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Disgrace by the Lake: Graft Dooming McCormick Place

Crains Chicago Business 24 November 2009 One Comment

The chief executive officer won his post after raising campaign cash for disgraced Gov. Rod Blagojevich. The just-departed human resources director owed her job to a powerful state senator. Other top executives have long ties to Mayor Richard M. Daley’s political machine.

But the defection of two major trade shows this month and a deepening financial crisis raise questions about how well an agency run the Chicago Way can compete with more-efficient, warm-weather convention centers such as Orlando, Fla., and Las Vegas.

Despite the high prices it charges trade groups to stage conventions at McCormick Place, McPier doesn’t make enough money to cover its operating expenses or payments on its debt. Agency officials project operating losses will grow eightfold to $28.8 million in the fiscal year that started July 1. And the state of Illinois will have to fork over hundreds of millions of dollars in the years ahead to make up shortfalls in tourism taxes that were supposed to cover McPier bond payments.

These financial woes are particularly striking in view of McPier’s extraordinary fiscal powers and valuable assets. It has direct access to taxpayers’ wallets, collecting more than $100 million in taxes annually and borrowing $2.5 billion on the state’s credit. McPier generated $211 million in revenue in fiscal 2009, mostly from trade shows, tourist spending and hotel bookings. Some 2.3 million people attended conventions at McCormick Place, while 8 million visited Navy Pier.

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One Comment »

  • John Maynard Krebs said:

    McCormick Place would be a great site for housing terrorists. Close to the lake, easy for visitors. Could be an Economic Boom!

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