A gambling complex in Chicago’s River West is now officially Mayor Lori Lightfoot’s pick for the city’s long-awaited casino license — an endeavor that could boost Chicago’s finances, factor into the coming mayoral election and transform the neighborhood.
Lightfoot chose to advance a $1.74 billion casino, hotel and entertainment development at what is now the Chicago Tribune’s Freedom Center printing plant. Rhode Island-based Bally’s, which owns and manages 14 casinos in 10 states, hopes to make this one the flagship of its chain.
Though many hurdles remain before anyone will be betting at blackjack tables along Grand Avenue, a deal for the mayor to land a casino in Chicago represents the fulfillment of one of her goals as she heads into an expected reelection bid.
A visibly jubilant Lightfoot took a victory lap at the announcement, noting former mayors tried for decades to get a casino. Mayor Richard M. Daley tried several times to get a Chicago casino, Lightfoot said, but the state legislature had “no appetite” to help the city.
“We got this done,” Lightfoot said.
The casino, Lightfoot said, sends a signal of Chicago’s ongoing economic recovery after it was battered by COVID-19 and civil unrest. And, she said, it’s a better alternative than residents going to Indiana to gamble.
“With due respect to the Hoosiers, Chicago money must be spent in Chicago,” Lightfoot said.
Bally’s succeeded for a variety of reasons, Lightfoot said, including that they don’t have a competing casino in the Chicagoland region and reached a labor peace agreement with the Chicago Federal of Labor.
“We are confident that Bally’s Tribune Publishing Center development will shore up the city’s pension funds, create thousands of good-paying jobs, and lead to a bright financial future for our city,” she said in a news release, asserting the plan will generate 3,000 annual construction jobs and 3,000 permanent casino jobs.
The complex will include an exhibition hall, 500-room hotel, a 3,000-seat theater, an outdoor music venue, six restaurants and, for gambling, 3,400 slots and 170 game tables, Lightfoot announced.
But she and developers still have to persuade a majority of aldermen, the Illinois Gaming Board and wary neighbors before the deal is done.
If approved, Bally’s aims to open a temporary casino by the second quarter of 2023 — the city says that will be located downtown at the landmark Medinah Temple building — with the permanent casino slated to open in the first quarter of 2026. Several speakers representing labor and other interests talked of how the project could provide a sorely needed post-COVID-19 boost to the city, particularly in the hospitality sector, where the pandemic’s impact has been severe.
The City Council approval process could be bumpy. Some aldermen are likely to complain that they didn’t get more say in selecting the winning bidder. Others might balk due to distaste for gambling or concern about traffic. But Lightfoot will argue that the casino makes big tax hikes less likely in the future, a message that should appeal to aldermen who dislike nothing more than property tax increases.
Soo Kim, the 47-year-old chairman of Bally’s and founding partner of New York hedge fund Standard General, the casino company’s largest shareholders, was on hand for the announcement Thursday. He welcomed the news, but acknowledged the challenges ahead.
“We understand all of the promises that this casino allows the city of Chicago to keep and the state of Illinois, and we accept and bear those responsibilities,” Kim said. “We’re excited for the future. And understand that this is really just the first step. Now we need to go and make our case before the City Council.”
Kim, who noted he was in high school when Chicago took its first unsuccessful run at landing a casino in 1992, soon after Illinois legalized riverboat gambling in the state, paid homage to the significance of the city’s 30-year quest, while relishing the opportunity to grow his gambling company.
“We’re really excited about the economic prospects for us, Bally’s Corporation,” Kim said. ” I think we’re going to do well.”
In March, Lightfoot narrowed down five proposals to three finalists: Bally’s at the Chicago Tribune Publishing Center, Rivers at The 78 in the South Loop and Hard Rock at the proposed One Central development on the Near South Side.
The city passed on separate proposals by Bally’s and Rivers involving the McCormick Place campus after the Metropolitan Pier and Exposition Authority, which owns the convention center complex, said it was not interested in transforming any of its facilities into a casino.
The two rival finalists ceded to Bally’s winning hand Thursday.
Florida-based Hard Rock International, which operates more than a dozen casinos, including the recently opened Hard Rock Casino Rockford, proposed a $1.74 billion casino at One Central, a massive mixed-use project developers hope to build over train tracks west of Soldier Field.
“The Hard Rock brand is currently expanding its portfolio of casinos, hotels and cafes in 72 different markets around the world,” a Hard Rock spokesperson said in a statement Thursday. “We were honored to have been named a finalist for the Chicago casino.”
Chicago-based Rush Street Gaming, which owns four casinos including Rivers Casino Des Plaines, proposed a $1.62 billion riverfront casino at The 78, Related Midwest’s 62-acre megadevelopment slated for long-vacant land in the South Loop.
“We believe in the future of Chicago and we wish the city and Bally’s every success,” a spokesperson for the Rivers 78 development team said in a statement.
Even though it will draw some opposition, a Chicago casino has the potential to help the city’s long-troubled finances and give Lightfoot a major political victory as she heads into her reelection campaign. As mayor, Lightfoot has struggled to promote her legislative agenda in Springfield, with the casino bill being a critical exception.
In 2020, Lightfoot successfully pushed lawmakers to authorize a Chicago casino, giving her a win that had eluded mayors for decades. Lightfoot also succeeded in her efforts to get the tax structure changed so as to make a casino more attractive for potential bidders. Even with those changes, the city struggled to attract interest from heavy hitters in the gambling industry but three firms submitted five bids for the city to consider.
After unveiling five competing casino bids last year, Lightfoot said she wanted to “get a finalist to recommend to the (Illinois Gaming Board) by sometime in the first quarter of next year.” That goal wasn’t met as the city announced plans to host a series of community forums, giving Lightfoot more time to unveil her choice to the public.
If a majority of aldermen give Lightfoot’s preferred choice the thumbs-up, it will then head to the state gambling board for an up-or-down vote on whether to award a license to the developer. The city hopes to use casino funds to shore up pension-related budget holes, a point she’s likely to reiterate throughout the process.
Asked about the City Council special committee she created to handle casino issues, which has only met once and had minimal input, Lightfoot said its goal was to keep aldermen closely involved in the process. She also rebutted criticism that the process has moved too fast, saying “there’s nothing about this that has moved quickly.”
“Some of what you’re hearing is people who’ve staked their allegiance with proposals that didn’t make it through the finalists,” Lightfoot said. “It’s typical of folks that weren’t successful to attack the process.”
Downtown Ald. Brendan Reilly responded to Lightfoot’s criticism on Twitter.
“Get used to that talking point: ‘opponents had their favorite bidders (and) this is sour grapes,’ ” Reilly tweeted. “That’s definitely not the case with me: all three of the final locations were flawed, the process too amorphous (and) I do not care who operates the damned thing. But location matters a lot.”
Bally’s had planned to use a former Tribune Publishing warehouse at 700 W. Chicago Ave. as its temporary casino while Freedom Center is demolished and the permanent facility is built, but the city pushed for Medinah Temple as an alternative, sources said.
The casino company has an option to buy the 30-acre site Freedom Center from Dallas-based Nexstar Media Group, which acquired it in 2019 as part of its $4.1 billion purchase of Tribune Media — the former broadcast parent of Tribune Publishing.
The Bally’s plan requires demolishing the 41-year-old plant and relocating the Tribune printing operations to make way for building the permanent casino.
“We have seen the mayor’s announcement and will be working with all the parties to find a solution that works for everyone,” Par Ridder, general manager of the Chicago Tribune, said in an email Thursday.
But before that can happen, city leaders will likely face stiff opposition from some neighbors in an area that in recent decades has seen other industrial spaces and parking lots supplanted by residential developments.
Ald. Walter Burnett, whose ward will host the project, took the criticism head-on at Thursday’s new conference, saying it would be irresponsible not to support the casino because otherwise would lead to higher property taxes.
Yet members of the River North Residents Association have been heavily engaged in the casino selection process, attending meetings, talking to the press, issuing public statements and conducting a public survey all with the same message — the Bally’s casino, hotel and entertainment complex is not the right fit for River West.
“The game is not over yet,” said Brian Israel, president of the residents association, adding that this is just one step in a longer process, and the group will lobby the council to reject the plan.
“Chicago is a great American city,” Israel said. “And we think it can do better than this.”
He said the association is disappointed at the lack of transparency and the short time frame of the selection process, and said the mayor’s office should be working with City Council members more as they make decisions about the casino proposal.
“We think that the development that’s been proposed is the wrong project for this site. Our organization is definitely not anti-development,” Israel said. “We have been working for 25 years with many, many developers and the city to review and recommend changes to dozens of developments throughout the area, and we always want development to be done in a way that enhances the community and considers its impact on all of the stakeholders. But unfortunately that really can’t be said about this project.”
Alan Miretzky, a River North resident for about 12 years who lives close to where the casino would be built, said he doesn’t understand why the Bally’s location is the front-runner, when other finalists’ proposals would seem to have a lesser impact on residential areas.
”Frankly, I’m appalled by it,” Miretzky said. “We didn’t sign up for that when we moved in here.”
Traffic in the area, just one of Miretzky’s concerns, is “already horrendous … so this is going to make it even worse,” he said.
Backers say transportation and other neighborhood concerns will be addressed.
And among the biggest backers at the news conference were representatives of organized labor. In addition to securing a labor peace agreement with Chicago unions, a city-mandated prerequisite for building and operating the casino, Bally’s checked off two other key boxes to get the mayor’s endorsement.
The city, which is banking on a casino to generate $200 million in annual tax revenue to plug its public pension funding holes, plans to submit its choice to the Illinois Gaming Board for approval in time to include upfront payments from Bally’s in the 2023 fiscal budget this fall.
Bally’s has increased its upfront payment to the city from $25 million to $40 million, according to a news release Thursday.
The city has also reiterated the importance of an equity component requiring at least 25% minority investment in the casino. Bally’s was initially criticized for a proposed call option allowing the casino to buy out the minority shareholders after six years.
Bally’s has since eliminated the call option — at the insistence of the city — and tweaked its minority investment program to encourage broader participation through a crowdfunding initiative.