Navy Pier Inc., the clout-heavy not-for-profit whose president is paid more than $540,000 a year, has received a nearly $2.5 million coronavirus stimulus loan from the federal government toward salaries and other expenses.
Facing what it says are losses of $10 million, Navy Pier Inc. says the loan from the U.S. Small Business Administration’s Paycheck Protection Program will cover expenses and the salaries of 147 employees, some who have been “sidelined” since the pier was shut down in March by the COVID-19 pandemic.
The federal loan will be used to cover all salaries, including that of Marilynn Kelly Gardner, the Navy Pier Inc. president and chief executive officer whose salary, bonus and other compensation totaled $541,051 in 2018, according to records filed with the Internal Revenue Service.
The company’s board of directors, which includes former Mayor Richard M. Daley’s daughter, spends more than $3 million a year on pay for Gardner and seven other top employees. That includes $419,204 for chief operating officer Brian Murphy, a former Chicago cop who was Daley’s deputy chief of staff, and $258,816 for vice president of operations Michael Degnan, the son of longtime Daley political adviser Timothy Degnan.
The pier’s payroll topped $15.4 million for 2018, the most recent data available.
The $2,489,500 loan “made it possible for us to resume work and payroll from some employees who had been sidelined prior to receiving the loan,” according to Navy Pier Inc. spokeswoman Payal Patel. “Unlike other similar cultural institutions sitting on public land in Chicago, the pier does not have an endowment nor does it receive any monetary support from any government entity. Ninety percent of Navy Pier’s revenue is realized through earned operating income, and the balance is generated through philanthropy.”
Navy Pier Inc. does get a big break on rent, though. It pays the city of Chicago and the state of Illinois just $1 a year to lease the pier, which is the state’s largest tourist attraction.
The PPP loans cover about 10 weeks of expenses and won’t have to be repaid as long as the companies don’t cut their workforces.
Illinois businesses, including the parent company of the Chicago Sun-Times, secured about 69,000 loans through April 16 totaling $15.9 billion, according to SBA data.
Navy Pier was long run by the Metropolitan Pier and Exposition Authority, a government agency established by the city and the state to oversee the pier and also to operate McCormick Place. In 2011 as Daley was soon to leave City Hall, he agreed to a deal, approved by Illinois legislators, to allow the authority to lease the pier to the newly created Navy Pier Inc., run by Daley allies including his daughter Nora Daley Conroy.
Navy Pier’s operators, past and present, have a history of making deals with politically connected people and businesses, giving them lucrative contracts to operate restaurants and shops and other attractions that together lure 9 million visitors a year to the pier.
Who got those deals was public information when McPier ran Navy Pier. Now, the not-for-profit’s board says the public no longer is entitled to know the terms of those lucrative contracts.
The Better Government Association has sued for such access. Cook County Circuit Judge Thomas Allen threw out the suit, but the BGA has appealed to the Illinois Appellate Court.
In 2018, Navy Pier Inc. lost nearly $5.5 million, primarily because its revenue declined to $56.5 million from $65.3 million the previous year.
At the end of 2018, Navy Pier Inc. owed $57.9 million in bonds and construction loans. It’s required to pay slightly more than $3 million on those debts this year.
With Illinois residents still sheltering at home while non-essential businesses remain closed under orders from Gov. J.B. Pritzker, there’s no timetable for Navy Pier to reopen or to resume its weekly fireworks displays along the lakefront.
“We got to be open to the public as soon as this thing lifts,” according to a source familiar with Navy Pier’s operations, who says the hope is that the government money will allow that to happen.
