CHICAGO -- A special gaming commission appointed by Mayor Richard Daley of Chicago unanimously recommended yesterday that the city and state of Illinois pursue casino gambling as a way to attract jobs and new tax revenues.
"We care deeply about Chicago and we cannot ignore a project that, according to the best independent estimate we have, will provide over 36,000 new jobs and over $500 million in annual tax revenues," said Nicholas Bua, the commission's chairman.
Mr. Bua was referring to an economic impact report prepared for the commission by the accounting firm, Deloitte & Touche.
The report found a single-site casino, hotel, and family entertainment complex in Chicago would generate more than $500 million in new tax revenues a year for Illinois and local governments. The report also estimated the complex would create 36,000 permanent jobs in the state, bring three million new visitors to the city each year, and result in a net annual increase of $3.7 billion in sales and expenditures in the state.
At a press conference yesterday, Major Daley reiterated his support for a casino and family entertainment complex in his city. And he called on Gov. Jim Edgar and the Illinois General Assembly to read a final report issued by the commission that lists a number of recommendations aimed at maximizing the positive economic benefits for Chicago, while minimizing any social or criminal risks the project may cause.
The legislature would have to approve land-based gambling and a 10% reduction in the state's gambling tax to accommodate a $2 billion privately financed casino and entertainment complex proposed to the city in March by Circus Circus Enterprises Inc., Hilton Hotels Corp., and Caesars World Inc.
But the gaming proposal has so far had a lukewarm reception among legislative leaders.
Gov. Edgar has expressed reservations about expanding gambling in Illinois. He reiterated his concerns yesterday, saying casino gambling could drain revenues and jobs from existing gambling operations in the state.
Steve Brown, a spokesman for House Speaker Michael Madigan, D-Chicago, said the speaker doubted a gambling bill would be taken up by the legislature during the spring session, which ends June 30, unless it has the governor's support. Major Daley said he has not yet decided whether to push for the legislation during the current session.
Mr. Bua said the commission was not recommending any specific proposal or site for the complex even though the report does refer to the proposal currently pending before the city.
For example, the final report said no public subsidies are contemplated for development and infrastructure costs associated with that proposal. One recommendation, however, calls for public ownership of the land on which the complex will be built "with financial and regulatory controls specified in a ground lease to the facility operators."
The lease arrangement for the land brought up the possibility that the city may issue bonds in conjunction with the complex, according to public finance and Chicago City Council sources.
One public finance source said the city could issue revenue bonds and use the proceeds to purchase the land. A casino complex would lease the land and then make lease payments to the city, the banker said. The city would use those payments to secure the bonds.
The source said bonds could also be involved in infrastructure improvements to the site. Under the commission's recommendations, the casino owners would pay or reimburse the city or state for the cost of improvements.
Mr. Bua said the issuance of bonds was never brought up during the commission's deliberations. Noelle Gaffney, a spokeswoman for the mayor, said it was premature to speculate on whether the city would issue bonds for the project.
In March, the mayor threw his support behind the concept of a privately financed casino and entertainment center, and in April he appointed a special committee of business people and lawyers to review the concept and make recommendations.
The casino project is one of Mayor Daley's plans to attract jobs and tax revenues to his city, which was forced to balance its $1.7 billion general fund budget for the current fiscal year with new and increased taxes and layoffs. The budget made no provision for employee raises, which are the subject of ongoing negotiations with labor unions.
In addition, Chicago faces the loss of $25.3 million in state income tax revenues this year if the Illinois Legislature passes the fiscal 1993 state budget proposed by Gov. Edgar.
