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Two lowest ranked Waukegan casino bidders slam hands dealt them by consultant ahead of key city vote

Aldermen in the north suburb will vote Thursday night on their preferred casino proposals.

Casino magnate Neil Bluhm, left. in 2019
Casino magnate Neil Bluhm, left, arrives at Theater on the Lake in Chicago last month for the wedding of former Mayor Richard M. Daley’s son, Patrick Richard Daley and Tara Flocco. File Photo.
Colin Boyle for the Sun-Times

Four remaining developers are jockeying for position as Waukegan city officials prepare to lay their chips behind preferred proposals for the north suburb’s long-sought Lake County casino.

With aldermen in Waukegan poised to vote Thursday on advancing at least one of those bids to the Illinois Gaming Board for final consideration, an independent consultant’s ranking of the competing plans has two major casino developers up in arms ahead of the crucial city council decision.

Five groups initially submitted proposals to officials in Waukegan, which is among six Illinois municipalities granted new casino licenses as part of Gov. J.B. Pritzker’s massive gambling expansion signed into law over the summer. One bidder for the Waukegan casino dropped out of the running last month.

The city hired a Chicago firm to evaluate the proposals, and their report released last week marked Las Vegas-based Full House Resorts as the top contender, with North Point Casino — and its politically connected manager, former Grayslake state Sen. Michael Bond — following closely behind on a points-based rating scale.

A rendering of the proposed “American Place” casino in Waukegan.
Artist’s rendering of the proposed “American Place” casino in Waukegan proposed by Full House Resorts.
Provided by Full House Resorts

In third, Johnson Consulting ranked the venture by Churchill Downs Inc. and Rush Street Gaming, the group that already runs Illinois’ most lucrative gambling den: Rivers Casino in Des Plaines.

That ranking irked billionaire Chicago real estate mogul and Rush Street chairman Neil Bluhm, who complained in a letter to city officials that the report had ignored their latest revised offer submitted earlier this month.

The ratings also “raised a number of red flags” for Forest County Potawatomi attorney general Jeff Crawford, who represents the Wisconsin tribe and its proposed Waukegan Potawatomi Casino, which ranked last.

Rendering of the first phase of development for the proposed North Point Casino.
Rendering of the first phase of development for the proposed North Point Casino.
Provided

“It appears the two proposals that promise the smallest number of jobs and the lowest economic impact on the city are ranked No. 1 and 2, and there’s absolutely no explanation for how that was done,” Crawford said.

Waukegan ordered the 18-page report to help weigh the competing proposals for what the city pitched as “more than just a casino but rather an entertainment destination.”

The consultant graded the developers on their financial data, project team experience, and overall plan for the site at the shuttered Fountain Square shopping center at Lakehurst Road and Northpoint Boulevard — plus how much they’re willing to pay for the land.

Aerial view of the Fountain Square site that could soon be home to a casino in Waukegan. Provided by the City of Waukegan
Aerial view of the Fountain Square site that could soon be home to a casino in Waukegan. Provided by the City of Waukegan
City of Waukegan

That’s the sticking point for Bluhm, who pointed out in his letter that the proposed Rivers Casino Waukegan was downgraded for its $11 million offer, even though they upped their bid to $23 million with a revised Oct. 4 proposal.

Bluhm also said the consultant left out other “material aspects” of their updated bid to the city, including giving Waukegan an additional 2% share of the casino’s gross receipts above $200 million and 3% above $300 million, not to mention charitable contributions to the city of at least $20 million.

Rendering of the proposed Rivers Casino Waukegan.
Rendering of the proposed Rivers Casino Waukegan.
Provided by Churchill Downs Inc./Rush Street Gaming

Potawatomi — whose bid projects the highest number of new jobs created at nearly 2,600, and is second to only Rivers in projected tax revenue — was downgraded for offering the lowest bid on the land at $5.6 million. Top-ranked Full House and North Point offered $30 million and $22 million respectively.

Crawford called it “shocking” to see the Potawatomi bid ranked at the bottom, “especially considering one of the applicants has never operated a casino in their lives.”

That was a knock at the North Point plan led by Bond, who poured thousands of dollars into local elections through his video gambling machine company Tap Room Gaming ahead of the state gambling expansion. But partnering on the project with Bond is Warner Gaming, a Vegas entertainment company with five casinos in its portfolio.

Rendering of a sportsbook at the prposed Waukegan Potawatomi Casino.
Rendering of a sportsbook at the proposed Waukegan Potawatomi Casino.
Provided

Potawatomi on Tuesday announced it would negotiate with the city on investing in a separate downtown development project if it wins the casino bid. The group said they had identified “several outstanding opportunities for worthwhile economic development projects” but were light on specifics.

Waukegan city attorney Bob Long suggested the developers’ gripes were really more of an attempt to sweeten their offers late in a bidding war with the city council decision looming.

“Our consultant was very careful in his analysis and their offers were, in fact, pretty vague,” Long said. “While that might be understandable since each of them didn’t want to commit to spending a lot more than the competition, they’re now trying to improve on their offers or clarify the vagueness.”

Once casino applications are submitted to the Gaming Board by the end of the month, that agency has up to a year to consider them and issue licenses.

Read the full consultant’s report and Neil Bluhm’s response below: