When San Francisco passed on the Lucas Museum, Mayor Rahm Emanuel said Tuesday, they “coughed up their future.”
But was it their future? Or did they cough up a hairball?
As the price climbs to bring filmmaker George Lucas’ proposed museum of the visual arts to Chicago, that would be the question at the heart of the matter. If Chicago, with an assist from the state Legislature, is going to raise five tourism taxes and borrow $1.2 billion to fund a major lakefront redevelopment project that would include the museum, the burden is on Emanuel to prove it would be a boon to the city’s economy.
There will be hearings and debates. Here’s hoping every Chicagoan approaches them with an open mind and a skeptical eye. Successful cities boldly invest in their future, which was the mayor’s point when he took a jab at San Francisco. But they are not chumps.
EDITORIAL
The mayor’s office is selling this latest Lucas Museum plan as a triple winner. Chicago would gain not only a major new tourist attraction but also 12 additional acres of lakefront parkland and a badly needed upgrade in convention hall space. McCormick Place East would be torn down to make room for the museum and the new parkland, and replacement convention space — state-of-the-art and more marketable — would be built elsewhere.
The complexity of the plan, though, makes the financing tough to evaluate. Emanuel says McCormick Place East, if not torn down, will require $225 million in repairs and upgrades anyway over the next 20 years. And with Lucas willing to kick in $743 million to the overall project, the mayor says, Chicago would be crazy not to seize the day. It is, he says, a matter of staying the race.
“Neither Vegas, Orlando nor New York are resting on their laurels,” he said Tuesday. “They are investing in their future to compete for the same business we’re competing for.”
In addition to borrowing $1.2 billion, Sun-Times City Hall Reporter Fran Spielman reports, Emanuel wants the Legislature to raise five tourism taxes. Two of those levies — of 2 percent and 2.5 percent — apply to Chicago hotel rooms. The other taxes are on restaurants, rental cars and ground transportation at O’Hare and Midway Airports.
To the mayor’s way of thinking, these are comparatively painless taxes, paid by tourists rather than Chicagoans. But we’re not at all sure Chicago business interests — especially hotel operators and restaurateurs who cater to the tourist trade — would agree. Just two weeks ago, officials from the Chicagoland Chamber of Commerce and the Illinois Retail Merchants Association met with the Sun-Times Editorial Board to complain that a steady drip of new local taxes and regulations is hitting their members hard. As Spielman reports, hotel rooms in Chicago already are taxed at a rate of 17.4 percent. That compares to just 12 percent in Las Vegas and 12.5 percent in Orlando.
The bottom line: Even with a movie mogul kicking in a big chunk of his personal fortune, there is a serious upfront cost to this deal for Chicago.
But there is also this: Emanuel is right, of course, when he says Chicago can’t back off major investments in the city’s future, even at a time of great financial woes and despite an unhelpful governor. And putting money toward the convention and tourism industry — when done right — definitely qualifies as an investment in the city’s future.
The Lucas Museum, according to an estimate by the Civic Consulting Alliance, could draw more than 1 million visitors a year, generate more than $2 billion in increased tourism spending and more than $120 million in new tax revenue over ten years. It would also create thousands of construction jobs and, once open, more than 350 permanent full-time jobs.
Do we believe those numbers?
Of course not — not yet.
Let the hearings and debate begin.
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