Of the five proposals for a Chicago casino, the one that takes over the Lakeside Pavilion of McCormick Place looks promising. At first blush, this site looks like a win-win. It is a beautiful setting. And the building sits empty, crying out for repurposing. 

But the city’s history of bad deals and the terrible financial management of the Metropolitan Pier & Exposition Authority should give taxpayers heartburn. There are four specific measures Chicagoans deserve to ensure they aren’t hoodwinked by another poor deal.

But first, a quick refresher on the history of this beleaguered agency. 

The MPEA has a habit of making bad bets. Years ago it spent $43 million to build the “Mayor’s Road” to take conventioneers from the hotels in Illinois Center to McCormick Place. Then it spent hundreds of millions building two hotels and the Wintrust Arena next to McCormick Place, making the road obsolete. When the convention center shut down during the pandemic, the 2,000 rooms in the hotels sat empty, too. 

Before the pandemic, the MPEA consistently ran operating deficits of around $100 million each year. To make up the difference, the entity taxes dining, hotels, taxis, rental cars and rideshares to the tune of about $150 million a year. But then comes debt service of more than $250 million, so overall it runs about $200 million short every year. In a world of Zoom and social distancing, the level of convention activity is likely permanently impaired, and utilization will take a sharp step down. All this results in debt that the special taxes can’t repay. Five years ago, the authority owed $4 billion in long-term debt. Five years later the total has risen to $4.8 billion. 

The casino opportunity comes in the wake of these poor choices. Those choices are made by a joint venture between the city and state, as the mayor and the governor appoint an equal number of MPEA board members. And in the eyes of the ratings agencies, the authority’s debt is ultimately a liability of the state.

Here are the four things responsible leaders owe the people of Illinois and Chicago before any deal advances.

First, the MPEA board needs to charge a casino market rent and use the proceeds to pay down debt. To quote a famous Chicagoan, the property is golden. What enterprise wouldn’t want to use such a setting, with all the parking and access? It is irreplicable. So let’s charge for it.  

Second, the state of Illinois should commission an independent study of the future of the convention center and its realistic future prospects. It should appoint an independent ad hoc board and not leave it up to the authority to trot out another self-serving economic study. The independent commission should hire independent consultants to do a realistic economic assessment, including other potential uses of the tax revenue currently directed to the convention center. 

This study group should also opine on the fate of the authority and its strategic direction. The MPEA board has proven for decades that they intend to expand indefinitely regardless of the economics. Who will rein them in?  

And finally, the governor must take the lead in deciding the center’s fate. Any mayor would love to give the property away and then skim off revenue and taxes to fill a budget hole. We’ve seen this before. This is a state problem—indeed, ratings agencies believe the state is ultimately on the hook for MPEA’s liabilities—and it should be dealt with independently by the General Assembly and the governor.  

Absent these four imperatives, taxpayers should fear the deal that will be cooked up. 

The worst deal would be for the MPEA to build out a casino and hotel, pile on more debt, and then sign a sweetheart lease. The second-worst deal would be for the developer to pay for the casino and hotel, and for the MPEA to lease the building for $1 like the Park District did for the Obama Center and tried to do for the Lucas Museum.   

While the public views the gleaming renderings of a beautiful casino complex, there might be some ugly dealings in a back room somewhere. 

If history teaches us anything, it is to beware.  

Ed Bachrach and Austin Berg are co-authors of “The New Chicago Way: Lessons From Other Big Cities” (Southern Illinois University Press, 2019).

An architect's rendering of the proposed Rivers Chicago McCormick casino

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