Late last week, Chicago’s Mayor and Bally’s CEO announced that Bally’s had indeed been chosen to build a casino resort in the Windy City after reports just a day earlier denying a decision had been made. Insiders in all of the city’s major news outlets were sensing the direction of the breeze. It turned into a N’oreaster overnight, blowing away the competition to transform at least part of Chicago into a casino city after years of advocacy and opposition.
Mayor Lori E. Lightfoot announced that Bally’s Corporation would receive the sole license to build and operate a multi-faceted casino resort on the site of the Tribune Publishing Center in the River West area of the city on North Halsted Street and West Chicago Avenue.
A temporary casino could go up at the Medinah Temple, 600 N. Wabash Ave., with a planned opening of spring 2023 with the permanent facilities scheduled to open in late 2025 or early 2026. Despite opposition from local leaders near both sites the only further approvals needed before infrastructure and other permits are sign-offs by the Chicago City Council and the Illinois Gaming Board. No major opposition is expected to be seen from the two bodies.
However, leaders of the River North Residents Association said that their own internal survey of area residents indicated that more than 80% of the approximately 2,300 respondents were opposed to a casino development ‘in their backyard’.
Bally’s was the only one of three remaining competitors for the potentially lucrative license that did not already have a casino operating in the greater “Chicagoland” area. Hard Rock International and Rush Street Gaming were the other contenders.
Casino as an Economic Engine
The corporation agreed to provide $40 million in upfront payments to the city as well as an annual payment of $4 million to the host community. The city is anticipating as much as $200 million in revenues each year to help bolster pension funds for first responders like police and firefighters.
Another important check box that helped greenlight the iconic American casino brand’s momentum forward was an agreement with organized labor and a commitment to take input from the local community on how the property would be developed.
The current concept, some of it obligatory, is for the $1.7 billion casino resort hotel to include a 500 room hotel tower, 3,000 seat art and entertainment theater, an outdoor music venue, an outdoor park, an extension of the fabled Riverwalk, a pedestrian bridge, and an exhibition center to be operated by Immerse Agency. Additional amenities would include a terrace with a large swimming pool, sun deck, and fitness center as well as half a dozen eateries including a food hall, cafes, and restaurants.
The temporary casino could host as many as 800 gaming positions but would close prior to the central location opening under the current licensing proposal. Bally’s plans to install 170 gaming tables and 3,400 electronic gaming machines in the full-scale casino by the time the project is completed.
Bally’s has stated previously that it expects to see over 3,000 construction jobs annually until build-out and at that point, 3,000 permanent jobs would be created directly by the casino resort.
In addition to an agreement with organized labor that the city considered essential to a successful agreement, Bally’s has committed to 60% minority hiring and will create a jobs and training program aimed at neighborhoods with the lowest income and highest unemployment rates. None of the jobs are expected to be dead-ends with the company saying it planned to actualize the jobs program to offer upward mobility to participants.
Highlighting the Best of Chicago
Soohyung Kim, chairman of Bally’s said he plans to build an entertainment complex with the theme, “Best of Chicago”, and he says he is not worried about any increase in crime in the area.
According to an article in the Chicago Sun Times, he told the outlet in an interview Friday: “I grew up in New York City in the ’80s. I think people have to put it all in context”. He added a little further, “The antidote for crime is jobs, it’s economic activity, it’s people taking pride in their neighborhoods.”
When told that some community leaders and residents in the River North area were concerned about a recent uptick in violence and had voiced strong opposition to any casino project under the impression that it would lead to more violence and other crimes, Kim reportedly said that was a “..a weird thought” as casino properties are highly secure with cameras almost everywhere.
In addition to the best possible capital package, jobs programs, and commitment to minority hiring, another element may have helped tip the balance Bally’s way – while they have no other gambling operations in or near Chicago, they couldn’t have any existing business conflicts, they have already been vetted by the state gaming board thanks to Bally’s owning the former Jumer’s Casino & Hotel in Rock Island, now known as Bally’s Quad Cities.
Bally’s Corp. chairman Soohyung Kim is also the founder of New York hedge fund Standard General which currently controls 20% of all Bally stock. In late January, Kim offered shareholders $2 billion to take the rest of the shares off their hands at a 30% premium from the trading prior to the announcement. His offer was rejected after the Bally’s board formed a special committee to assess the proposal.
Rather than accepting the offer, the board decided to spend some $300 million to $500 million on a stock buyback plan. Kim said at the time: “While we are of course disappointed with the outcome of the discussions of our proposal, as we said from the outset, we intend to remain a supportive, long-term investor in the Company.”
Source: Bally’s boss promises casino will showcase ‘authentic’ Chicago, Chicago Sun Times, May 06, 2022