With Chicago’s bond rating down to junk levels and the city going broke, is a downtown casino a gamble? Or is it a sure way to raise the millions of dollars in tax revenue the Windy City needs?
City property owners know they are facing a hefty property-tax hike next year. From a homeowner’s point of view, Chicagoans agree Mayor Rahm Emanual should do everything possible to raise the money needed to bail out the city’s $30-billion pension fund debt without hiking property taxes.
The city’s new junk-bond rating from Moody’s Investor Service applies to a whopping $8.1 billion in general-obligation debt, $542 million in outstanding sales tax revenue debt and $268 million in outstanding and authorized motor fuel tax revenue.
Experts say real estate taxes may have to be increased 40 percent or more to help pay down the debt. That means the $6,000 tax bill on a typical Chicago bungalow could jump to $8,400. This could force homeowners on fixed incomes into bankruptcy.
Landlords will have to pass along hefty rent increases to pay their real estate tax bills. It is possible that rent on a typical one-bedroom apartment in Lincoln Park could rise to an astronomical $2,362 a month from the current $1,680.
It’s no wonder every politician in Springfield is hoping to find a way to generate millions of dollars in revenue for the city and state without raising taxes.
The Chicago casino questions are many. How much tax money could the city and state of Illinois collect off of a downtown gambling casino? What does a new casino cost? Where’s the best place to build it? What is the impact on Chicagoans?
According to input and data presented recently at an Illinois legislative hearing by experts from the hotel industry, labor unions, race-horse breeders, video-gaming specialists, and saloon and bar owners, almost everyone sees a Chicago casino as a godsend.
The lobbyists testified that downtown gaming could help expand convention and tourist business with spin-off revenue flowing to hotels, restaurants, museums and Michigan
Avenue shopping generating up to $6.6 billion in annual revenue, with direct tax revenue of $3 billion to $4 billion to the city and state.
Building trade unions would love to see a $300-million casino erected in the heart of the Loop near Block 37 and the Cadillac Theatre to create thousands of construction jobs.
Other lobbyists wouldn’t mind seeing the casino at Navy Pier, near the new arena site at McCormick Place, or at the former Olympic Village site, formerly Michael Reese Hospital, where the city already has spent $100-million for site acquisition and development.
“Everyone wants a piece of the action because gaming profits are huge,” noted Roger Zak, a twice-a-week casino gambler who plays for entertainment and perks. “Three video poker machines in a Chicago bar can generate $100,000 in annual profit for just one small saloon keeper.”
However, with the city and state revenue needs so dire, why build a new casino?
The obvious solution is adaptive reuse of the existing original McCormick Place East building, which looks a lot like an aircraft carrier and already is anchored on the shore overlooking Lake Michigan. Move in 1,000 slots and video poker machines, add 200 manned gaming tables, toss in a few restaurants and bars and Black Jack Emanuel could be in business.
Dissenters to a downtown casino movement include other Illinois casino operators—especially the extremely profitable Rivers Casino in Des Plaines—which likely will lose market share when the Chicago venue opens. Of course, the Illinois Taskforce Against Alcohol Addiction and Gambling isn’t bullish on gaming downtown.
An estimated 25-percent of Chicago’s population are casino gamers or video poker players, and they are eager to line up for the action and the fun of downtown gambling.
“Everyone from Chicago will travel downtown to the casino,” predicts Zak. “It’s all about money. I’m betting on the Chicago casino, and the odds of it getting built are 100 percent.”
Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. For more information, visit www.escapingcondojail.com.