The mayor reportedly is seeking $40 million now plus $2 million a year down the road—or a total of $75 million if all the money is paid now.
It’s not clear whether the money would go toward the general city budget, which continues to be under some financial pressure, or to specific neighborhood projects or other purposes. The term sheet outlining the city’s big ask to bidders is “ambiguous,” said one source.
Nor is it clear whether the money would be an early payment of taxes the casino eventually is expected to pay or is an additional add-on.
In a written statement, the city appeared to confirm that such payments are being sought, but declined to provide details.
Under state law, the city’s statement said, taxes directly on gaming must go toward city pension expenses. “All other revenues and financial incentives will go to the city’s general purposes, which fund essential services such as police, fire, streets, and sanitation, among others. Negotiations are ongoing and (the city) will provide more details once they are available.”
Such requests for upfront payments are not uncommon nationally, industry sources say. And Lightfoot arguably will look good going into her presumed re-election race if she’s viewed as having bargained hard and won the best possible deal for a city that certainly could use the money.
But while all the bidders eventually may comply, if reluctantly, the city’s demand adds another level of complexity to events as Lightfoot prepares to sell her eventual selection to the City Council and Illinois Gaming Board, with a decision possible within weeks. If nothing else, it underlines how much is at stake in finally securing a casino that the city hopes will provide hundreds of millions of dollars to shore up cash-short city police and fire pension funds.
The three final sites—the Tribune printing plant property at Halsted and Chicago, The 78 development at Roosevelt and Clark, and a location that’s part of the One Central development on Metra air rights west of Soldier Field—all have drawn strong local opposition in a series of recent public hearings. More troublesome for the mayor: Some aldermen have begun coming out against some of those sites.
In preliminary bids made to the city weeks ago, Bally’s is the only contender known to have made an upfront offer, $25 million.
In testimony before a City Council committee on Monday, city CFO Jennie Huang Bennett confirmed that officials have “asked for an upfront payment from each of the bidders and continue to negotiate that.”
“We are working to negotiate a better proposal from what we had released in the evaluation report,” she added, describing the payments as a “bridge” between what the city needs now and what it will get when a temporary casino presumably opens by 2024 and a permanent one a few years later.
Lightfoot in recent days has suggested that despite some neighborhood opposition, the city needs to proceed. She asked whether objectors rather raise property taxes?
Aldermen have pushed back, for instance raising the possibility of taking another look two eliminated sites at and near McCormick Place.
Among other items believed to be the subject of last-minute negotiations are union rights at the proposed facilities, whether small investors will be allowed to buy a stake, and minority participation. Bally’s has said it has dropped a clause allowing it to buy out minority investors but has not publicly disclosed a replacement clause.
Spokesmen for all three bidders declined comment on the mayor’s request for large up-front payments.
—Justin Laurence contributed.
via Crain’s Chicago Business
April 26, 2022 at 03:21PM