SPRINGFIELD, Ill. -- The Metropolitan Pier and Exposition Authority will be able to issue $935 million of revenue bonds next year to finance a 1 million square foot expansion of the McCormick Place convention center, under a plan approved by the Illinois General Assembly late Thursday.
Illinois lawmakers approved the bonding authority and a package of new taxes to service the bonds that also won approval from Gov. Jim Edgar, who said he will sign the bill.
"I believe the necessary safeguards have been built in, so that no state funds would ever be needed," the governor said.
The bonds will be backed by: new taxes on taxi, limousine, and bus rides from Chicago airports; a 6% car rental tax in Cook County; a 1% downtown Chicago restaurant tax; and a 2.5% additional Chicago hotel tax, according to the legislation.
McCormick Place officials estimated the new taxes raise $53 million for debt service in the first year and $93 million by the time the 20-year bonds are retired.
As additional security, a portion of the state sales tax will be pledged for debt service payments if the new taxes do not provide enough money in any given year, according to state Sen. Richard Luft, D-Pekin, the sponsor of the bill.
The votes in the House and Senate on the McCormick Place bill came near the end of a flurry of legislative activity that lasted all day Thursday and into Friday morning.
Legislators from rural Illinois first attempted to pass a McCormick Place bill that also included $350 million in water project and school construction bonds backed by revenues from video poker machines in taverns, but that bill was defeated.
Still, opponents of the expansion project said it was unseemly to approve the expansion project at the same time the state was struggling with a fiscal crisis.
Supporters of the project said the two issues were unrelated since only Chicago area taxes would pay for the project and that it was wrong during a recession to vote down a project that would create an estimated 11,000 permanent jobs.
"Appearances might not be correct, but sometimes you have to have the courage to do what is right," said state Senate President Phillip Rock, D-Oak Park. "We're trying to keep Chicago the number one convention center in the world."
Metropolitan Pier and Exposition Authority Chairman John Schmidt and Chief Executive Officer James Reilly watched the final voting on the package from the House gallery.
"I think it's remarkable that in this time of difficulty, the legislature was able to make this kind of investment," Mr. Schmidt said.
Mr. Reilly said the expansion is crucial to Chicago's remaining at the the forefront of the convention industry.
The legislation does not take effect until July 1, 1992. Mr. Schmidt said bonds would be issued after that date and that ground breaking could take place in early 1993.
Mr. Schmidt added that the bond sale would be a negotiated deal but maintained that no particular underwriting team had been selected yet. However, the authority has been using Bear, Stearns & Co. as its financial adviser on the deal.
The legislature also approved a plan for the state to issue $35 million in bonds after July 1, 1993 to grant a subsidy to Illinois Power Co. to partially fund air pollution control scrubbers at four of its coal-burning power units.
Allen Grosboll, executive assistant to the governor, said the subsidy will allow the utility to receive more than $100 million in federal funds for the installation of the scrubbers.
The scrubbers will allow the utility to burn high-sulfur Illinois coal, rather than lower-sulfur coal.
The state budget approved early Friday also contains planned sales of $313 million of general obligation bonds and $342 million of Build Illinois sales tax revenue bonds this fiscal year.