Chicago’s casino selection goes to Bally’s, and these real estate players win out

Bally’s wins over mayor and will head to the full City Council

Chicago /
May.May 05, 2022 10:28 AM
Alderman Walter Burnett, Bally's Soo Kim and Chicago mayor Lori Lightfoot (Getty Images, Burnett, Bally's, Wikimedia Commons, Illustration by Kevin Cifuentes for The Real Deal)

Alderman Walter Burnett, Bally’s Soo Kim and Chicago mayor Lori Lightfoot (Getty Images, Burnett, Bally’s, Wikimedia Commons, Illustration by Kevin Cifuentes for The Real Deal)

UPDATE May 5, 2022, 1:09 p.m.: Chicago Mayor Lori Lightfoot selected Bally’s bid to develop a $1.7 billion casino project on the Chicago Tribune Publishing Center in River West. Bally’s proposal, which was seen as a frontrunner throughout the selection process, would bring a massive entertainment center and hotel to the 30-acre newspaper printing site.

Bally’s proposal “best met the city’s core goals and would help us develop a casino-anchored resort complex that matches our thriving cultural scene,” Lightfoot said.

The decision is good news for the city’s revenue – and particularly for developers like Shapack Partners and Onni Group that have already bought up nearby properties.

With the selection of the plan came plenty of parties that stand to benefit from the deal beyond the city and Bally’s.

Perhaps the greatest of those is Dallas-based Nexstar Media Group, owner of Tribune Media, the former broadcast group affiliated with Tribune Publishing. Rhode Island-based Bally’s has an option to buy the 30-acre Freedom Center printing plant site from Nexstar for an undisclosed amount.

“There is flexibility in how (Bally’s) would like to develop the other parcels within this planned development,” Lightfoot said.

Chicago developer Shapack Partners and Vancouver-based Onni Group also stand to prosper from the deal, with both firms purchasing prominent properties near the development site in deals revealed this week.

Rendering of new Bally's casino (Bally's)

Rendering of new Bally’s casino (Bally’s)

Onni Group is completing a deal to buy a seven-acre property at 700 West Chicago Avenue from a joint venture of Nexstar and Riverside Investment & Development. Onni is also responsible for the 2.7 million-square-foot Halsted Point complex, just north of the new site. Shapack is buying the Salvation Army’s former property for $25 million with intentions to redevelop it as a hotel, people familiar with his plans told Crain’s this week.

Bally’s planned to eventually demolish the plant to make room for the casino and the company had previously said it would use Onni’s recently purchased property at 700 West Chicago Avenue — a former Tribune advertising insertion plant that closed down in 2012 — as a temporary casino while Bally’s built its permanent one. That plan is now off the table, as the city said the Medinah Temple at 600 North Wabash Avenue in River North will host the temporary casino while Bally’s permanent facility is under construction to the west. Last year Nexstar and Riverside Investment & Development abandoned plans to build a 1.2 million-square-foot office and apartment tower on the West Chicago Avenue site Onni is grabbing.

Temporary location at 700 West Chicago Avenue (Bally's)

Temporary location at 700 West Chicago Avenue (Bally’s)

Bally’s planned to eventually demolish the plant to make room for the casino and the company had previously said it would use Onni’s recently purchased property at 700 West Chicago Avenue —a former Tribune advertising insertion plant that closed down in 2012 — as a temporary casino while Bally’s built its permanent one. Nexstar and Riverside Investment & Development abandoned plans to build a 1.2 million-square-foot office and apartment tower in April 2021. It’s unclear how the Onni Group deal will affect Bally’s use of the warehouse.

There are also some notable losers. The decision could be the final nail in the coffin for anyone who thought the Chicago Bears would stay downtown, not to mention local residents put off by the prospect of a mini Las Vegas sprouting next to their homes.

If the city had chosen the Hard Rock One Central site adjacent to Soldier Field, the revival of the area would have given the Bears reason to reconsider relocating to Arlington Heights.

The Hard Rock proposal included a casino in the One Central development that would be built over Metra rail tracks next to Du Sable Lake Shore Drive near 18th Street. The One Central Development is a mixed-use project from Landmark Development that would redevelop 32 acres of rail yards between the McCormick Place Convention Center and the Museum Campus on the Near South Side.

Residents in River West have generally objected to the use of the site for a casino, citing the possibility of increased crime, and traffic and the likelihood that the project would lower property values, according to the Chicago Tribune.

Two aldermen whose wards are adjacent to the Bally’s site oppose the proposal, and many residents in the area have expressed dissatisfaction at the site. Walter Burnett, the alderman representing the 27th ward where the site is located, however, has indicated that he would support the project in the name of generating tax revenue, according to Crain’s.

Approval from the full City Council would be the next step, and the decision will probably be contentious. Yet Lightfoot’s office has characterized it as a major financial victory for the city in the form of $200 million in annual revenue that will go toward funding strapped city police and firefighter pensions. Plus, Bally’s has offered to pay the city $25 million up front, and the mayor has asked casino bidders including Bally’s to be prepared to pay $75 million up front. Local officials want to file an application to the Illinois Gaming Board for approval no later than this fall.

If the project proceeds, it would mark a milestone for Chicago, where a casino development has been kicked around and viewed as a potential financial savior by city leaders for decades, but never gained serious traction until 2020.

That’s when Governor JB Pritzker signed a gaming package into law that paved the way for a Chicago casino by reworking existing tax structures. Attempts to lure a casino developer last decade yielded no viable proposals because of what was viewed as an overly burdensome tax structure.

“We were able to finally put the gears in motion and bring this day to reality,” Lightfood said.








      UPDATE: Adds change of plans for temporary casino starting in 10th paragraph.


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