When it comes to Chicago casino, ‘know when to hold ’em’ mayor
It’s not just an iconic Kenny Rogers lyric: When the city has cut big deals with private investment groups during financially stressed times, things haven’t always ended well.
“Son, I’ve made a life out of readin’ people’s faces, knowin’ what the cards were by the way they held their eyes. So if you don’t mind me sayin’, I can see you’re out of aces. . . . You’ve got to know when to hold ’em, know when to fold ’em . . .”
The coronavirus is indeed leaving our city and state without many financial aces.
At first glance, a Chicago casino might look like one.
But just like the gambler in the iconic song by Kenny Rogers, Chicago needs to look deep into the eyes of the gambling industry before playing its hand.
Our advice: Hold ’em.
Don’t count on a Chicago casino to start producing gambling tax revenues for at least a few years, likely longer. There’s too much at risk by moving too quickly.
When Chicago has cut big deals with private investment groups during financially stressed times, taxpayers have not always fared well. That arguably was the case in 2005 when the city leased out the Chicago Skyway. It undoubtedly was the case in 2008 when former Mayor Richard M. Daley and the City Council cut their infamous parking meter privatization deal.
Now Lightfoot finds herself in a similar situation to that of Daley. She’s looking for a massive infusion of new revenue to fill a massive city budget hole without jacking up property taxes or other city fees.
And with each passing day, things get worse. As David Roeder of the Sun-Times reported Thursday, one of the city’s biggest revenue streams beyond property taxes — the convention business — likely won’t be flowing fully again for another year or two.
Despite this financial pressure, the mayor needs to play the long game.
City Hall has been under pressure for years to land a casino for Chicago, which could generate hundreds of millions of dollars in revenue. The city’s finances have long been a mess, and the economic crisis created by the coronavirus has made matters exponentially worse. The city’s budget deficit for 2021, the mayor says, could grow by more than $700 million.
Tempting as it may be, though, a Chicago casino should not be a part of discussions about how to close that 2021 budget gap.
Yes, the city finally has a casino license in hand and, better yet, the Legislature in late May revised the casino’s tax structure, making the entire project more feasible.
But Chicago should go slow. Nobody should be rushing to cut a deal at a time when the value of the casino license, given the times, is in question.
Chicago worked long and hard in Springfield to win a casino and get the tax structure right. Lightfoot, to her credit, got it over the goal line.
But rushing to play the casino card right now would be foolish. Potential casino operators would be looking for a fire sale, an overly generous deal by an overly eager City Hall that might short the taxpayers down the road.
Remember those conventioneers? It’s always been thought that they’d help fill a city casino and spend money at a larger entertainment complex surrounding it. Now, they won’t be back in town some time.
When pressed by Sun-Times reporter Fran Spielman the other day, Lightfoot declined to say when and where a casino might be built, but she repeated it should be the cornerstone of a larger entertainment venue.
All the more reason, as the mayor seems to be suggesting, to take a breath and get it right. City Hall’s focus for now should be on choosing the best site for a casino and working hand in glove with the Illinois Gaming Board to pave the way for final approval when financial conditions are better.
Should anyone think otherwise, we encourage them to look at the problems the parking meter deal is still causing.
Yes, City Hall got more than $1 billion up front when it sold the rights to operate the meter system to a private company for 75 years. But that company immediately jacked up parking rates, incensing motorists.
And then there’s that part of the deal that requires taxpayers to reimburse the company if meters get taken out of service.
There’s been a spotlight on that now because of the mayor’s plan to shut down commercial corridors during certain hours to help struggling restaurants rebound from the pandemic by putting tables outside. City officials acknowledge those street closings might require the city to compensate the parking meter company — but they’re not saying how much.
So when it comes to a casino, hold ’em, mayor. Like Rogers says in his song, the project is an ace you can definitely keep.
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