Bally’s Chicago is scrambling to find a new spot for its planned hotel tower at the Freedom Center casino site to avoid damaging city water pipes near the Chicago River.
The tower needs to be relocated from the north end of the site, and could be shorter, depending on the revised design, Bally’s Chairman Soo Kim said Wednesday.
“We need to come up with a different way to build a tower because we can’t now put it on Chicago Avenue,” Kim said.
The change in plans arose recently when Bally’s began a detailed exploration of the foundation it would need to erect a 500-room hotel tower along the river at Chicago Avenue, Kim said. After discussions with the city, it was determined that driving caissons into the ground might damage municipal water management infrastructure pipes.
Rhode Island-based Bally’s won a heated competition to build the Chicago casino at the 30-acre River West site, which houses the Chicago Tribune printing plant. It received final planning and zoning approval from the city in December 2022 for an entertainment complex that included an exhibition hall, 500-room hotel, a 3,000-seat theater, 10 restaurants and 4,000 gaming positions.
The initial plan called for a 100-room hotel base near the Chicago River, with a gleaming 400-room tower built on top of it within five years of opening the permanent casino.
The two-phase hotel construction will look to shift the 100-room structure from the north end of the casino complex to the south, next to or atop the events center, Kim said. The second-phase 400-room hotel tower will also be relocated to the south or west side of the casino building, pending city approval.
“The proposed site plan revision is under review,” a city spokesperson said Wednesday.
Bally’s submitted the revised site plan to the city in December, which is focused on relocating the 100-room first phase of the hotel. Changes to the site plan, such as relocating the hotel, are allowed under the approved planned development and can be handled administratively by the city — without going back through the full planning and zoning process.
While the 400-room tower may be shorter if not located on top of the 100-room base, as originally planned, Bally’s will build the full 500-room hotel as agreed, Kim said.
“We still fulfill the same host community agreement,” Kim said.
Kim said the unforeseen water pipe concerns below ground represent a “force majeure” situation not contemplated when the original plans for the casino complex were approved.
Bally’s informed the city, which agreed that building the foundation at the approved spot would be too risky, Kim said. The casino company expects to finalize revised plans for the first-phase, 100-room hotel building “within weeks,” while a location for the tower may take several months to work out, he said.
Kim said the change in design will not delay the planned opening of the permanent casino in 2026.
“There’s no delay as long as we’re building the 100 rooms somewhere,” Kim said. “And the easiest place to build 100 rooms is on top of the existing structure versus trying to lay out new structures. The whole point of this minor change is so there’s no delay.”
Bally’s completed its $200 million purchase of the Freedom Center printing plant site from Dallas-based Nexstar Media Group in November 2022.
Last year, Bally’s agreed to pay Tribune Publishing, owners of the Chicago Tribune and other newspapers, $150 million to vacate the Freedom Center by July 2024. Tribune Publishing plans to relocate operations to the Daily Herald printing plant in Schaumburg, which it purchased for an undisclosed price.
Bally’s plans to break ground on the permanent casino this year.
Since opening the temporary casino in September, Bally’s Chicago has drawn nearly 350,000 visitors to Medinah Temple in River North, generating $30.4 million in adjusted gross receipts. That has produced nearly $3.9 million in state tax revenue and more than $3.1 million in local tax revenue over four months, according to Gaming Board data.
In addition to gaming tax revenue, Bally’s agreement with the city included a $40 million upfront payment in 2023, and an annual payment of $4 million every year thereafter.
For 2023, the city projected Bally’s would generate more than $100 million in adjusted gross receipts, yielding about $12.8 million in gaming tax revenue for Chicago — in addition to the $40 million upfront payment and other taxes. The temporary casino, which opened months later than expected, came up about $10 million short of the city’s projections.
This year, the city projected Bally’s would earn nearly $243 million in adjusted gross receipts, yielding about $35 million in local gaming taxes — the amount of casino revenue included in Chicago’s 2024 budget.
Bally’s Chicago is projected to generate $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 by year six — assuming the permanent casino opens as scheduled in 2026.