Emanuel defends long-shot plan to save Lucas Museum

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A rendering of the proposed new design for the Lucas Museum of Narrative Art, in which the museum would take the place of the current McCormick Place East convention center building. | Provided

Mayor Rahm Emanuel on Tuesday defended his long-shot plan to convince a stalemated Illinois General Assembly to raise five tourism taxes and authorize $1.2 billion in McCormick Place borrowing to let movie mogul George Lucas build his lakefront museum by demolishing and replacing McCormick Place East.

“Neither Vegas, Orlando nor New York are resting on their laurels. They are investing in their future to compete for the same business we’re competing for. And the question is, are we going to have the confidence in Chicago’s future and be willing to invest in the future and to compete against Orlando and Vegas,” Emanuel said.

The mayor noted that Lucas is willing to “donate $750 million of his money to Chicago’s future” to create a museum that will drive tourism for years to come, in the same way that President Barack Obama’s presidential library will someday draw visitors from around the world to either Washington or Jackson parks.

Chicago would be foolish to look a gift horse in the mouth, particularly when the tax increases that would be required to replace McCormick Place East would fall on visitors, not local taxpayers, the mayor said.

RELATED: Analysis: Lucas Museum push offers ammo for Emanuel’s critics Bid to save Lucas Museum relies on complex financing plan

“You can either invest in the future and grow and create jobs and economic growth or, if you’re stagnant, you’ll see other cities like Orlando, like New York City, like Las Vegas, like Los Angeles pass you by,” the mayor said.

“I don’t think Chicago should allow them to beat us. We finally secured this great museum when San Francisco coughed up their future…It would be a mistake not to invest in our future grow our economy, grow our educational and cultural attractions so people continue from around the world and around the U.S. to come to Chicago. And we do it by making sure that people who visit us pay for that future.”

At a time when the marathon state budget stalemate has cut off funding to vital social services, state universities and college scholarships to needy students, Emanuel wants to spend political capital greatly diminished by his handling of the Laquan McDonald shooting video to keep the Lucas museum in Chicago.

He not only wants the Illinois General Assembly to authorize $1.2 billion in new borrowing for a Metropolitan Pier and Exposition Authority that maxed out its credit card

to build a new hotel and a basketball arena for DePaul University that would double as an “event center” for McCormick Place.

He wants the legislature to raise five tourism taxes: two of the levies — of 2 percent and 2.5 percent, respectively — now apply to Chicago hotel rooms. The other taxes are on restaurants, rental cars and ground transportation at O’Hare and Midway airports. All of those taxes were used to bankroll previous McCormick Place expansions.

Two of those tax hikes would be on Chicago hotel rooms now taxed at a rate of 17.4 percent, thanks to County Board President Toni Preckwinkle’s decision to tack on an additional 1 percent.

That’s compared to 12 percent for Las Vegas and 12.5 percent for Orlando, Chicago’s two biggest rivals for convention business.

One of those hotel tax hikes — the 2 percent that financed construction of U.S. Cellular Field — is supposed to expire in 2033 when stadium bonds are paid off.

Instead, the mayor wants to transfer that increase from the Illinois Sports Facilities Authority to McPier and extend the levy until 2066 to be paid by future generations.

“What pays it is a hotel tax, which is visitors that come to the city of Chicago. It’s fees that already exist — not new taxes. … That’s a hotel tax that people who come to and visit the city — not people in the city that live here — then pay so we can invest in the future. And it’s by investing in the future that you grow your economy,” the mayor said.

On Tuesday, Democratic legislative leaders were still being briefed on the complex financing deal and waiting to see whether Gov. Bruce Rauner would turn thumbs-down or use the latest request on Emanuel’s wish-list as a giant bargaining chip.

That’s precisely what Rauner has done with a bill now on his desk that would give Chicago 15 more years to ramp up to 90-percent funding of the police and fire pension funds.

The city had to borrow $220 million to cover a shortfall caused by Emanuel’s assumption that his old friend Rauner would sign that bill. Rauner is refusing to sign it unless it is part of a deal that includes the governor’s pro-business, anti-union reforms.

That gave Emanuel an opening to make his pitch to a legislature that he desperately needs to bail out Chicago Public Schools, in part by overhauling a school aid formula that, the mayor claims, penalizes school districts dominated by students from impoverished homes.

“While Springfield has its challenges, those challenges should not inhibit the ability to grow the cultural, educational, business and economic future of the city of Chicago. One of the largest employers in the city is the convention and hospitality industry,” the mayor said.

“It’s not the state. What you’re having is a philanthropic gift by George Lucas and Mellody Hobson. Second is the ability for McCormick Place to also invest in that future supported by visitors that come to the city. That’s people that pay the hotel tax. These are the type of investments that build the city that made it a dominant player….And I think the state of Illinois will see this investment. Remember, just building it creates close to 8,000 to 10,000 jobs. And business travelers and people who will come because of the museum. That is an investment in the future that creates jobs and economic growth.”

While his top aides were briefing reporters on the complex financing plan, Emanuel was insisting: “There’s going to be no change in the sense that [there will be] no taxpayers’ support for this effort.”

The mayor can say that he’s holding fast to that promise, only because the five tax increases he wants to extend would be used to expand McCormick Place. Never mind that the expansion would not be necessary if he wasn’t planning to tear down McCormick Place East to make way for the Lucas Museum.

The Chicago Sun-Times reported exclusively last week that McCormick Place East — denounced by former Mayor Richard M. Daley as a “Berlin Wall” along the lakefront that destroyed the Chicago skyline — would be demolished to make way for the Lucas Museum and 12 new acres of lakefront park space, under a mayoral compromise in the works.

The Lucas Museum would be built on the south end of the site in a space that currently includes Arie Crown Theater. Underground parking for 2,000 vehicles as well as subterranean storage, heating and cooling systems would remain, reducing the overall cost to Lucas.

Emanuel views the McCormick Place plan as the only hope to keep the Lucas Museum in Chicago.

The mayor’s original plan to give the Star Wars creator 17 acres of lakefront land near Soldier Field has been embroiled in a legal challenge filed by Friends of the Parks.

The lawsuit was kept alive by a federal judge who has made it clear he sympathizes with the group’s central argument: that a 99-year lease “effectively surrenders control” of prime lakefront property to a museum that is “not for the benefit of the public,” but would “promote private and/or commercial interests.”

Deputy Mayor Steve Koch said he remains confident the city would ultimately win the case on appeal. But, Chicago businesswoman Mellody Hobson, the movie mogul’s wife, has made it clear that her husband is not prepared to wait years to begin construction of the legacy project.

He would sooner accept an offer from Los Angeles or his hometown of San Francisco.

Although the same legal issues could be raised about that site, Koch and McCormick Place CEO Lori Healey are hoping that, by removing an eyesore of a building and opening up twelve new acres of green space, they can negotiate a settlement with Friends of the Park that averts a legal challenge.

On Tuesday, attorneys for the city and Friends of the Parks had been set to appear in court to discuss the park advocates’ lawsuit.

But U.S. District Judge John W. Darrah postponed that hearing Monday for the second time in two weeks. They are next scheduled to appear May 3.

Friends of the Park Board Chair Lauren Moltz and Executive Director Juanita Irizarry did not return repeated phone calls. City Hall views that silence as a good sign. It means they’re still considering what Koch and Healey hope is an offer that Friends of the Parks cannot refuse.

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