Chicago casino bids are mediocre-Lightfoot should start over
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In 1992, Chicago had the three largest, publicly traded gaming companies and the Pritzker family (Hyatt Hotels) together promising to invest a total of $2 billion (about $4 billion today) of private funds in downtown to create a spectacular entertainment economic engine that would have spun off huge collateral benefits for the region, far eclipsing the projected gaming tax revenues.
The editors of Chicagomagazine asked the Pulitzer Prize author and guardian of Chicago’s civic vision, Lois Wille, to evaluate the proposal, certain she would pan the concept. In her October 1992 article, "The Case for Casinos," Wille not only embraced the urban entertainment district proposal as we envisioned, but also implored Chicago’s leadership to pursue and implement it as something of which citizens could be proud.
Now, 30 years later and more than two and a half years after legalizing a casino license, the city has only been able to attract three mid-tier gaming operators lacking national and international prestige offering up five poorly conceived site proposals from which to choose. While the economics of the gaming market have certainly changed dramatically in the U.S. since 1992, each of the 2022 proposals offer up less than half of the level of private investment we had commitments for back then.
Has Chicago’s draw, appeal and stature as a world-class metropolis actually fallen that dramatically? Or is it because its political, civic and business leadership have simply failed to live up to the bold tradition and skill of their predecessors?
If the city accepts any of these proposals, it is admitting that Chicago has indeed diminished in stature and potential since 1992. Perhaps more concerning is that if there is no longer the voice and guidance of the business and civic leadership who championed transformative investments like Dearborn Park that truly did reverse the suburban-flight facing urban centers like Chicago in the late 1970s, then the future of this great city is indeed dire.
I lobbied enthusiastically for the Chicago casino for almost three decades alongside the Chicagoland Chamber of Commerce under the late Jerry Roper’s lead and numerous other business and civic organizations because we believed that done right and properly conceived this should as an economic development catalyst rather than merely a politician’s tax revenue cash cow. We unabashedly professed then and now that if Chicago won’t or can’t do it right, it absolutely should not do it. The results of doing it wrong would be extremely damaging. Chicago as a community needs to decide now if they want to actually do it right.
The urban environment and dynamics of the Chicago of 1992 and the Chicago of 2022 are obviously different in many ways, though perhaps more challenging now. Regardless, a properly conceived and implemented Chicago casino could be the timely and transformative spark for much-needed city-building development for Chicago and the region. The solution is not difficult to envision, but requires strong leadership, guidance and collaboration from both the public and private sectors—which to date appear to be lacking.
Here is a way forward to achieve something of which all of Chicago can be proud, recognizing that sometimes one needs to take a reflective step back in order to make the best step forward:
- First, reject all five current proposals on two important criteria: 1) none have a world-class gaming company as casino operator, which seriously limits the potential for both revenue and collateral economic development, and 2) all of the sites present significant adverse impacts to the vitality of downtown since they would necessarily suck business and life out of existing theater, entertainment, retail and lodging venues downtown. Merely looking at where and what the three gaming operators have developed elsewhere (which in many cases is competing with Chicago) is also sufficient reason to reject all three as viable partners for the world-class development that Chicago should needs.
- Next, a business/civic leadership group or consortium of groups should partner with the city and prepare a new strategy to rewrite and reissue the request for proposals in order to successfully attract top-tier, world-class gaming groups who can bring broader economic development to Chicago. This would result in a more strategic RFP approach to reduce/remove the aspects of the initial RFP’s deal structure that caused the best gaming companies (like MGM Resorts) to pass on submitting. The city’s failure to craft a well-conceived and enticing RFP is apparent in the responses it received even after having to extend the deadline several months to attract interest. The notion that a casino and world-class entertainment district belongs in a residential neighborhood rather than in the heart of downtown, where it would leverage and enhance Chicago as a world-class entertainment destination, is simply wrong. The fact that the city’s RFP did not provide the civic and urban planning guidance nor any vision for the initiative, leaving respondents to guess and determine on their own, doomed the process from the outset. And beyond physical planning, the city should have explored creative avenues to structure the gaming deal, including potentially as a gaming management arrangement paired with a nonprofit development consortium which would oversee the broader economic development as a sustainable civic and economic development endeavor. (One should look at how the South Loop was successfully redeveloped via the Dearborn Park Corporation.)
- Then, this leadership team should help the mayor and governor recast the Chicago gaming license as something much more important and precious than the Rockford, Waukegan or Southtown licenses, which it truly is and deserves to be treated as such. Such an effort could also get the city and state to realize that there is a far bigger return and value in precipitating sustained, broad economic development from the project versus solely focusing on an onerous tax structure. Also, our previous proposal was a consortium of four well-capitalized casino/entertainment operators providing four “brands” for Chicago, each of which offered its own loyalty and customer base. The Chicago market is still strong enough to benefit from a similar consortium or partnership to make it a must-visit destination with far more national and global reach.
Approached in this manner, the business/civic leadership (and the mayor and governor) would likely realize that the grand slam home run for Chicago is for the state and city to partner and do this in the Central Business District like the Thompson Center with the state as “landlord” and city as “tenant.” Such a unique, collaborative structure (with the backing and business-friendly framework the civics involvement would provide) would attract world-class gaming companies to the table who would aggressively compete for the downtown Chicago gaming management franchise contract by offering amenities like guaranteeing new conventions, or offering a permanent year-round Cirque du Soleil venue downtown, or finally providing the city’s languishing theater district with product and programming to attract city residents, suburbanites and tourists alike.
It could also result in more tax revenue to the city and state since, properly structured, it could minimize payments of federal taxes on the gaming revenue if the broader economic development effort is set up as an economic development nonprofit entity.
Most important, rather than creating a self-contained insular entertainment venue as each of the current proposals do, the Chicago casino needs to leverage the assets of its world-class downtown to create a dynamic and much broader entertainment district, drive business to our existing attractions, and serve tourists and residents alike. A center city location like the Thompson Center could utilize existing hotels, existing parking garages, existing Randolph Street theater venues, existing restaurants and existing State Street retail, resulting in a much broader and sustainable collateral economic benefit for the city.
While the Thompson Center site with its asset-rich context and infrastructure is clearly the best opportunity to leverage real and sustainable catalytic economic development for Chicago, other “heart-of-downtown” site options could be identified though a creative and strategic process from this economic focus, as well as help rethink how one or two of the current proposed sites could potentially be broadened to participate in some manner.
Chicago rebuilt magnificently after the 1871 fire to transform from a swamp into the nation’s scrappy but revered Second City; it reversed the flow of the Chicago River; it beat out the then-larger Milwaukee and Michigan City, which both had better natural shipping harbors; it knocked St. Louis out and became the rail capital of the U.S.; it hosted one of the most spectacular world fairs just 20 years after that great fire. To have to choose one of the five mediocre casino proposals that are before the city at the moment is definitely not maintaining Chicago’s great tradition of being the best.
Kimbal Goluska is a retired urban planner, former partner at Skidmore Owings & Merrill and former principal at the Chicago Consultants Studio. In 2018, CCS was the primary strategic development consultant to the city of Springfield, Mass., in soliciting, negotiating and managing the implementation of proposals that resulted in the MGM Resorts downtown casino development in the heart of that city. Most recently, CCS also managed the redevelopment process that resulted in the rebirth of the historic Cook County Hospital.
