News

Chicago casino developer makes $40 million ‘down payment’ as promised, but it’s a small dent in the city’s pension bills

Bally’s, the casino operator chosen to bring a gambling mecca to Chicago’s River West neighborhood, has made its initial $40 million payment to the city — money that is earmarked to help fill massive pension holes in future budgets.

Mayor Lori Lightfoot’s office was eager to publicize the payment this week, negotiated as part of the casino bidding process, as she kicks her re-election campaign into high gear. But even if the casino brings in the $200 million a year in tax revenue it’s expected to deliver later this decade, City Hall still faces major financial challenges down the road.

“This is the first down payment from the casino on the future of Chicago’s pensions and a clear indication of the City’s commitment to its hardworking public safety professionals,” Lightfoot’s office said in a statement. “In the years to come, the Chicago Casino is projected to bring hundreds of millions of dollars in revenues to the City, with many of those revenues earmarked for pensions.”

A Chicago casino had eluded mayors for decades but Lightfoot succeeded in convincing state lawmakers to award a coveted license to a city vendor, giving her by far her biggest legislative victory in Springfield and an opportunity to rake in millions in revenue for the city.

Lightfoot has sold the casino efforts as a way to fill the pension shortfalls, but as the city’s chief financial officer, Jennie Huang Bennett, conceded to aldermen weeks ago, the casino will pay for about 9% of the city’s $2.3 billion pension contribution. While that is a significant chunk of revenue, it will still require future mayors and aldermen to find money for city pensions and the budget, which could lead to property tax increases or expanded fees.

Some critics have questioned whether the casino will generate its estimated revenue and said the projections appear unrealistic.

The Bally’s casino — planned along Grand Avenue where the Chicago Tribune Freedom Center printing plant now stands — got an edge over two other finalists by offering a $25 million upfront payment to city coffers as an “impact fee.” Bally’s later raised that to $40 million.

Most Related Links :
honestcolumnist Governmental News Finance News

Source link

Back to top button