Bally’s Gets City Council Nod, Though Questions Linger About Process, Profitability
Chicago will get its first casino, as city council members approved an agreement with Bally’s to build a $1.7B development in the city’s River West neighborhood.
By a 41-7 vote Wednesday afternoon, aldermen approved Bally’s proposed casino complex on the former Tribune Publishing site as well as a temporary casino at the vacant Medinah Temple, a former Bloomingdale’s store at 600 North Wabash Ave., until the larger project is complete in 2026.
Council members cited high-paying jobs and benefits, a commitment to labor and lifting up socioeconomically disadvantaged residents, and the chance to stabilize city finances by shoring up pension funds in their approval.
“The bottom line of this is, this is about revenue,” said Alderman Jason Ervin, who represents the city’s 28th Ward. “Cars don’t run on hopes and prayers. …Government, too. We have obligations we need to meet, and that number does not decrease as time moves forward.”
Under the agreement, Bally’s will pay the city a flat $40M within five days of signing the contract approved by council, in addition to $4M in yearly payments. Bally’s is expected to make $74M in infrastructure improvements and contribute $200M annually to the city.
Ervin hailed the involvement of a wide cross section of Chicagoans in a process he said moved the needle on equitable practices in procurement, construction, employment and ownership, paving the way to generational wealth for socioeconomically challenged residents. Bally’s has committed to filling at least 50% of openings with Chicago residents, setting aside 15.5% of openings for residents of socioeconomically disadvantaged areas and making a “good faith effort” of hitting city contracting targets of 36% minority-owned businesses and 10% women-owned businesses.
“I believe the way Bally’s and city of Chicago have structured this deal will be a model going forward,” Ervin said.
The vote for the casino came despite concerns — even from several who ultimately voted in favor — about a rushed process, Bally’s cozy relationship with an attorney and consultancy firm involved in the deal, and the ability of the casino to actually generate the predicted $200M a year.
Supporters pointed to the strong labor union support and an agreement pledging not to interfere with employee attempts to organize and to notify the heads of five unions when it begins hiring for open positions. Union members working at Chicago hotels, coffee shops and restaurants turned out at Wednesday’s meeting to speak overwhelmingly in favor of the casino.
“The casino will elevate workers to a level of dignity of which they can be proud,” Yolanda Garduño, a room attendant at a downtown Chicago hotel, said through an interpreter.
“I want to be able to retire and live comfortably,” said Alexander Williams, a saute cook at O’Hare International Airport’s Macaroni Grill and a resident of the city’s 28th ward. “The Chicago casino will not only create jobs but good jobs.”
“It means the attendant at the valet stand, the dealer at the blackjack table, the bartender who serves you a drink, the stagehand at the entertainment venue and the engineer who keeps all the buildings running — all of those workers will have the chance to earn family-sustaining wages and benefits,” Alderman Michael Rodriguez, who represents the 22nd Ward, said before casting a yea vote.
Not everyone was sold that either the deal or the timing was right, however. Alderman Byron Sigho Lopez at one point engaged in a brief but angry shouting match with Mayor Lori Lightfoot. A number of aldermen raised questions about why the committee set up to select between three finalists had been bigfooted by the Lightfoot administration, which announced it had selected Bally’s on May 5.
“Before we’d even finished our evaluation, the decision was usurped and Bally’s announced,” casino committee member Alderman Brian Hopkins of the Second Ward said, adding he felt the Bally’s site was the least desirable of the three finalists. “We need more time to analyze this, we need the time to get the questions fully answered to vet this proposal and see if we can do better, because I think we can.”
Hopkins and others also complained that since the Bally’s decision was made, troubling information has leaked out in dribs and drabs. Casino consultant Union Gaming, which advised the Lightfoot administration on revenue projections and found Bally’s was offering the best deal, also served as co-manager on a $696M Bally’s stock offering last year, although the two matters were managed by different divisions.
Law firm Taft Stettinius & Hollister, which advised the administration through the selection process, is also the attorney of record for Bally’s Quad Cities Casino & Hotel in Rock Island, Illinois, Crain’s Chicago reported Monday.
“The optics are horrible despite any firewall,” Alderman Brendan Reilly of the 42nd Ward said.
Reilly reiterated his strong objection to a temporary casino in his ward at the Medinah Temple near Wabash and Ontario streets, which he characterized as the two busiest streets in the central business district, with little nearby parking. Casinogoers will be easy marks for criminals hoping to rob winners with full pockets, he said. He also said it is inappropriate for the city to grant an unprecedented 20-hour-a-day liquor license when nightclub closing time is when “all the nonsense happens.”
“The idea people can reload and have a couple more rounds at the casino after they’re thrown out the nightclub, that’s not real exciting for me or for anyone who lives or works downtown,” he said.
Reilly’s strongest criticism, though, came in regard to the math necessary to actually rake in the promised $200M a year. To do so, he said, Bally’s would have to net $1M a day, 365 days a year, math he called overly rosy.
“We‘d have to be a city of gambling degenerates to make that kind of money. It’s not going to happen,” Alderman Raymond Lopez of the 15th Ward said, pointing out that Illinois’ 11 other casinos generated $248.7M combined in revenue in 2021. “Let’s be real with ourselves, let’s be real with our taxpayers and let’s not rush this just to make headlines.”
Lopez also smacked down the idea the casino vote needed to be rushed to secure the immediate $40M paycheck from Bally’s when the city is facing a $306M budget shortfall.
“If $40M is what’s going to make or break Chicago’s $16B enterprise, we are in a world of hurt more than we know, ladies and gentlemen,” Lopez said. “We’re already looking at a property tax increase no matter what. … This is not going to save us.”
Casino advocates on the council, like 44th Ward Alderman Tom Tunney, countered that the city was losing $190M in opportunity costs to the state of Indiana alone by not building a casino. And Alderman Walter Burnett, whose 27th Ward will be home to the casino complex, acknowledged the process and project weren’t perfect but said the benefits outweigh worries that it could fall short of $200M in revenue for the city annually.
“Will we get all of it? Guess what, it’s better than nothing,” Burnett said. “It’s better than getting it all from the taxpayer. We have to do something. This is money that’s not going to cost us anything.”