THIS MUSEUM WILL COST HOWMUCH?
Rahm’s financial plan for Lucas museum relies on city taxes, help from Springfield and a $ 743 million check from the ‘ Star Wars’ creator
Mayor Rahm Emanuel’s Hail Mary plan to demolish and replace McCormick Place East to make way for the Lucas museum relies on legislative approval of a complex financing scheme that calls for extending the life of entertainment taxes and having the movie mogul write a $ 743 million check.
The Illinois General Assembly, still embroiled in a marathon budget stalemate, would be required to do some heavy lifting to keep the Lucas Museum of Narrative Art in Chicago — and so would Chicago taxpayers.
The General Assembly would be asked to:
Authorize $ 1.5 billion in new financing for a Metropolitan Pier and Exposition Authority that maxed out its credit card to build a new hotel and a basketball arena for DePaul University that would double as an “event center” for McCormick Place.
That would allow the McPier Authority to issue $ 1.165 billion in new debt that includes the $ 665 million Lucas Museum and the $ 500 million McCormick Place expansion over Martin Luther King Drive, connecting the two newest McCormick Place buildings. The “bridge building” would include 250,000 square feet of space.
George Lucas would start things off by writing a $ 743 million check that would be placed in an escrow fund and used to make the first 15 years of debt payments.
The upfront grant would cover the cost of building the museum on a site that currently houses Arie Crown Theater as well as $ 35 million for in- kind services” to compensate McCormick Place for the use of Lakeside Center’s underground heating and cooling systems and the use of 1,000 subterranean parking spaces.
Extend for six more years a 2.5 percent hotel tax increase due to expire in 2060 and similarly extend tax increases on downtown restaurants, rental cars and airport departures. All of those taxes were used to bankroll previous McCormick Place expansions. Transfer the 2
percent hotel tax increase that financed construction of U. S. Cellular Field from the Illinois Sports Facilities Authority to McPier and extend the life of that tax increase from 2033, when the stadium bonds are due to retire, until 2066.
Authorize changes to the 2016 and 2017 “incentive payments” that McPier agreed to pay under terms of a 2011 settlement with the state. Lawmakers would then be asked to authorize a “continuing appropriation” to cover those incentives payments for 2018 through 2023, then end the obligation.
Deputy Mayor Steve Koch acknowledged that it’s a lot to ask from a General Assembly still embroiled in a marathon budget stalemate between Democratic legislative leaders and Republican Gov. Bruce Rauner over Rauner’s demand for pro- business, anti- union reforms.
But he argued that the deal is worth it to keep Lucas’ massive investment in Chicago and use the site change necessitated by a legal challenge as a vehicle to demolish Lakeside Center, open up 12 new acres of lakefront park space and create 1.5 million square feet of contiguous floor space at McCormick Place.
“The Lakeside building is 45 years old. It’s an architectural issue sitting on the lake, and it’s an old building. At minimum in the next five or so years, it’s going to need a $ 100 million- plus roof. It’s going to need $ 225 million or so over the next 15 to 20 years to keep it alive,” Koch said.
“This is an alternative to that. . . . Take advantage of the fact that the Lucases are willing to put up this money upfront. That gives us debt capacity for the next 16 years, which we otherwise wouldn’t have. Use that money to go do this bond issue that will finance both MPEA and Lucas. Then we can build this new campus” for McCormick Place.
Koch noted that the Lakeside Center is used for just six or seven shows a year, but they happen to be the city’s biggest, most important shows.
“We need to replace that space. You can’t just knock it down and forget about it. People have advocated that. That’s not realistic. It’s not going to happen. If we want to replace the Lakeside Building, you have to have alternative space. This allows us to replace it with a modern building that would be the largest single contiguous exhibition space on earth,” Koch said.
McPier CEO Lori Healey said the north end of Lakeside Center could remain in use until construction is completed on the “bridge building.” Lucas could begin construction on the south end immediately by demolishing Arie Crown The- ater.
McPier also intends to forge ahead with construction of a new parking garage at 18th Street and Lake Shore Drive.
The original deal to build the Lucas Museum on Soldier Field’s south parking lot called for the Park District to build that garage to replace lost game- day parking for Bears fans.
Now the McPier authority will take over those plans with Lucas someday adding a “more decorative pedestrian bridge over Lake Shore Drive.
Convention “customers will just be over the moon if this could actually happen because the space is contiguous. You’re not running back and forth between different buildings all the time. It’s a more efficient cost for them. This is much easier for contractors to set up and take care of when you’re putting a show together than going back and forth and moving product,” Healey said.
The deal also includes compensation for the Chicago Park District, which owns the land beneath the Lakeside Center and is due to receive roughly $ 50 million in rent from a lease that runs through 2042. Annual payments range from $ 871,000 this year to $ 3.2 million in the final year of the agreement, records show.