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Legislative Action

'McDome': Can it find quid pro quo?


Expansion of Chicago's McCormick Place Complex and the construction of a domed stadium for the Chicago Bears made their entrance on the Springfield stage May 10. The comprehensive project, dubbed "McDome," had been in the wings. It is expected to have a leading role in this month's legislative debate.

Board Chairman John Schmidt and Chief Executive Officer Jim Reilly, of the Metropolitan Pier and Exposition Authority which runs McCormick Place, showed the plans for the project and detailed the economic benefits of the expansion for an Illinois Senate committee of the whole. They cited the economic benefits but declined to talk price, pending a May 21 bid opening. To mention figures before the bids were opened would increase costs, they argued.

Schmidt and Reilly outlined for senators a study they commissioned that showed Chicago as the leading trade show and convention city in the country. The study also showed the No. 1 position under threat. Other cities are expanding convention facilities, while limited space has forced some shows out of Chicago. The report identified a lack of both exhibition and meeting room space in current facilities.

To maintain Chicago's competitive position, the authority has propsed:

Construction of an exhibition hall with 1 million square feet of exhibition space and 200,000 square feet of new meeting room space. The exhibition hall could contain clear floor space free of obstructions. There would be facilities for international teleconferences.

Conversion of the Aerie Crown Theater to 100,000 square feet of meeting space, allowing that facility to handle smaller assemblies up to 5,000 persons.

Construction of a 72,000- to 76,000-seat domed stadium, permitting the complex to host large religious assemblies, political or labor conventions and major sporting events.

Construction of a glass-enclosed galleria, sort of a linear atrium, to connect the various portions of the facility. The galleria would provide pedestrian access and would contain shops and restaurants.

According to the study, without the expansion McCormick Place will lose a portion of its share of the convention and trade show business. The total annual economic impact of an unexpanded McCormick Place will be a drop from $3.6 billion to $3.1 billion. With the expansion the economic impact will increase to $5.3 billion. The "with expansion" impact is $3.6 billion for Cook County and $1.7 billion outside of Cook County.

The same pattern holds for other economic measures. Annual attendee spending will drop from $824 million to $700 million without expansion, but increase to $1.2 billion with it. Employment will decline from 26,000 to 22,000 without expansion and rise to 38,200 with the larger facility. Wages would drop from $409 million to $354 million without expansion and increase to $599 million with it.

And then there are the taxes generated, an estimate likely to be closely scrutinized as proponents argue that the expansion will increase the tax base. The projected effects on taxes are:

Chicago without the expansion a decrease from $36 million to $30.7 million and with the expansion an increase to $55 million.

Cook County without the expansion a decrease from $30 million to $26 million and with the expansion an increase to $45 million.

Illinois without the expansion a decrease from $113 million to $97 million and with the expansion an increase to $ 167 million.

Total taxes would drop $25 million if the expansion does not take place, from $179 million to $154 million. If the expansion occurs, total state and local taxes would increase $88 million, from $179 million to $267 million.

Most of the legislative interest at the Senate hearing was focused on the domed stadium that would house the Chicago Bears football team. Schmidt and Reilly argued that the domed stadium was but a small part of the overall plan, and Schmidt said that portion of the plan would go forward only if the Bears agreed to help pay for it. Also to be considered is the December 31 expiration of a federal exemption allowing sale of tax-exempt bonds for the stadium.

"The Bears do not represent a reason for building a domed stadium,'' Schmidt told lawmakers. He said it made no difference economically whether the Bears played their games at Soldier Field or in a new stadium. The authority has asked the Bears to commit by June 1 to a lease for the stadium, a lease that would pay a portion of the interest costs. "The Bears, as we see it, are a way to reduce the cost of the arena," Schmidt told lawmakers.

What lawmakers did not hear from the authority was how much state money they want to defray the costs. That will be the ticklish question in a year that will see a number of state spending retrenchments. Schmidt and Reilly argued that until the bids are opened, costs should not be publicly discussed. The only number they mentioned was $250 million to $300 million for the stadium portion of the project.

Among the potential tax sources that have been identified to pay for the expansion is the legalization and state taxation of sports gambling. Rep. Zeke Giorgi (D-68, Rockford) has proposed to legalize betting on sporting events with the state keeping 20 percent of the bet. Also identified are increases in the hotel tax or levying an additional tax on restaurant meals in Chicago.

The odds seem long but lawmakers have approved similar legislation. In the 1986 "veto" session lawmakers traded support for changes in horse racing laws that allowed rebuilding of Arlington Park to gain approval of a new stadium for the Chicago White Sox. Two years later, with the Sox threatening to move to Florida, lawmakers approved a package to keep them in Illinois. There were no trade-offs in that vote; there was simply a push by the legislative leaders and the governor for the project.

McDome approval might come easier in the "veto" session after the November elections. Approval is unlikely, however, unless there are trade-offs with Republicans who want projects built outside Chicago.

30/June 1990/Illinois Issues

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