Chicago selects Bally’s as the city’s sole casino

May 5, 2022 5:34 PM
  • Buck Wargo, CDC Gaming Reports
May 5, 2022 5:34 PM
  • Buck Wargo, CDC Gaming Reports

Chicago tapped Bally’s Corp. Thursday as the sole license holder to develop the city’s casino resort and entertainment experience on the site of the Tribune Publishing Center. The selection comes 30 years after Chicago officials first broached the subject of having a casino in the heart of the city.

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The proposal from Bally’s entails a $1.7 billion hotel-casino project on a portion of the current industrial Tribune Publishing Center located on the Near North Side in the River West neighborhood near Halsted Street and Chicago Avenue. The casino will be large enough to house 3,400 slots and 170 table games.

The project also includes a 3,000-seat theater, an exhibition experience, an extension of the Riverwalk, pedestrian bridge, 500-room hotel tower, outdoor park, outdoor music venue, amenity terrace featuring a large pool spa, fitness center, and sun deck, and six restaurants, cafés, and a food hall.

Bally’s Corp. projects the development will add more than 3,000 construction jobs annually and 3,000 permanent casino jobs.

“Bally’s Corporation will create a world-class entertainment district in our city that will delight residents and tourists alike,” Chicago Mayor Lori E. Lightfoot said in a statement. “Following significant analyses and community input on all aspects of our three finalists for Chicago’s casino license, the selection committee and I have chosen Bally’s to move forward in the development of the City’s first integrated casino resort. We are confident that Bally’s Tribune Publishing Center development will shore up the city’s pension funds, create thousands of good-paying jobs, and lead to a bright financial future for our city.”

Bally’s project won out over two other finalists. The Hard Rock at One Central by Hard Rock International would have been adjacent to Soldier Field and McCormick Place. The other, Rivers at The 78 by Rush Street Gaming, would have been located on the south branch of the Chicago River.

Soo Kim, chairman of Bally’s Corp. Board of Directors, called it a “tough, but fair” request-for-proposal process in which they were ultimately selected. “Chicago is a unique and vibrant city, deserving of a world-class gaming and entertainment destination that is of, by, and for the people by driving the local economy, supporting local labor, creating multigenerational wealth for minority investors and showcasing the best of what the City has to offer,” Kim said.

Lawrence S Shen, CFA, a principal at C3 Gaming that did the revenue forecast, financial pro-forma, and economic-impact study for Bally’s, said they were confident in the numbers and projections they submitted with the bid. The city is concerned about the revenue projections, economic impact, and employment opportunities it will create, he said. “Bally’s excelled at these and our numbers matched up very well with the evaluator, Union Gaming, hired by the city,” Shen said.

“We’re doing backflips,” added Gerard Parisi, a principal at C3 Gaming. “We’re absolutely elated.”

The Chicago casino will be subject to a higher gaming tax than the one paid by Hard Rock in northern Indiana and Rivers Casino in the northern suburb of Des Plaines, Shen said. “We crafted a tax memo that has been quoted frequently and mentioned by Mayor Lightfoot giving a huge competitive edge for Bally’s,” Shen said. “Bally’s will be fully committed to making as many tax dollars as possible for the city.”

Casino consultant Brendan Bussmann, managing partner of B Global, said selecting Bally’s makes it a big day for Chicago. He called it a “first test” to develop a new resort in a “very challenging environment, but clearly their proposal rose to the top.

“I have always thought that the Tribune site was a good site for this opportunity, but they still face the NIMBY factor that will have to be overcome when the Council approves the recommendation from Mayor Lightfoot,” Bussman said. “While Chicago is a great city, there will continue to be challenges to make this work, as there is little room for error between the tax rate, operational environment, and commitments to the city. From the initial outset, though, there seems to be a strong commitment from community leaders to get behind this effort and make it a success.”

Now that Bally’s has been selected, a comprehensive Host-Community Agreement will be negotiated. The Agreement will then be evaluated by a special aldermanic committee. The entire City Council will be involved in the process for the final recommendation.

The formal development process will begin following approval from the City Council and the Illinois Gaming Board.

The announcement was greeted with plenty of excitement, thanks to its projected economic impact on the city and tourism.

“This casino will be an economic boon for Chicago,” said Glenn Eden, Board Chair of Choose Chicago, the official destination-marketing organization for the city. “It’s another avenue to bring visitors to our great city.”

Chicago has experienced a strong recovery from the pandemic, on the heels of being voted Best Big City in the U.S. for the fifth year in a row by Condé Nast, Eden said. Additionally, Chicago hosted an estimated 1.35 million for meeting and convention attendees over the past year, with an estimated $1.26 billion in economic impact.

“During the pandemic, the hotel industry has been impacted more than any other industry,” added Michael Jacobson, President & CEO of the Illinois Hotel and Lodging Association. “As we are starting to see an increase in hotel occupancy, this news contributes to the light at the end of the tunnel. Chicago’s hotel industry unequivocally supports a Chicago casino and we are ready to welcome visitors from day one. We applaud Mayor Lightfoot and her team for shepherding this process, selecting a casino that will employ thousands of women and men for years to come. This transformational economic development project supports not only the hotel industry, but also the city of Chicago in continuing to be the tourism beacon in the Midwest for conventions, entertainment, gourmet foods, sports, and as of today, casinos.”

Chicago officials said they selected Bally’s Tribune proposal because it met or exceeded core goals outlined by the casino-selection committee.

Bally’s offered the strongest overall financial offer to the city, officials said, providing a $40 million payment at the time of signing the Host-Community Agreement, along with $4 million annually thereafter. Bally’s also made the highest minimum-capital commitment to the project and is the only submitting operator that did not have a competing casino in the region.

Bally’s has completed an agreement with organized labor, which the city said it deems necessary for this process to move forward. Bally’s will commit to 60% minority hiring and will create a jobs program specifically targeting neighborhoods with the highest levels of unemployment and lowest income. The jobs program also will include clear career pathways for upward mobility, city officials said.

Bally’s also tendered a unique proposal concerning equity through a crowdfunding initiative, which includes the ability for small investors to leverage up their investment with non-recourse debt, city officials said. The casino will create opportunities for small local restaurants and businesses to have opportunities in the casino.

The casino is proposed for a site that sits within an important land-use transition zone, with several existing large-scale industrial and commercial facilities nearby that will continue to provide critical services to the city, officials said.

Bally’s will be purchasing the entire Tribune site and is flexible in how the other parcels within this planned development can be redeveloped; the company has committed to taking input from the community for these pieces.

Bally’s anticipates operating a temporary casino at the Medinah Temple, city officials said. This site was chosen due to its proximity to major transit and retail/hospitality corridors, as well as its ability to assist in the city’s post-COVID revitalization.

“A Chicago casino will provide a real boost to the city’s revenues, supporting police and fire pension funds, as well as to the state’s revenues with $200 million to support capital-improvement projects statewide,” said Illinois Municipal League Executive Director Brad Cole. “Even more importantly, the casino will create thousands of new jobs and repatriate gaming revenues going to fund Indiana essential services. This is clearly an important project for both the city and the state.”