And then there were three.
Chicago Mayor Lori Lightfoot has narrowed down the city’s five proposals for its first casino to three finalists: Bally’s at the Chicago Tribune Publishing Center, Rivers at The 78 and Hard Rock at the proposed One Central megadevelopment, the city announced Tuesday.
The three remaining bids advanced by the city may represent the path of least resistance for a Chicago casino. But none has landed without some objections or concerns, which the city may have to confront before it whittles the group down to a single favored plan, which officials said will be by early summer. It would still need to win state approval.
Lightfoot said in a statement that her administration “spent countless hours analyzing each proposal for Chicago’s casino license” and determined the three finalists “best fit the core goals we want to achieve for the City’s first integrated casino-resort. Each proposal offers economic, employment, and equity-focused opportunities for Chicago, while simultaneously enhancing the City’s cultural, entertainment and architectural scenes with world-class amenities and design.”
Tuesday’s announcement takes the city “one step closer to bringing this decades-long project to fruition,” the mayor said.
The city passed on the two proposals 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 rejected proposals for what is expected to be Illinois’ largest gambling establishment include a $1.3 billion Rivers Chicago McCormick bid to redevelop Lakeside Center, which developers touted as an opportunity to repurpose and renovate the 50-year-old steel-and-glass exhibition hall. McCormick Place said it has 235 events scheduled there that could not be rescheduled without a replacement.
The city also turned down Bally’s proposal for a $1.6 billion casino at the McCormick Place Truck Marshaling Yards, a 28-acre freight staging area at 31st Street and Jean Baptiste Point DuSable Lake Shore Drive. The proposed site not only faced opposition from nearby Bronzeville residents, but was also committed to another developer by McCormick Place until 2023.
Bally’s remaining casino proposal involves an option to buy the 30-acre Freedom Center printing plant site in River West, which was acquired in 2019 by Dallas-based Nexstar Media Group as part of its $4.1 billion purchase of Tribune Media — the former broadcast parent of Tribune Publishing.
The $1.74 billion bid includes a casino and hotel, a 3,000-seat theater, an outdoor music venue and other amenities. It also involves demolishing the 41-year-old Freedom Center printing plant to make way for the casino.
Tribune Publishing’s lease at the Freedom Center runs through June 2023, with an option to renew for 10 years at market rates. That option now rests with hedge fund Alden Global Capital, which completed its $633 million acquisition of Tribune Publishing in May.
Chris Jewett, director of corporate development for Bally’s, said the Rhode Island-based casino company has secured an option to purchase the land from Nexstar.
“We continue to believe we have the strongest bid and we’re glad to be a finalist,” Jewett said in an emailed statement Tuesday. “From the beginning we have been site agnostic, and intentionally put forward two very different sites in order to allow the city to ultimately decide. Of the three finalists, we believe that the Tribune site is the most attractive and has the highest revenue generation potential for the city.”
If it ultimately wins approval, Bally’s plan would be to open a temporary casino on the site by the second quarter of 2023, with the permanent casino opening in the first quarter of 2026, according to the city.
In December, the River North Residents Association, a 22,000-member nonprofit neighborhood advocacy group, sent a letter to Ald. Walter Burnett, 27th, Ald. Brendan Reilly, 42nd, and Ald. Brian Hopkins, 2nd, expressing concern over the Bally’s Freedom Center proposal. The letter, which is posted on the group’s website, said noise, traffic congestion and crime would likely be exacerbated by the casino, “negatively impacting” home values and local businesses.
Chicago-based Rush Street Gaming, which owns four casinos including Rivers Casino Des Plaines, partnered with two developers on separate proposals, one of which is still in the game.
Rush Street Gaming, which is headed by Chicago real estate developer Neil Bluhm, is proposing a $1.62 billion riverfront casino at The 78, Related Midwest’s 62-acre megadevelopment slated for long-vacant land in the South Loop.
The proposal includes a riverfront plaza, an observation tower overlooking Roosevelt Road, a live entertainment venue, a 300-room hotel and docking for boats at the casino, which would anchor an entertainment district on the north end of the ambitious mixed-use development.
Earlier this month, The 78 Community Advisory Council, a group of “neighborhood representatives, community leaders, design professionals and subject-matter experts” appointed by Lightfoot, held a virtual meeting to release the results of a survey it conducted about the proposed casino.
The survey found that 78% of nearly 400 area respondents were “unsupportive” of the proposed casino at The 78, citing concerns about crime, traffic and the character of the broader development.
“We are thrilled that Rivers 78 is a finalist as the City of Chicago makes this historic decision,” the development team behind the proposed Rivers 78 casino said in an emailed statement. “We have a strong track record of working closely with the communities surrounding The 78 to build an inclusive destination that benefits all, and we look forward to building on these longstanding partnerships.”
Rivers’ plan includes opening a temporary casino in the second quarter of 2024, and the permanent casino in the fourth quarter of 2025, according to the city.
Florida-based Hard Rock International operates more than a dozen casinos, including the recently opened Hard Rock Casino Rockford, which received approval from the Illinois Gaming Board in February to build a permanent casino on the site of the former Clock Tower Resort.
In Chicago, Hard Rock is proposing 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 proposal includes a 3,500-seat live entertainment venue, a 500-room hotel and other amenities.
While Landmark Development’s proposed $20 billion One Central megadevelopment may still need $6.5 billion in state funding to get off the ground, the city said Tuesday that the Hard Rock Chicago can proceed independently from the broader development.
“The Hard Rock proposal proposes a phase one where the remainder of One Central does not need to move forward,” said Jennie Bennett, the city’s chief financial officer. “It’s not contingent on state funding.”
Another potential hurdle for Hard Rock is the proposed use of the North Building at McCormick Place as a temporary facility. MPEA said using the North Building is “not feasible” due to its upcoming scheduled events.
Bennett said Tuesday that Hard Rock is “amenable to looking at an alternative temporary facility” that wasn’t within the MPEA campus.
“We’re excited about the prospect of creating a new entertainment destination for the city of Chicago, and we’re humbled to be chosen for the next phase of the selection process,” Hard Rock said in an emailed statement. “We look forward to a robust dialogue with city leaders about Hard Rock Chicago and what we bring to the table. Chicago is a global city that deserves a global operator.”
Hard Rock expects that a temporary casino would open in second quarter of 2023, and the company would plan to open the permanent casino by the third quarter of 2025, according to the city.
A Chicago casino has the potential to boost 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 the five proposals 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 won’t be met as the city plans to host a series of community forums, giving Lightfoot more time to unveil her choice to the public. Once that happens, Lightfoot will submit a finalist to the City Council for aldermen’s approval.
If a majority of aldermen give Lightfoot’s preferred choice the thumbs-up, it will then head to the state gaming board for an up-or-down vote on whether to award a license to the developer of a Chicago casino.
The city’s so-called “community engagement meetings” are scheduled for three consecutive nights next month, where the public can ask questions and weigh in on the proposals. The Hard Rock meeting is scheduled for April 5 at Harold Washington Library; Bally’s will be at the Tribune Publishing plant on April 6; and the Rivers 78 meeting will be at the Isadore and Sadie Dorin Forum on April 7. The meetings are scheduled from 6 to 8 p.m., will be limited to 300 attendees each and will also be livestreamed, the city said.
The Chicago casino would be the largest in the state, with a capacity of 4,000 gaming positions — twice those allowed at any other casino in Illinois. It would also carry with it the highest casino tax rate in the state at about 40% of adjusted gross revenue.
At $800 million in adjusted gross revenue, the state would receive about $166 million and Chicago $144 million in annual casino tax revenue, according to a projection by Eric Noggle, a senior analyst with the state’s Commission on Government Forecasting and Accountability.
In addition to projected tax revenue, the city will consider a variety of other factors, including an Illinois Gaming Board target of securing at least 25% minority investment in the casino. The city has also set its own goal of 26% minority participation in the design and construction of the casino.