Mayor Lori Lightfoot places bet on Bally's plan for River West casino, but more hurdles remain
CHICAGO (CBS) -- Mayor Lori Lightfoot has picked Bally's Corporation's $1.74 billion plan for a casino at the Chicago Tribune Freedom Center in River West as her choice for Chicago's first gambling complex.
"A city casino signals to the world that our economy is on a strong path towards recovery, ready to develop new and lucrative projects that will benefit all of our residents. It will also serve as a catalyst for additional large-scale economic developments that will only accelerate our city's post-pandemic recovery, which by the way is well underway," Lightfoot said at an announcement Thursday morning. "So many people, so many industry sectors, so many labor unions, and others will directly benefit from this historic investment."
The mayor's pick still requires approval by the City Council, and needs the Illinois Gaming Board to approve a casino license for Bally's.
A special City Council committee formed to review the mayor's choice for a casino is slated to hold a public meeting on the Bally's proposal on Monday, although no committee vote has yet been scheduled. A town hall meeting also has been scheduled for May 12 at the UIC Forum, from 7 p.m. to 9 p.m., for members of the public to learn more about the project. You can register online to attend in person, and the event will be streamed at chicago.gov/live
Lightfoot is counting on the city's first casino to help shore up the city's underfunded police and firefighter pension systems, with approximately $200 million in annual tax revenue.
Another $200 million in annual tax revenue would go to the state.
The project also is expected to be a boon for the city's economy, by bringing in new tourism revenue, while creating an estimated 3,000 construction jobs and 3,000 permanent jobs at the proposed casino resort, which would include the casino, hotel, and more. Bally's has promised 60% minority hiring.
"A city casino also allows us to capitalize on gaming and other revenues, which will provide much-needed new and dedicated funding sources for our police and fire pension funds, and capture the gaming revenue that has been lost for far too long to neighboring jurisdictions, including Indiana," Lightfoot said. "I want those line of Illinois license plates, that are queued up going to casinos in Indiana, to be coming right here."
According to the mayor's office, Bally's has completed an agreement with the city's labor unions regarding the various casino jobs, which the mayor and aldermen have said would be necessary for the casino project to move forward.
"This new casino will be built by the hardworking men and women in the city of Chicago, the skilled labor that we bring to our developers and our contractors," said Gary Perinar, executive secretary-treasurer of the Mid-America Carpenters Regional Council, which represents thousands of union carpenters in Chicago.
Bally's proposal calls for a $1.74 billion casino at the 30-acre Chicago Tribune Freedom Center publishing plant along the Chicago River near Halsted and Ohio streets.
The site would include 3,400 slot machines and 173 table games; a 500-room hotel; several locally-owned restaurants and cafés, as well as a food hall; three bars and lounges; a 3,000-seat theater; an extension of the city's Riverwalk, along with a 70,000-square-foot riverfront entertainment venue; 20,000 square feet of exhibition space; a sports museum; and an outdoor/rooftop space with bars, lounges, and pools.
"I have no doubt that the Bally's project, once completed, will be the world-class casino that we've all envisioned, that we've all dreamed about, and that this city deserves," Lightfoot said.
The Chicago Tribune prints its newspapers – and some competitors' newspapers – at the Freedom Center, but its lease at the site runs out in June 2023, with an option to renew for 10 years. But Bally's also holds an option to purchase the site.
The Bally's bid for this site includes a temporary facility at the Medinah Temple in the River North neighborhood. Originally, Bally's had planned that temporary casino at a site adjacent to the Freedom Center by retrofitting an existing building, but city officials said the Medinah Temple was chosen instead due to its proximity to mass transit, and existing retail and hospitality corridors.
The Medinah Temple was built in 1912 for the Masonic Order of the Mystic Shrine on Wabash Avenue – then called Cass Street – between Ontario and Ohio streets. The ornate Moorish revival building originally housed a 4,200-seat auditorium that over the decades featured events such as the annual Shrine Circus, Chicago Symphony Orchestra recordings, concerts featuring A-listers, and live performances of the radio show "A Prairie Home Companion" with Garrison Keillor. The auditorium featured a 92-rank Austin pipe organ.
In 2001, the Medinah Temple and neighboring Tree Studios artists' residence were redeveloped, and in 2003, a Bloomingdale's Home and Furniture store opened in the Medinah Temple building. The Bloomingdale's store closed in 2020 and the building is now vacant.
As CBS 2's Marissa Perlman reported, the choice to house the temporary casino at Medinah Temple if the mayor's plan is approved is a big victory for its current owner, Friedman Properties.
River North developer Albert Friedman donated $600,000 to Mayor Lightfoot's campaign the same day she narrowed casino bids from five to three.
But with the Medinah Temple being right next to the Grand Avenue CTA Red Line stop, neighbors say they worry a casino there will just add to River North crime – which is already seeing a major spike.
"It is unimaginable that adding a casino is going to make that better somehow," said Brian Israel, president of the River North Residents Association.
According to a city evaluation report, Bally's expects to open the temporary casino at Medinah Temple in the second quarter of 2023, with the permanent casino likely to open by the first quarter of 2026.
While Ald. Walter Burnett (27th), whose ward includes the Freedom Center site, has not been enthusiastic about building a casino there, he has said he supports the project in order to avoid a significant property tax increase that would be needed to help fund police and fire pensions without the casino money.
"I would rather not have a casino, period, but I know we have to, because we need to deal with our pension funds, and we need to not have to raise property taxes," he said.
Burnett, who grew up in the nearby Cabrini Green public housing complex, said the city can't be afraid of progress, pointing specifically to the city's decision to begin demolishing that housing complex in the late 1990s to make way for a major redevelopment of the neighborhood.
"When we had to tear down the former Cabrini Green high rises over in the area, I wasn't afraid. Because I wasn't afraid, all of the people who live over there now live over there now, because before that they wouldn't even come to that area. So we helped all of them to prosper in that community, and be able to live in the luxuries that they live in now, and that's because we weren't afraid," he said. "In this instance, I'm not afraid. I'm not afraid to have this casino to be built in our ward, that's going to help our police and our firemen. They put their lives on the line for us every day."
John Bosca, with the community group Neighbors of River West, echoed Burnett in saying residents shouldn't be scared about the potential impact of a casino, saying he trusts Burnett after working together for the 27 years Burnett has been in office.
"Chicago is a big small town. We all know each other. We all work with each other. What's most important though is to be able to trust each other," he said.
Meanwhile, those who work in a recovering hospitality industry say they are the real winners. Union leaders say 3,000 permanent casino jobs will help the industry post-pandemic.
"In hospitality, too many of our good union jobs have disappeared," said Karen Kent, President of UNITE HERE Local 1.
That is on top of 1,000 annual construction jobs to build the new casino.
"We are fortunate to have a labor movement that believes in lifting all boats, and that leaves no one behind," Kent said.
However, two neighboring aldermen – Brendan Reilly (42nd) and Brian Hopkins (2nd) – have said their constituents are overwhelmingly opposed to a casino in the area.
In a tweet Thursday morning, Reilly blasted the mayor's selection process, saying aldermen were told they would have more input in choosing the casino finalist.
"We were also told the Council's Special Casino Committee would hold more hearings, gather more testimony and ask more tough questions to determine what is in Chicago's best interest. The process was flawed from Day One but now that process is being thrown out the window entirely," he wrote. "We need a casino. We don't necessarily need THIS casino. Tired of these false, zero-sum choices that Chicago mayors have been setting up for decades. Sorry but "take it or leave it" is not the hallmark of a deliberative process."
We need a casino. We don’t necessarily need THIS casino. Tired of these false, zero-sum choices that Chicago mayors have been setting up for decades. Sorry but “take it or leave it” is not the hallmark of a deliberative process.
— Brendan Reilly (@AldReilly) May 5, 2022
Some members of the City Council have said the approval process for the casino is moving way too fast, with others saying they and the community are being excluded from what may be one of the largest projects in city history.
Lightfoot said aldermen have had ample opportunity to weigh in on the casino proposals since they were first unveiled in November, including at community meetings organized for each bid, and multiple closed-door briefings with the mayor's team.
The mayor said the special casino committee will hold another hearing on Monday, preceded by further briefings on Thursday and Friday.
"The point is that the City Council has to be intimately involved in this decision, and as you know, the committee is composed of every committee chair and every vice chair. I think it's three-quarters of the City Council that is formally sitting in the committee," she said. "We believe in legislation, we believe in democracy, and this is something that the City Council has to be intimately involved in, and they have been."
It's unclear when the Bally's bid will face its first vote, as Monday's hearing is slated to be a subject matter hearing, where no vote will be taken.
Lightfoot said she is "not concerned at all" about Hopkins' and Reilly's opposition to the Bally's proposal, and said she's confident the City Council will ultimately approve the plan.
"We have and we will continue to engage with City Council members. There are going to be some that vote no, and that's how the world turns, but I'm more than confident that we will have a good solid majority that says yes; that says yes to our residents, that says yes to economic development, and as Alderman Burnett said, aren't afraid," she said.
Burnett also predicted the plan will be passed by the City Council, though he wouldn't speculate how close the vote might be.
"I expect that everybody's going to take their rightful responsibility to deal with the fiscal challenges that we have with the pension funds for the police and firemen, and not allow the city to have to raise property taxes," he said. "I think it's going to be a majority is going to vote for it."
Bally's was one of three finalists for the casino complex, after a total of five bids were submitted to the city in November. The other two finalists were from Rush Street Gaming, for a Rivers Casino in the new development project known as The 78 near the South Loop and Chinatown; and a Hard Rock proposal to build a casino over train tracks in the proposed One Central development near Soldier Field.
Those other finalists were vehemently opposed by the aldermen in whose wards they would have been located.
Lightfoot pushed back against critics of the selection process, suggesting they were upset because they might have supported one of the other finalists.
"Some of what you're hearing is people who've staked their allegiance with proposals that didn't make it through the finalists. It's typical of folks that weren't successful to attack the process," she said.
At the special casino committee's only hearing on the casino bids so far, some aldermen indicated they preferred a casino be built at McCormick Place, but the mayor's evaluation committee eliminated two bids at or near McCormick Place from the five proposals when narrowing the list down to three finalists earlier this year.
Bally's was the only casino finalist to offer an upfront payment to the city as part of their bid, a $25 million payment to the city. According to the mayor's office, that initial offer has been increased to a $40 million upfront payment, and an annual $4 million payment thereafter.
Many residents in River West have pushed back against a casino in the neighborhood, raising concerns of traffic congestion, noise, and crime.
"We are not confident that Bally's has the experience and the expertise to carry this off," the River North Residents Association's Israel told CBS 2's Jermont Terry on Wednesday.
Israel doesn't just question the capital Bally's has to complete the deal. He believes the entire process hasn't been forthcoming as originally presented.
"We're also concerned about the fact that the City Council seems to have been cut out of the process or not fully engaged with many important decisions along this path," Israel said. "We think the executive and legislative branch should be working together on this, and it shouldn't be just a fiat from the Mayor's office."
For her part, Mayor Lightfoot said earlier this week, "We've tried to be as transparent as we possible could be with a number of rounds of engagement, winnowing he field to three finalists."
Meantime, the mayor also said the city and Bally's both are looking at providing increased funding for gambling addiction services as part of the casino project.
"Gaming addiction is real, and we are absolutely mindful of it. We provide supports now, and will continue to provide supports in the future, and I know Bally's understands that concern, and shares our values in making sure that we provide services for those for whom gambling addiction is very real," she said.