSHALING YARD.

CHRIS WALKER/CHICAGO TRIBUNE The view from the north side of the afternoon hose of the Chicago River. Just south of Roosevelt Road, it is a border with the 6 2-acres planning plan of the 78th place.

E. JASON WAMBSGANS / CHICAGO TRIBUNE February 16, 2022, one of Chicago's casino spaces, the site of Tribune, north of Chicago River and Chicago Street.

On March 9, 2020, Patron and the media officials packed in the sportsbook corner of Rivers Casino, Deathplens.

Show the sign Abel Uribe/ Chicago Tribune

On October 13, 2015, the skyline from the Maccomic Place Lake Side Center (right) from the bridge connecting the Lake Side Center and the McCormic West.

Robert Chanic ｜ Rchannick@chicagotribune. com ｜ Chicago Tribune Update: October 8, 2022 15:42.

Almost everything is at risk for Chicago as the winner decision of the casino component approaches. According to monitoring, Chicago has increased its economic status and has gained the opportunity to eliminate the lack of municipal pension financial resources by using up to $ 150 million of existing annual tax revenues from casinos.

However, three of the five services are planning to apply for the Maccomic Place Campus, which may be a wildcard. Maccomic Place has not yet reached an agreement with cities and developers, and has not agreed to reuse the space of the convention center to the casino.

"Larita Clark, the CEO of Metropolitan Pia and Experity, the owner of the McCormic Place, says," If our own land is included in it, they are with us. I hope you will come to talk. "

In a report presented to the MPEA board this week, Clark expressed concern about plans to convert the freight yard, Lakeside Center and North Building into a gambling palace at McCormick Place without providing alternative facilities to fulfill their current functions. The MPEA is a municipal corporation with a board of directors appointed by the governor and mayor, whose approval must be obtained if the city decides to use McCormick Place for a casino.

The trailers are parked at the McCormick Place Truck Marshaling Yard, a 28-acre parking and convention center handling facility at the corner of 31st Street and Jean-Baptiste Pointe du Sable Lake Shore Drive.

Clark said none of the developers discussed the proposals with the MPEA. The city "asked questions" and toured the facilities, but didn't know anything more about the proposals, she said.

More than three months after the announcement of the five casino proposals in Chicago, Mayor Lori Lightfoot is still keeping things secretive.

The mayor's office previously said it plans to decide on the winner "in early 2022," but declined written requests for interviews and updates on the selection process. But there's no shortage of opinions on which proposal is best for the city and which has the most potential.

Developers seeking a Bally's, Hard Rock or Rivers casino have proposed plans ranging from redeveloping the vacant McCormick Place building to demolishing the Chicago Tribune printing plant, but industry analysts say the city's decision is likely to come in on the low side.

After the mayor's decision, the winning bidder must get approval from the City Council and the Illinois Gaming Commission, and Chicago's first casino must open within three years. But licensees can only operate in temporary locations for a maximum of two years, meaning what happened in Las Vegas could happen in the Windy City in 2023.

Millions of dollars at stake

Chicago's casino would be the state's largest, with 4, 000 slots, double the number of any other casino in Illinois. It also has the highest casino tax rate in the state, at about 40 percent of adjusted gross revenue.

"Each jurisdiction must decide whether they want investment and jobs, tourism and entertainment, council expansion, or tax revenue," he said. "When Chicago set its tax rate, they announced they wanted to get tax revenue.

The Rivers Casino in DES Plains is the most tax-heavy of the 11 current state casinos, bringing in $458 million in adjusted gross income last year and paying about $148 million (32%) in the form of state and local taxes, according to the Gambling Council.

Analysts say Chicago casinos could double their adjusted gross income (the amount collected after profits are paid out) while providing a big tax break for the city and a good return for investors.

In a 2019 study, Las Vegas-based Union Gaming Analytics criticized Chicago's original proposed 72% casino tax as "highly burdensome," but released a more optimistic assessment of the opportunities after the revised casino tax rate was lowered. In the 2020 study, Chicago casino operators have a target total revenue of more than $800 million per year, with a projected profit margin in the mid-20% range.

Guests and media members gather in the sportsbook zone at Rivers Casino in Des Plaines on March 9, 2020.

According to Erica Noglug, senior analyst at the State Government Forecasting and Accountability Commission, with adjusted total revenue of $800 million, split 70/30 between slot machines and board games, which are taxed at different rates, Chicago casinos would receive $310 million in the form of taxes, or an effective tax rate of 38. 7%.

According to the model, the staff would receive $166 million and Chicago would receive $144 million in annual tax revenue from the casino, Noglug said.

Besides the projected tax revenue, the city will also take into account other factors, such as the Illinois Gambling Council's goal of providing at least 25% of minority investment in the casino. The city also has a goal of 26 percent minority participation in the design and construction of the casino.

It remains to be seen which offer will be chosen to reap the most benefits.

Bally's: Parking Lot or Printing Plant?

BALLY'S was once a Chicago casino operating company, but was acquired by a listed company that owns and operates 14 casinos in 10 states in 2020. In June, Bally's acquired Rock Island's Jumer's Casino and Hotel for $ 120 million, renamed Bally's Quad Cities, and entered the Illinois market.

One of the two services to Chicago is Maccomic Place Truck Marshall Ring Yard (3 1-chome and Jean Baptist Point Dusable Lake Shore Drive 28 Acker Track Transport Facility) It is a $ 1. 6 billion casino construction.

In a Tuesday demonstration, MPEA stated that in 2019, more than 35. 000 trucks used Marshaing Yard in 2019, before Pandemic devastated the activities of the Great City Council, and gave a great asset to the McCormic Place as a great asset. Ta.

Bally's Chicago is planning a complex of $ 1. 6 billion, hotels and entertainment on the land of Maccomic Place Marshaing Yard.

In real time, the property is guaranteed to another person. In 2020, the MPEA signed a plan for Marshaing Yard's ground leasing with GRIT Chicago, a group that redevelops the site of the former Michael Lease Health Clinic. MPEA's lawyer Matthew Simmons said in a Council on Tuesday that the contract would "do not allow" to negotiate with anyone else in Ballyzes until the end of the year.

Sofia King, the fourth district representative, has already opposed the proposal, saying that the residents of the nearby Bronze Building do not want a casino.

Chris Juet, the director of Bally's business development, said that the company will continue to cooperate with the general public to have the residents interested and to change the project if necessary.

"We are here to build a lon g-term partnership. I will stick to a flexible plan. "

BALLY's other suggestions include Dalla s-based Nexstar Media Group in 2019, acquired in 2019 as part of the tribune media, a former parent company of Tribune Publishing, for $ 4. 1 billion. Includes the options for purchasing a printing factory at the Freedom Center.

On February 16, 2022, one of Chicago's casino construction site, the site of the tribune on the west coast of the Chicago River, the north of Chicago Street.

The Tribune's lease on the Freedom Center expires in June 2023. Jewett said the 41-year-old building overlooking the Chicago River is scheduled to be demolished to make way for a $1. 8 billion casino complex.

"Our properties are just not viable," he said. "They don't make sense in a big, wealthy city like Chicago, and there's no other big city in the world where a print publication is printed in the heart of such a financial district."

Jewett projects adjusted gross profits of more than $1 billion annually once the casino is fully operational. Bally's offered the city $25 million if it chose the Tribune site, or $50 million if it chose the trucking yard, Jewett wrote.

Rivers: Rebuild Lakeside or add The 78

Chicago-based Rush Street Gaming is the owner of four casinos, including Rivers Casino Des Plaines, and is working with two developers, including McCormick Place, on separate services.

The Rivers Chicago McCormick plan is a $1. 3 billion plan to redevelop Lakeside Center in the former East Building. The developer is touting the plan as an opportunity to reuse an unused building and has committed to $500 million in deferred maintenance costs.

Chicago skyline, October 13, 2015, looking at McCormick Place Lakeside Center (right) from the bridge connecting Lakeside Center and McCormick West.

But the Lakeside Center needs repairs, Clark says. Clark says it still has value as a convention center, with 253 events planned through 2035, bringing $13. 8 billion in economic impact. According to her text, almost all of these events cannot be moved to another space on campus.

According to Clark's text, replacing 600. 000 square meters of meeting space would cost $1 billion and take six years.

In addition, there are concerns that a casino at McCormick Place would be unpopular in the commercial market. In a sample of convention center buyers, 38% opposed Rivers' plan to establish a casino at Lakeside and Bally's plan to build a casino on the track land.

According to Clark, some conventions and trade shows choose Chicago because it is not considered a casino destination like Las Vegas.

"Many of our shows are treated like business meetings and trade shows and do not need distractions," Clark says.

"We are a good answer to all concerns they have," said the founder of River's Chicago McCormic's project partner, Farpoint Development, founder, Scott Goodman, after the MPEA Council on Tuesday. I have a solution. "

Developers estimate the total amount of profits to taxpayers by selecting a rescue second of approximately $ 1. 5 billion. In addition to repair costs, the developer pays $ 15 million a year to the city as a recruitment fee for guests, eliminates the current operating loss of $ 10 million, and owned by a private hotel casino. We propose to send guests.

According to the developer, renovating existing buildings will open a permanent casino within 12 months of approval of the project, speed up the process, and get an additional tax revenue of $ 367 million from the city and states. 。

"Everyone else has designed new and wonderful things, and may be needed, but in the fields that may not, our projects can make a great profit to taxpayers. It is unique, "said Gudman.

The Rush Street Gaming Company, led by Neil Bloom, a chicag o-based developer Neil Bloom, is a partnership with related midwests, as part of the second proposal, which is occupied by land with a long charger in the southern loop. The plan is to build a casino on the banks of the 62 Acula 78-area.

The view to the southern sleeve of the South Chicago River from the north to the Roos Berth Road is a border with the 78 Aquaretur MegaStrouse project.

Rivers Casino, a 78 plan, which is the center of the event, restaurants, nightclubs, and observation tower overlooking Roosevelt Road. The planned casino is the center of the entertainment area in the northern part of an ambitious complex project.

"We have everything necessary for the new Chicago Entertainment Area in Chicago's new entertainment area to achieve great success," said Kart Bailey, President of Relations Midwest, and developed the city center. The possibility of public transportation and casino mooring facilities on the riverbank.

Joe Busel, the main analysts of Playillinois. com, a site specializing in the gambling industry, said in all proposals that the Reverse's 78 plans would be the easiest to use in terms of transportation.

However, according to him, "If the city is at the forefront of desire to put something on the market quickly, the reversal McCormic will be served."

Hard rock casino: Is it a month or a distant opportunity?

Florida-based Hard Rock International operates more than a dozen casinos in northwest Indiana, and its recently opened Hard Rock Casino Rockford received approval this month from the Illinois Gaming Commission to build a permanent casino at the former Clock Tower Resort.

In Chicago, Hard Rock is proposing a $1. 7 billion casino at One Central, a massive complex planned to be built over the railroad tracks west of Soldier Field.

This rendering shows a hub adjacent to Soldier Field, integrated with a transit center, in the $20 billion One Central plan.

Hard Rock has submitted a proposal to use the North Room at McCormick Place as a temporary casino until a permanent facility is built. But the MPEA said it's "not feasible" to implement the North Building as a temporary casino because of upcoming events.

Despite Hard Rock's strong opposition to using North Place as a temporary casino, the vast majority of McCormick Place shoppers surveyed supported the Hard Rock and Rivers 78 proposal.

But Hard Rock Chicago's bid hinges on Landmark Development's proposed $20 billion megaproject, One Central, getting off the ground.

"In my opinion, Hard Rock's best chance is because of the One Central plan.

Hard Rock International spokeswoman Gina Morales said the company adamantly refused to elaborate further, citing the Chicago casino plans. Landmark Development did not respond to requests for comment.

Gregory Pratt of the Chicago Tribune reached out directly to reporters.