THE WATCHDOGS: Navy Pier's largesse — big bonuses as attendance falls, remake is delayed

Navy Pier’s big makeover is more than a year behind schedule. Attendance has fallen. But top executives still took home big bonuses, newly released records show.

Nine Navy Pier Inc. executives were given bonuses totaling nearly $350,000 in 2013, according to the latest report to the Internal Revenue Service filed by Navy Pier Inc., the private organization that runs the government-owned tourist attraction.

The biggest bonus — $75,000 — went to Marilynn Kelly Gardner, whose compensation as chief executive officer totaled $367,876.

Marilynn Kelly Gardner, Navy Pier Inc.’s chief executive officer. Rich Hein / Sun-Times file photo

She was one of three Navy Pier executives whose total compensation topped $300,000. Navy Pier Inc. also paid her husband, Patrick Gardner, $80,353 that year for unspecified work.

The largesse of Navy Pier’s operators even extended to an electrician, Jeffrey Gallegos. His total compensation came to $230,660, which Navy Pier Inc. officials say was the result of seniority and overtime. He didn’t get a bonus.

“I was the hardest-working guy at Navy Pier,” Gallegos says. “I worked seven days a week, 15 hours a day.”

The IRS filing provides the public its only look — and a delayed and limited one, at that — at how Navy Pier is being run since it was turned over to a newly created, not-for-profit organization in the summer of 2011. That’s when the Metropolitan Pier and Exposition Authority — McPier, the government agency that owns the lakefront attraction — gave the clout-heavy operation a 25-year, $1-a-year lease that closed off public access to records showing how Navy Pier is run.

Previously, the McPier authority — overseen by a board appointed by the mayor of Chicago and the governor of Illinois — had to make public the pier’s payroll, contracts and leases. Now, Navy Pier Inc. refuses to divulge those records. Its executives say that, as a private business, they don’t have to.

The Better Government Association is challenging that stance. It filed a lawsuit after Navy Pier Inc. refused to release records to the Sun-Times and the BGA last year.

Navy Pier Inc. was created in the waning days of former Mayor Richard M. Daley’s administration. Its board includes Daley’s daughter Nora Daley Conroy; two former Daley City Hall chiefs of staff, John Schmidt and Roger Kiley Jr.; and Daley’s former campaign chairman Terry Peterson, who also chairs the Chicago Transit Authority board under Mayor Rahm Emanuel.

Another former top Daley aide, Brian S. Murphy, is Navy Pier’s chief operating officer. Murphy, 48, began his career as a Chicago cop and later held top management posts with Daley’s streets, transportation and water departments before becoming first deputy chief of staff. He went back to the police department shortly before Daley left office and was making about $160,000 a year when he left for a job at Navy Pier in the spring of 2012.

At Navy Pier, Murphy’s total compensation in 2013 was $241,426, including a $30,450 bonus. He is one of eight employees whose total pay topped $200,000.

Brian Murphy, Navy Pier Inc.’s chief operating officer. Brian Jackson / Sun-Times file photo

“Mr. Murphy is responsible for all daily operations of the 50-acre Navy Pier,” spokesman Nick Shields says. “Duties include but are not limited to: daily operations, security, construction management, IT, Pier Park, property management, landscaping, parking, housekeeping.”

A son of Daley’s longtime confidant, former state Sen. Tim Degnan, D-Chicago, is among the pier’s highest-paid workers. Michael Degnan, a senior vice president, made $229,719 in 2013, including a $32,960 bonus.

Shields declined to comment on the salaries and bonuses.

In its IRS filing, required of tax-exempt, not-for-profit organizations, Navy Pier Inc. said salaries for its non-union employees were in line with “key staff at similar institutions, and the decisions are documented in NPI’s human resources records” — which aren’t available to the public.

Despite a drop in attendance from an estimated 9.2 million people in 2012 to 8.9 million in 2013, Navy Pier’s reported operating revenues rose slightly, to $44.5 million, primarily from sponsorships and the leasing of exhibition space.

McPier reimbursed Navy Pier Inc. $12.6 million in 2013 for expenses related to the ongoing makeover of the pier, which will mark its 100^th anniversary next year. The government body borrowed $115 million by issuing bonds for those renovations, which also are being bankrolled by a $20 million gift from the Polk Bros. Foundation last summer.

In the fall of 2013, Navy Pier Inc. awarded a $71.4 million contract to Madison Evans Construction Group. Madison’s vice president, Harry L. Walder Jr., worked at Navy Pier when it was operated by McPier.

But the project hasn’t gone as planned. Weather-related delays have slowed construction, and the Polk Bros.’ gift last year sparked Navy Pier Inc. to redesign plans for the pier’s Gateway Park and Family Pavilion, slowing it even more.

Those changes prompted Navy Pier Inc. to seek new construction bids for the park and pavilion, hiring McHugh Construction to do that work rather than Madison.