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*** UPDATED x1 *** Big McCormick Place deal in works while Chicago retiree health care subsidies cut

Wednesday, May 15, 2013

* The Sun-Times initially broke the story about a mega-project near McCormick Place that would house DePaul’s basketball team, two major hotels and possibly a new casino

Mayor Rahm Emanuel is expected to announce this week plans for a $300 million 12,000-seat arena for DePaul University at McCormick Place — a proposal that will call for millions in taxpayer dollars, sources tell the Chicago Sun-Times.

The mayor will also announce plans to build two mega hotels on McPier property in the hopes of aggressively growing convention and meeting business in Chicago. […]

“If I was a betting person, I would say McCormick Place is where you’re going to find a Chicago casino,” said an official who has taken part in development discussions. “I would guarantee you that’s where it’s going.” […]

A source with knowledge of the proposal said one of the mega hotels is slated for the site directly north of McCormick Place between Indiana Street and Prairie Avenue. The other would be on the north side of Cermak Road, which is owned by Centerpoint, a huge industrial real estate property owner, sources say. The west side of McCormick Place, near Cermak, is the area tentatively being considered for the arena.

Sources familiar with the plan said the city would attempt to sell the proposal as not just a basketball arena for DePaul but as a place to attract mid-size convention shows that are too small for McCormick Place and too large for Navy Pier. […]

Gov. Pat Quinn is ruling out any direct infusion of money from the state budget.

“We’re not discussing any scenarios where there would be direct state support. That’s not something the state can afford right now,” said Brooke Anderson, a Quinn spokeswoman said.

* Deets from the Trib

The facility would be partly funded with $125 million in public money — $55 million in special taxing district funds and $70 million in McPier bond funds supported by hotel taxes, a second source familiar with the deal said. DePaul University would chip in another $70 million, the source said. […]

Emanuel spoke with Illinois House GOP leader Tom Cross and told him the project would require state legislation so that McPier bond funds and city tax increment financing funds could be directed toward it, a spokeswoman for Cross said.

House Speaker Michael Madigan said he’s talked “a little bit, not a lot” with the mayor about the proposed project and said it’s uncertain what action the legislature might need to take to make it happen.

“It is certainly worthy of consideration because it’d be a huge construction project, but we’d like to get the details,” Madigan said.

* Meanwhile

Chicago will phase out its 55 percent subsidy for retiree health care by January 2017 but continue that coverage for the oldest retirees, under a mayoral plan that will free taxpayers from a $108.7 million a year burden. Thirty thousand retired city employees will be forced to switch to Obamacare.

“With an increasing retiree population, earlier retirement ages and longer life spans, the ability of the city to continue to provide these benefits is totally untenable,” City Comptroller Amer Ahmad told the Chicago Sun-Times on Tuesday.

“It’s far too expensive and could have an adverse impact on our credit worthiness and add a significant long-term liability to the city’s financials,” he said. “This is just a number that continues to grow over the years. We have to be financially responsible.”

*** UPDATE *** From AFSCME…

“AFSCME is gravely concerned that the Emanuel Administration has offered no details except to say non-Medicare retirees will have to seek private insurance through an exchange that hasn’t yet been launched. This uncertainty will cause anxiety and fear for tens of thousands of seniors who gave their working lives to public service—men and women whose retirement savings are already under attack in the name of ‘pension reform.’

“Our union will be working to get answers to our many questions, to ensure the City Council closely oversees the administration’s proposals, and to protect access to affordable health care for city retirees now and in the future.”

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* Senate OKs bill for arrested 17-year-olds to be sent to juvenile court

- Posted by Rich Miller        


19 Comments
  1. - Plutocrat03 - Wednesday, May 15, 13 @ 12:11 pm:

    What a bunch of hooey. If there is no money to pay the promised health care subsidies, then there should be no public participation for yet another arena in Chicago.

    There seems to be a double standard here. White Sox get $$, Cubs don’t, DePaul gets $$ and in the face of the international convention business declining, the city wants to double down and pin their hopes on another expansion? Sheesh.

    Let these plans go forward on private money. The city is already having to rob Peter to pay Paul with the current Pier bonding responsibilities.

    How may times can they back the wrong horse before common sense prevails.


  2. - wordslinger - Wednesday, May 15, 13 @ 12:14 pm:

    The spin on this is hilarious. Who is actually supposed to believe that this has anything to do with DePaul basketball?

    $300 million for 18 games for the former doormat of the Big East? At Mac Place — even harder to reach than Rosemont for students without cars? When they can play at the United Center for free?

    What’s the point of the obfuscation? It’s an entertainment complex — concerts, boxing, musicals, etc.,– linked to a casino.

    It’s laughable — except to Donald Trump who would love that casino to fill up his empty ground floors.


  3. - Billy - Wednesday, May 15, 13 @ 12:20 pm:

    Wait till the state gets rid of the state’s subsidy for health insurance for retirees. Makes you want to think twice about accepting Cullerton’s choice pension plan, for health insurance from the state. Think we might be better off taking the COLA and saying no to health insurance from the state if it becomes law!


  4. - hisgirlfriday - Wednesday, May 15, 13 @ 12:24 pm:

    NO NO NO TO TAXPAYER FUNDS FOR DEPAUL BASKETBALL!!!

    This mayor cuts off free water to the Catholic church and all city charities, supposedly for the sake of Chicago taxpayers, and then decides to use tax money to build a basketball arena for a Catholic university’s basketball team, despite that team already having a perfectly fine arena in Rosemont and offered 10 years rent-free usage of the United Center?

    This mayor adamantly refuses tax support for renovations at one of the top tourist attractions in the state of Illinois and the historically and culturally significant Wrigley Field, apparently not on principle but for other reasons, because he’s going to pour Chicago tax money into a sporting arena for a private college’s basketball team that hardly anyone in the city care about?

    This mayor is going to close dozens upon dozens of public high schools on the claim that there isn’t money to support them, and then use the TIF money he skimmed off the top of the public school financing base to support a private university’s athletic department?

    This mayor is pushing for state legislation to allow taxpayer funds to go toward building a brand new basketball arena for a private Catholic university that already has a 17,500-seat arena built in 1980 at the same time that the state’s flagship public university and most popular basketball program, the University of Illinois, is completely on its own in coming up with funds to finance a renovation of their basketball arena opened in 1963?

    The juxtaposition of taxpayer funds for this arena and shafting of Chicago retirees is troubling, but man there are stories for days of all the ways this decision is wrong and hypocritical and disgusting.

    Also, who are the clouted developers who own the land around McCormick Place that would be the location of this arena and new hotel complex? And is this some kind of bailout of all the land speculators who popped up around the Chicago 2016 Olympics bid? I sure would like to know.


  5. - Thomas paine - Wednesday, May 15, 13 @ 12:26 pm:

    Wordslinger, agree with you on everything you said but the travel. Red line from Fullerton to Chinatown and 5 block walk….just did it for comic-con no problem.


  6. - Rich Miller - Wednesday, May 15, 13 @ 12:27 pm:

    Thomas paine, you can also take the electric train from Michigan and Randolph right to McCormick Place.


  7. - Chavez-respecting Obamist - Wednesday, May 15, 13 @ 12:35 pm:

    What a sleazeball. I’m already on board with voting Republican just to get this Republican out of office.


  8. - wordslinger - Wednesday, May 15, 13 @ 12:38 pm:

    TP, you’re right. You can also take the Blue Line to River Road and buses are waiting to take you right to Allstate. And Rich is correct about the electric line.

    My point is, Mac Place is being spun as being easier for students at the Lincoln Park campus to get to games. It’s not impossible, but it’s not easier.

    Again, the United Center is offering 10 years rent-free for DePaul. And that’s closer than either Allstate or Mac Place to the Lincoln Park campus, if any of this had anything to do with DePaul basketball.


  9. - siriusly - Wednesday, May 15, 13 @ 1:00 pm:

    I like the idea. DePaul shouldn’t be playing in the suburbs. Maybe thsi plan is a mega plex and has not as much to do with DePaul basketball - but still I like it. More amenities, more conventions, more jobs, more economic activity in Chicago, more revenues. I think it would be good for the economy and a relatively small capital investment to make.


  10. - wordslinger - Wednesday, May 15, 13 @ 1:07 pm:

    I would think any big new development around Mac Place would mean the oldest building — Lakeside Center — comes down.

    It’s a white elephant with loads of deferred maintenance and cannot compete with the glut of convention space around the country.

    But it’s prime real estate. My guess is that’s your casino site.


  11. - carbaby - Wednesday, May 15, 13 @ 1:29 pm:

    I travel in that neighborhood several times a month to the DCFS builing on Indiana and have for the last 18 years. I can’t see the people who live in that area would really want this- that would completely take away why people chose to move to the South Loop area. It’s already a challenge to park over there. I have noticed in the last few weeks a lot of construction. So perhaps they are already beginning to clear the way. I can’t see the State being able to stay there much longer. I see the lease rates taking quite a considerable jump.
    wordslinger and hisgirlfriday- I completely agree


  12. - anon - Wednesday, May 15, 13 @ 1:39 pm:

    Secular Sports Team- No way we give you public money to help maintain an internationally known landmark

    Religious-affiliated Sports team- Sure, here’s some public money to build a generic new basketball stadium.


  13. - Robert the Bruce - Wednesday, May 15, 13 @ 1:41 pm:

    Building the casino as close as possible to the convention center thankfully is still the plan. Might as well gobble up out-of-state folks’ money, a big change from Illinois residents’ money going to Indiana casinos.

    But city-developed and city owned? Oh my, Chicago may be corrupt/stupid enough to actually manage to lose money ultimately on this deal.

    Also, what’s in it for DePaul? If the source is right, is $70M a good price for a new arena vs. their option of 10 years rent-free at UC? Or are they getting something back from Mayor Emanuel completely separate from this deal?

    btw, this new location is not less convenient for Lincoln Park DePaul students. The Blue line (to Rosemont to shuttle or walk up River Road) doesn’t stop within an easy walk from DePaul’s campus. Public transportation-wise, this new proposed location is similar to getting to the United Center from Lincoln Park - slightly more miles, but with no transfer. But this new location isn’t hugely more convenient; I can’t imagine this will really do much to boost attendance. A better team would. Maybe the city could hire some friends and relatives of the top Chicago-area hs basketball prospects.


  14. - wordslinger - Wednesday, May 15, 13 @ 1:49 pm:

    I wonder how DePaul spins ponying up $100 million for a stadium at McCormick Place, given that they have a rent-free offer at United Center? Students paying at least $33,000 in tuition might want to know.

    Maybe they can get a business professor to explain that one.

    DePaul averaged about 7,500 fans last year at 16 games at Allstate. That ain’t exactly Cameron Crazies. What’s the ROI at Mac Place?

    Not all the cards are on the table yet. My guess is they’d be in the entertainment business linked to the casino.


  15. - Robert the Bruce - Wednesday, May 15, 13 @ 1:54 pm:

    It is only $70M from DePaul, wordslinger, not $100M. Or maybe you are baking in an estimate of the eventual inevitable cost overrun (though that would probably make the $70M more like $140-$210M)?


  16. - wordslinger - Wednesday, May 15, 13 @ 2:03 pm:

    Robert, Sun-Times had $100 million. I guess we’ll find out eventually. I don’t know that the soft rollout is going so well, though.


  17. - wordslinger - Wednesday, May 15, 13 @ 2:18 pm:

    Is any public money needed at all in relation to the development of the sole casino in Chicago — especially if done in conjunction with a convention center’s captive market?

    Money is pouring into the stock market, junk bonds and IPOs chasing returns. Why can’t this just be a private deal? So politicians can claim they’re “creating jobs?”


  18. - Will Caskey - Wednesday, May 15, 13 @ 2:22 pm:

    Relative to labor press releases this is pretty low on a scale of “meh” to “WARRRRRRR!”


  19. - Anonymous - Wednesday, May 15, 13 @ 3:12 pm:

    I know someone who knows about the details of the arena proposal. One of the things that these stories are missing is that the offer from the United Center wasn’t exactly “free.” Operating costs, for example, were projected at about $250,000 annually. Additionally, the United Center would retain all revenues from parking, concessions, catering and ticket and suite sales. De Paul receives money for all of those at the All State Arena.

    Finally, the United Center couldn’t guarantee practice time for De Paul or its opponents before games. There was no provision for the women’s basketball team to use the facility,or for graduation ceremonies or other uses. So the United Center offer was basically for 18 men’s basketball games and nothing else.

    I’m not nuts about the city proposal but thought these other facts would add to the big picture.


Sorry, comments for this post are now closed.


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