McCormick Place CEO warns of casino impact

The CEO of McCormick Place raised potential roadblocks Tuesday to casino proposals that involve the convention center’s property and said changes in state law may be needed before its sites can accommodate gambling.

Three of the five casino bids the city is evaluating call for using part of the convention complex, either Lakeside Center, McCormick Place North or its truck marshaling yards south of the exhibition halls. Any change in their use would disrupt operations and may cost Chicago convention bookings, said Larita Clark, CEO of the Metropolitan Pier and Exposition Authority.

Lakeside Center, the oldest McCormick Place building, has been overshadowed by additions to the complex and its occupancy lags the others. But in her reporting to the MPEA’s board, Clark said it still draws significant business. Replacing it would require a new $1 billion hall that would take about six years to build, she said.

Lakeside Center “does not sit empty,” she said. Clark said it has 253 events scheduled through 2035, worth $13.8 billion in economic impact, besides housing mechanical systems serving the whole campus. “The reality is if we lost the Lakeside Center, we’d need to replace 600,000 square feet and all the critical infrastructure,” she said.

Clark reported that McCormick Place North was booked nearly to its maximum level in the years before the pandemic knocked out most convention business. The marshaling yards, she said, reduces truck congestion and helps exhibitors and contractors set up and take down items quickly. “In 2019, 35,000 trucks used the marshaling yards and their proximity to our campus is a competitive advantage,” Clark said.

Her remarks are a challenge to all but two of the casino bids. The only proposals that would not touch McCormick Place are a Bally’s bid for the Chicago Tribune’s Freedom Center printing site, 777 W. Chicago Ave., or one from Chicago magnate Neil Bluhm’s Rivers Casino that relies on 62 vacant acres southwest of Roosevelt Road and Clark Street.

Another Bally’s proposal would put the casino in the marshaling yards, while a second Rivers plan places it in the Lakeside Center. A bid from Hard Rock suggests Lakeside Center or McCormick Place North as temporary sites until a permanent one can be finished nearby on a development site known as One Central.

In an interview, Clark said she wasn’t trying to force any bids out of the running but to “get the facts out” to prepare her board for City Hall’s selection of a casino site. Her agency is not involved in that pick.

“We’re not saying ‘no way’ on anything. We’re just saying there are other considerations and there’s information we don’t have right now,” she said.

A spokesman for Mayor Lori Lightfoot did not respond directly to Clark’s comments, saying only, “The city continues to review all proposals by bidders on the Chicago Casino.”

The MPEA has a nine-member board, with four members each picked by the governor and mayor. The members name their own chairperson. It did not vote Tuesday on any casino-related matter.

Chairperson Jeffrey Bethke said the board doesn’t want to pick a casino winner but evaluate potential impact on the convention customers. Its facilities that figure in casino alternatives have “real value” in attracting meetings and trade shows, he said.

MPEA staff told the board that any changes to bring in gambling might require the Legislature to amend the principal state law governing its affairs, the MPEA Act. Changes also might be needed to state law governing its lease for Chicago Park District land, staffers said.

They also noted that the Lakeside Center has to be used for public benefit because of its location. Preservationists have stopped other lakefront development by invoking a legal precedent called the public trust doctrine.

A spokesman for the Rivers Casino bid involving Lakeside Center noted its team wasn’t allowed to communicate with the MPEA ahead of their bid submission and “anticipated the comments that have been raised.”

The group, which previously described the aging Lakeside Center as “sparsely used,” said Tuesday they’re “confident that our plan addresses those issues in a way that will make a positive impact on McCormick Place, and will provide a direct benefit to MPEA, the city and state.”

They say they’ll save the MPEA nearly $1 billion by assuming deferred maintenance costs, paying $15 million in rent annually and “eliminating the operating loss on Lakeside Center.”

“Only Rivers Chicago McCormick advances the public interest by offering additional taxpayer benefit on top of the gaming revenue any casino will bring to the city and state. No other applicant does that,” spokesman Eric Herman said in an email. “We look forward to partnering with the MPEA to custom-build a solution that meets all of its needs.”

A Bally’s spokeswoman declined to comment.

MPEA staff also cited potential legal problems for any casino plan involving the marshaling yards. The authority in May 2020 signed a letter of intent with developers to exclusively negotiate future use of the property. The developers could connect it to their Michael Reese Hospital property, a 48-acre site slated to get a mixed-use development.

The letter of intent cannot be terminated until May 2023, staffers said.

A leader of the Michael Reese team, Scott Goodman, founding principal of Farpoint Development, reminded the board of its agreement during a public comment period at the Tuesday meeting. He called on the board to refuse to discuss the marshaling yards with Bally’s. Farpoint is a partner in the Rivers bid for Lakeside Center.