Bally’s, which got the green light from the City Council last month to build the Chicago casino at Tribune Publishing’s site in River West, is already a long way from opening its temporary facility in Medinah Temple by June 2023.
The Rhode Island-based casino company has yet to file an application for the Chicago casino with the Illinois Gaming Board. It took 16 months for the newest licensee – Hard Rock Casino Rockford – to get preliminary board approval and two years to open a temporary casino.
“We will be ready to file by the end of the month, hopefully,” Bally Chairman Soo Kim said Wednesday.
While Bally’s made the promised upfront payment of $40 million to Chicago last week with the signing of a host community agreement, it may fall behind on an ambitious regulatory schedule that includes securing of state approval and traversing the maze of city planning and zoning.
Kim, 47, founding partner of New York-based hedge fund Standard General, the casino company’s largest shareholder, said he felt “reasonably confident” that Bally would get Gaming Board approval in time to launch his temporary casino within 12 months.
Opening the permanent casino by the first quarter of 2026 could also be difficult, with continued opposition from neighbors and new questions about Tribune Publishing’s plans for its printing operations.
Tribune Publishing announced on Thursday that it was exercising an option to extend the lease of its printing plant, which is due to expire in June 2023, for a further 10 years. At the same time, Tribune’s parent company, the hedge fund Alden Global Capital, purchased through a subsidiary a number of former Gannett printing plants and signed a contract to buy the recently inactive printing plant from the Milwaukee Journal Sentinel in West Milwaukee.
“We worked with the parties to find a solution that works for everyone, ensuring that the print edition continues to serve our readers,” Par Ridder, managing director of the Chicago Tribune, said in an email. . “No decision has been made to move printing operations to Milwaukee.”
Once a Chicago-based casino operator, the Bally name was purchased in 2020 by Twin River Holdings, a Rhode Island-based public company, which owns and operates 14 casinos in 10 states. In June 2021, Bally’s entered Illinois with the $120 million acquisition of Jumer’s Casino & Hotel in Rock Island, which it renamed Bally’s Quad Cities.
Selected from three competing bids last month, Bally’s proposal to build a $1.74 billion casino resort in River West is expected to generate $200 million in annual tax revenue for the city, transform a 30-acre industrial site into a bustling entertainment destination and send the Chicago Tribune printing press racing from its longtime home along the Chicago River.
The city, which is banking on casino revenue to fill its gaps in public pension funding, directed Bally’s to the Medina Temple Building, a vacant River North landmark, for use as a temporary facility during the construction of the permanent casino. The state allows casinos to operate in a temporary facility for up to two years, with the option to request an additional 12-month extension, before opening a permanent location.
Turning the Temple of Medina into a Palace of Gambling by June 2023, however, might be a bit of a stretch.
Florida-based Hard Rock International, one of three finalists vying for the Chicago casino, submitted its application for a new casino in Rockford in October 2019. The Gaming Board did not grant preliminary approval until February 2021, and the temporary facility opened nine months. later.
Hard Rock Rockford obtained a full license from the Gaming Board in January, with a two-year window to build its proposed permanent facility on the site of the former Clock Tower Resort.
The Rockford casino, one of six created by a sweeping gambling expansion bill passed by the state in 2019, was the first to open. Casinos in the southern suburbs of East Hazel Crest, Waukegan, Danville and Williamson County all took more than a year to be deemed “preliminary” by the Gaming Board, a precursor to even opening a temporary casino.
As the last of six new casinos to seek approval, and the only one already licensed to operate in Illinois, the Gaming Board said the process may move a bit faster for Bally’s Chicago proposal.
“Generally speaking, having people and entities already licensed by the IGB could expedite processing,” Illinois Gaming Board Administrator Marcus Fruchter said Thursday. “But…every application is unique and the same entities, investors and structure that the IGB has authorized in relation to Bally’s Quad Cities Casino may not be identical to what Bally’s submits for its license application in Chicago.”
Bally’s has an option to buy the print shop site from Dallas-based Nexstar Media Group, the nation’s largest TV owner, which acquired it in 2019 as part of its purchase of 4.1 billion from Tribune Media – the former parent company of Tribune Publishing.
The plan calls for the demolition of the 41-year-old Freedom Center factory and the relocation of Tribune printing operations to make way for the construction of the permanent casino. But Tribune Publishing, owner of the Chicago Tribune and other major daily newspapers, may have other plans.
“A move out of the Freedom Center would require an extended planning effort and would be very, very expensive,” Ridder said. “The key point is that we have exercised the option to renew the lease at the Freedom Center.”
Tribune Publishing, which was acquired by Alden Global Capital in May 2021, is negotiating a 10-year lease extension for the plant through June 2033. In addition to the Chicago Tribune, the plant also prints The Wall Street Journal, The New York Times, Chicago Sun-Times and other newspapers.
If Tribune Publishing and Nexstar fail to agree on the extension of the lease, the case will go to arbitration, according to people familiar with the negotiations.
Nexstar spokesman Gary Weitman declined to comment.
Once Bally’s exercises its option and buys the site – pending regulatory approval – the casino company will become the owner of Tribune Publishing. Bally’s will then have the right to relocate the Tribune if it can find a comparable site for printing operations.
Bally’s plans to build a casino complex that would include an exhibition hall, a 500-room hotel tower, a 3,000-seat theater, an outdoor music venue, six restaurants and a gaming room with 3,400 slot machines and 170 gaming tables.
In October 2018, Tribune Media won approval for a planned 8.5 million square foot development on the site, including offices, a hotel and over 4,000 residential units. Bally’s 1 million square foot proposal would occupy 11.8% of the permitted floor space under the existing planned development.
The River North Residents Association, which represents approximately 23,000 people living near Bally’s proposed site, opposed the casino from the outset. Ahead of the city’s planning review, which includes a community engagement opportunity, the organization recently sent a letter to Bally’s, city officials and the gaming commission with a list of 42 ‘adjustments’ proposed in the plan.
Recommendations included an overall curtailment of the wider planned development, the elimination of a pedestrian bridge connecting the casino to Ward Park, and the replacement of a proposed outdoor concert venue with a “dog-friendly” park.
“You can’t reduce the negative impacts of a project like this to zero,” said Brian Israel, president of the River North Residents Association. “But we want to reduce them as much as possible.”
While Bally’s remains open to public comment on possibly refining the permanent casino proposal when the planning process begins, the city’s broader goals will take precedence, Kim said.
“I think the letter sent by the neighbors of River North reflects a very different view of what this project is supposed to accomplish than what the city wants,” Kim said. “The city wants to engage the more than 50 million tourists who come to Chicago, and neighbors are more ambivalent about that.”
Bally’s, which originally envisioned a low, windowless casino to replace the print shop, was encouraged to design a bigger, glitzier complex by the city, and had to purchase the entire 30-acre property from Nexstar , said Kim.
As such, Bally’s will have the option to develop or sell a large portion of the site not occupied by the proposed casino resort.
Kim said those decisions will wait until Bally’s has a finalized development plan for the casino approved by the city, leaving room to tweak elements as needed during the review process.
One possible option could be to allow Tribune Publishing to maintain its print operations at the site, taking advantage of what would likely be increased rent and a “greater revenue stream”, Kim said.
“I think the first choice would be to move them somewhere else,” Kim said. “I think the second choice would be to move them to another place on the site. And then the third choice is to build the casino around them.