Over Mayor Brandon Johnson’s objections, Bally’s is seeking a property tax break for its $1.7 billion River West casino and entertainment complex that could potentially save the gaming giant nearly $300 million over ten years.
Johnson and his Corporation Counsel Mary Richardson-Lowry argued this week that the host agreement with Bally’s does not include the lucrative tax break, and both the city and the company are bound by that agreement.
Ald. Gilbert Villegas (36th), chair of the City Council’s Committee on Economic and Capital Development, strongly disagrees.
He introduced the so-called “Class 7b” tax incentive at Wednesday’s City Council meeting and plans to join organized labor in lobbying for it.
“This is a $1.7 billion development. They’ve given $40 million up front. We stand to benefit from casino revenue, which ultimately goes to pay for our underfunded police and fire pensions. It’s in our best to get this thing going,” Villegas said Thursday.
“If there’s an incentive that they’re eligible for, then they should apply for it. The fact that there’s even any type of pushback on this doesn’t make sense.”
If approved by the City Council and Cook County Board, the property tax rate applied to the 30-acre River West site at 777 W. Chicago would drop from 25% of assessed value to 10% for a period of ten years.
The tax rate would then rise to 15% and 20% respectively for the final two years of the deal.
Sources close to Bally’s proposal said the company anticipates annual property tax payments of about $18 million per year on the permanent casino site with the incentive. That suggests Bally’s would pay about $45 million per year if they don’t get the tax break. That would mean a total savings of more $270 million over the next decade.
It’s not known whether Bally’s needs the tax break to start or construction or deliver the entire project with all of its amenities. But Villegas believes both threats are real.
“If they’re unable to get this project going or they’re unable to build some of these bells and whistles, ultimately that effects the revenue that is much needed to pay for police and fire pensions,” Villegas said. “I don’t want to take that gamble — no pun intended.”
Sources close to Bally’s said the company remains committed to seeing the project through and meeting a state-mandated deadline to open the complex by September, 2026.
“Any development of this magnitude must consider the economic development tools created and imagined by our elected officials for this exact type of project,” Bally’s corporate development vice president Christopher Jewett said in a written statement, pointing to the incentive approved for a quantum computing campus at the old U.S. Steel site in South Chicago.
“We are confident that our application is both permissible under the terms of the Host Community Agreement and demonstrates that we meet the standards for the classification,” Jewett said.
Zoning Committee Chair Walter Burnett Jr. (27th), whose ward includes the casino site, accused Bally’s of doing the legislative equivalent of an end-run around the local alderperson and the Johnson’s administration.
“This is something that just hit me all of the sudden,” Burnett said.
“They’re going around the administration and I don’t think that’s fair. The city is partners with Bally’s. They should talk to their partner and try to work this thing out….It shouldn’t be working outside of their partnership. It’s not respectable. It’s not right.”
A lobbyist for Bally’s met with the mayor’s office about legislation for the property tax incentive between July and September last year, records show.
Sources said Johnson’s team initially indicated they’d support the measure, but insisted it would have to wait until after a grueling budget season that ended with the first-term mayor backing off a massive property tax hike, with unanimous pushback from an emboldened City Council.
Former Mayor Lori Lightfoot’s office had projected Bally’s to pay $49.4 million in property taxes with the launch of the permanent casino in 2026, rising to $67.6 million in 2027 and $86.4 million in 2028.
Last week, the Johnson administration on Friday defended Bally’s even though the gaming giant’s temporary casino at Medinah Temple has so far delivered less than half the jackpot the city anticipated to bail out police and fire pensions.
Chief Financial Officer Jill Jaworski said then Bally’s potential to become the cash cow that Chicago needs it to be can only be judged once the River West complex with “all of the other amenties you would expect from a full-blown casino” is opened in River West.