Halted for nearly a month in the wake of a river spill, demolition at the future site of the permanent Bally’s Chicago Casino complex resumed Friday after the city approved a new plan for razing the last vestiges of the Freedom Center.
Disappointing results from the first full year at the temporary Medinah Temple facility may make supplanting the former Chicago Tribune printing plant with the planned $1.7 billion gambling palace an even higher priority for both Bally’s and the city, which has reduced its casino tax revenue projection for 2025.
“Our focus is getting into the permanent, getting that done,” Chris Jewett, Bally’s senior vice president of corporate development, said Monday. “We’re happy that the demo has restarted.”
Demolition began in late August, but work ground to a halt Dec. 14 when a crane knocked down a low wall on the southeast end of the plant, spilling perlite, a volcanic glass used in construction, into the adjacent Chicago River. Videos and photos of the incident were shared widely on social media.
A river cleanup, a new strategy for tearing down the rest of the wall and a large barge docked by the building to catch any errant debris passed muster with the city. No fines for the demolition mishap were issued and what was once the largest newspaper printing plant in North America will soon be reduced to rubble, from which the state’s largest casino is to spring.
“Upon completion of a full investigation into the facts regarding the demolition incident … the city determined that there were no municipal ordinance violations,” a city spokesperson wrote in an email Monday.
The first phase of construction is set to begin in February — placing caissons in the ground as a foundation — and the planned casino and entertainment development on the 30-acre site in River West remains on track for a September 2026 opening, Jewett said.
Bally’s has been operating in a temporary casino at Medinah Temple in River North since September 2023, with revenue falling far short of projections last year despite ranking second in admissions among the state’s 16 casinos, according to Illinois Gaming Board data.
During an annual compliance review for Bally’s presented Friday to the City Council, city Chief Financial Officer Jill Jaworski said the lack of full amenities and onsite parking contributed to shorter stays at the temporary casino, resulting in gambling revenue that came in at about 52% of what was projected.
“One of the key takeaways that we really have from the performance of the temporary casino is that for a casino to really thrive, you need all of the other amenities that people expect from these types of places,” Jaworski said. “We continue to be very excited about the permanent casino, which is going to offer all the amenities and entertainment that you would expect when you go to a full-blown casino.”
In May 2022, Rhode Island-based Bally’s was selected to build Chicago’s first casino, besting proposals from finalists Rivers Casino and Hard Rock. The Bally’s Chicago proposal includes an exhibition hall, a 500-room hotel, a 3,000-seat theater, 10 restaurants and 4,000 gaming positions — twice that of any other casino in the state.
Last year, Bally’s had to relocate its planned hotel tower, which was shifted from north of the casino to the south after it was determined that driving caissons into the ground might damage municipal water management infrastructure pipes along the river.
At the presentation Friday, Jaworski said the city “will be issuing site plan approval” for the proposed changes.
“The updated design remains under review by the Department of Planning and Development,” the city spokesperson wrote Monday. “We will post more information as it is made available.”
The review covered everything from the temporary casino’s disappointing financial performance to the recently announced initial public offering to sell 25% of Bally’s Chicago to women and minorities to meet an equity requirement as part of the host agreement with the city.
The $250 million IPO offering features four classes of stock ranging from $250 to $25,000 per share, enabling “underrepresented communities” to become investors in Bally’s Chicago. Qualified minorities can apply online through Jan. 31, with the offering expected to close Feb. 7, according to the investor website.
Bally’s has spent $70 million to convert the historic River North facility, once the home of the annual Shrine Circus, into a temporary casino with about 1,000 gaming positions. The return on that initial investment has been less than expected.
In its annual budget, the city projected Bally’s would generate nearly $243 million in adjusted gross receipts at the temporary casino in 2024, yielding about $35 million in local gaming taxes.
Bally’s Chicago made it about halfway to the city’s target, generating $125 million in revenue and $16 million in local taxes last year, according to Gaming Board data.
Admissions to Bally’s Chicago ranked second in the state last year, with 1.36 million visitors.
At Friday’s presentation, the city scaled back projections for the temporary casino after last year’s shortfall, listing revenue as “to be determined” and $16.5 million as the updated local tax revenue target for 2025.
Before the temporary casino opened, the city’s six-year projection had Bally’s Chicago generating $254 million in adjusted gross receipts and $36 million in local taxes by 2025.
“The initial projections for FY2024 were made in advance of the temporary casino’s opening,” the city of Chicago spokesperson wrote Monday. “We now have over 12 months of actual revenue from the temporary casino’s operations and have adjusted our FY2025 expectations accordingly.”
Bally’s Chicago was projected to reach $805.6 million in annual adjusted gross receipts — the money kept after winnings are paid out — by 2028. That would create nearly $246 million in annual revenue for the city — assuming the permanent casino opens as scheduled in 2026.
The IPO prospectus remains similarly optimistic, projecting annual revenues of $800 million to $1.2 billion a year when the permanent casino opens.
The city is still banking on that.
“We’re expecting the permanent casino to generate hundreds of millions of dollars to support our police and fire pensions, to which our casino revenues are dedicated,” Jaworski said.
rchannick@chicagotribune.com