Chicago Mayor Lori Lightfoot raised the stakes on the city’s casino bidders.
The city is seeking $75 million from the winner selected from the three finalists, or a commitment to pay $40 million up front and $2 million a year later, Crain’s reported, citing unidentified people close to the matter.
Hard Rock, Bally’s and Rush Gaming pitched the final three plans after Lightfoot’s office tossed out alternative proposals by Bally’s and Rush that would have placed a casino at or near the McCormick Place convention centers.
Bally’s, which had already offered the city $25 million up front if it’s selected, is targeting the Tribune Publishing Center in River West. Rush is eyeing putting one of its Rivers-branded casinos at The 78 in the South Loop, while Hard Rock is looking at the proposed One Central development on the Near South Side.
The mayor’s proposal to charge the winner tens of millions is the latest hurdle to overcome in the city’s yearslong plans for a casino Lightfoot says could generate city tax revenue of $200 million annually and relieve taxpayers from big police and fire pension obligations.
Aldermen and residents in wards in or near the finalists’ sites have come out against a casino development in their back yards, and some officials have wondered whether they could revive the scrapped McCormick Place proposals.
Alderman Tom Tunney, of the 44th Ward and chairman of the Chicago Casino Committee, is aiming for the final selection within the next month, and to seek approval from the Illinois Gaming Board by the fall, the Chicago Tribune reported.
Community meetings for each of the three finalist sites yielded overwhelmingly negative comments.
Alderman Brendan Reilly of the 42nd Ward, which includes River North, objects to the Bally’s Tribune proposal adjacent to his ward, which includes River North. He cited an April survey by the River North Residents Association that found 86 percent of almost 2,000 respondents were opposed to the casino, according to the Tribune.
Reilly has also taken issue with news that the city only charged one $300,000 application fee to the Bally’s ownership group for both its proposals, including the dismissed one near the McCormick Place campus, while charging two distinct fees for the Rush Gaming Rivers proposals, one at each of the sites it eyed.
Lightfoot’s administration said the application fees were handled differently because Bally’s ownership group for each of its casino sites would have been the same, while the Rivers brand was going to be used by separate owners for the casino components at The 78 development by Related Midwest and the tossed McCormick Place proposal by another owner.
“We’re the only bidder that’s offering $25 million (to the city) upfront to build the project,” Bally’s CEO Soo Kim told the Tribune Friday. “We paid the fees that were asked. Don’t you think we would have sent another $300,000 if they asked us to?”
Kim has also said he plans to eliminate an option within the casino contract to buy out minority investors; the city has required at least 25 percent minority investment in the casino. Bally’s is a few weeks away from releasing its revised minority investment program, which has $200 million in commitments from more than 200 investors, the Tribune reported.
[Crain’s] – Sam Lounsberry
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