$1.7 billion Bally’s Chicago casino clears key hurdle

Mayor Lori Lightfoot’s race to secure $40 million in upfront payments from Bally’s to keep police and fire pensions solvent and stave off a pre-election property tax increase cleared a key hurdle Monday with committee approval of a long-sought Chicago casino.

Thanks to the lobbying muscle of organized labor, a special City Council committee stacked with the mayor’s hand-picked committee chairs approved an ordinance authorizing Bally’s to build a $1.7 billion permanent casino at Chicago Avenue and Halsted Street in River West, a temporary casino at Medinah Temple in River North and a host agreement with Bally’s.

That host agreement covers the labor deal and other financial, contracting and hiring commitments the company has made.

The 27-3 committee vote came during a dizzying day at City Hall. The City Council had met earlier Monday, recessed, then reconvened after the casino committee’s vote. The full council then voted to “defer and publish” the host agreement, setting the stage for final approval on Wednesday.

The frenzied and “unprecedented” schedule prompted downtown Ald. Brendan Reilly (42nd) to tweet a GIF of a woman in a bikini doing somersaults on a beach and landing face-first in the sand. Reilly said the rushed process is similar to what happened when the city struck a much-criticized deal to privatize its parking meters.

“I’m not saying this is the parking meter deal. I’m not even saying it’s the same kind of transaction. I’m saying ... this sprint to the finish and the gymnastics that we’re doing today” is similar, Reilly said.

“In speaking with [Ald. Edward] Burke, who’s been here for 50 years — he’s never seen anything like this. So in a way, this is actually worse than the process for the parking meter deal.”

Anthony Vazquez/Sun-Times

Reilly and neighboring Ald. Brian Hopkins (2nd) failed to convince their colleagues. They had argued Bally’s will create an impossible bottleneck in an already congested area, and also that Bally’s has never built a casino from the ground up. Further, they noted, Lightfoot went around the committee she created to give herself “political cover” for a decision she had already made.

Ultimately, Reilly, Hopkins and Ald. Michele Smith (43rd) were the only committee members to vote “no.”

Reilly likewise is dead-set against the idea of turning Medinah Temple, 600 N. Wabash Ave., into a temporary gambling den, at least through the first quarter of 2026, or exempting Medinah from the liquor moratorium on that block.

He argued Lightfoot’s eleventh-hour “switcheroo” to the landmark building as the temporary site will make an alarming spike in River North crime infinitely worse and that the already-congested area can’t handle the influx of traffic.

Alderpersons who backed the casino cited its economic promise for the city and said its help for the pension funds reduces the risk of a property tax increase.

Anthony Vazquez/Sun-Times

During Monday’s committee hearing, Reilly accused the Lightfoot administration of putting too much weight on the $40 million upfront payment and not enough on what he portrayed as Bally’s pie-in-the-sky revenue projections.

“This casino needs to generate about $550,000 a day in taxes. For that to happen, the casino would have to win $1.4 million-a-day, all 365 days-per-year, with no accounting for snow, protests, crime, January and February in Chicago every year, etc., etc. Assuming every patron wagers $3,000 daily, which is never gonna happen, the casino will need to see 9,300 patrons every day of the year. Given the number of casino positions, that’s not likely to happen,” Reilly said.

He said the casino would have to perform “on super steroids” to meet financial projections.

“We’re putting a real premium on the upfront [payment]. I’d rather the taxpayers have a longer term guarantee that these projections are actually worth the paper they’re printed on. … Would Bally’s be willing to guarantee Chicago a baseline of $200 million in annual revenues after 2027, holding taxpayers harmless if these projections are woefully overstated?”

Chief Financial Officer Jennie Huang Bennett insisted Bally’s needs to generate “closer to $353,000 a day” to meet the city’s projections. The rest of the money is “generated by property taxes and the improved value” of the “underutilized industrial site” of the Chicago Tribune’s printing plant.

“Having a minimum annual guarantee and requiring an operator to provide us with a guarantee of revenues despite whatever the economy may be in the future ultimately has the detriment of reducing the upfront value to us as well as the ongoing percentage that the city makes. That’s why we negotiated a percentage,” Bennett said.

Reilly asked who at the city ordered the last-minute shift to Medinah Temple, and why. The original plan was for a temporary casino in a Tribune warehouse at 700 W. Chicago Ave., near the permanent site at 777 W. Chicago Ave.

Samir Mayekar, deputy mayor for neighborhood and economic development, cited too many “transit challenges” with that location, given the Chjcago Department of Transportation’s plans to widen Chicago Avenue, rebuild the Halsted Street viaduct and replace the Chicago Avenue bridge.

He called the casino a “once in a generation opportunity” to help Chicago’s economy.

Bally’s proposal won Lightfoot’s backing May 5, before the casino committee even had a chance to weigh in. Her administration’s review showed its revenue estimates were slightly higher than competing projects, with a shorter projected turnaround time.

Anthony Vazquez/Sun-Times

City officials also emphasized Bally’s has no competing casino interest in the Chicago area. Finalists Rush Street Gaming and Hard Rock Casino operate in Des Plaines and Gary, Indiana, respectively.

Bally’s has proposed 3,400 slots, a 3,000-seat entertainment center, a hotel with up to 500 rooms, a 1,000-seat outdoor music venue and exhibition space including a Chicago sports museum.

The 30-acre site has the Chicago Tribune’s newspaper printing plant, where the Chicago Sun-Times also is produced. The plant could move. Bally’s Chairman Soohyung Kim also raised the possibility of it remaining on part of the property.

The Rhode Island gambling company’s deal calls for it to start taking bets at Medinah Temple within a year of Illinois Gaming Board approval, and to complete its massive casino-resort within three years.

Bally’s would pay the city for lost revenue if that rigid timetable is not met.

Nearby residents have been critical, fearing crime, noise, congestion and a drop in property values. In response, Bally’s has pledged a $2 million annual subsidy for public safety at the temporary site in addition to $5 million in casino security.

The $2 million payment would continue when the temporary casino opens, but half that would be earmarked for community benefits designated by local Ald. Walter Burnett (27th).

Prior to the final vote, South Side Ald. David Moore (17th) demanded to know what would happen if homeless Chicagoans tried to gamble at either the temporary or permanent casino.

“They may not look up to par. They may not smell up to par. But they may not be disrupting people. And they’re just saying, ‘I want to come in here and try to hit that million,’” Moore said.

“Is there gonna be some type of written policy for how we address and handle this so we’re not getting hit with discrimination suits saying who can and cannot come in?”

Ameet Patel, senior vice-president of regional operations for Bally’s, assured Moore there would be “no policy that discriminates” against homeless patrons.

“When people enter, they have to at least abide by the norms of dress codes and behaviors that we would demand from every patron. Whether you’re homeless or not does not necessarily constitute whether you can enjoy the casino or not. They’ll be allowed as any other patron would be.”

Courtesy of Friedman Properties