News for the Hospitality Executive
Investor Group Makes Pitch to Locate Illinois'
Tenth Casino in Waukegan
Tells Illinois Gaming Board Waukegan Site Would Generate More Tax Revenues
than Rosemont or Des Plaines
|CHICAGO, Nov. 25, 2008 - Locating Illinois' tenth casino
in Waukegan would generate more annual state revenue than a facility in
either Rosemont or Des Plaines and would best create the kind of profound,
long-term and sustainable economic development envisioned by state law,
gaming investors said today.
Investors in a proposed Waukegan casino also cited a market analysis showing that a casino in either Rosemont or Des Plaines would take a far greater bite out of state and local tax revenues generated by existing riverboats in Elgin, Aurora and Joliet -- with the resulting additional loss of jobs and casino contributions to social service agencies in those communities.
Waukegan Gaming LLC Principal Edward Duffy summed up the case for Waukegan in today's presentation to the Illinois Gaming Board, which heard from the three finalists seeking Illinois' 10th casino license.
"A Waukegan casino would generate the greatest annual net revenue increase to the state-more than either Rosemont or Des Plaines, which would siphon off a significant portion of patrons and revenue from existing casinos," Duffy said. "But just as important as the revenue generated is what you do with the economic development opportunity. We have partnered with a major, aging industrial city to provide concentrated economic development that will serve as a catalyst for further growth and reverberate throughout the region."
Waukegan Mayor Richard Hyde and the City's Director of Lakefront and Downtown Redevelopment, Robin Schabes, provided the Gaming Board with highlights of the city's $1.2 billion commercial, industrial and residential redevelopment plan.
The "Waukegan Vision," a 20-year plan adopted by the Waukegan City Council in 2003, would redevelop 1,400 acres of the city's lakefront and downtown and create new open space on the lakefront. Prepared by the Chicago architectural firm Skidmore, Owings and Merrill, the plan calls for 3,700 new residential units in four new lakefront neighborhoods and one million square feet of new commercial, retail and public open space.
Mayor Hyde told the Gaming Board that Waukegan's share of casino revenues, coupled with the spin-off effects of new investment and commercial activity related to the casino, could cut the 20-year timeline in half.
In addition to the economic impact that would echo throughout the region as a result of the casino and the downtown/lakefront revitalization, Waukegan plans to share 20 percent of its portion of gaming revenues with eight neighboring communities also suffering economic hardship: Park City, North Chicago, Round Lake, Round Lake Park, Round Lake Beach, Round Lake Heights, Beach Park, and Zion.
A market analysis conducted by Spectrum Gaming of Linwood, N.J. -- which conducts studies across North America for government regulators and gaming companies -- found that the Waukegan casino would be highest-grossing casino in the state in its first full year of operation, generating $379 million in gross gaming revenues.
The Waukegan casino would also generate nearly $200 million in additional state and local taxes during its first full year of operations, more than either Rosemont or Des Plaines after factoring in their negative impact on casinos in Elgin, Aurora and Joliet and the fact that Waukegan would attract far more out-of-state customers given its proximity to Wisconsin.
Another key factor in Waukegan's ability to draw a large customer base
is its ease of access from major highways. Spectrum Gaming Managing Director
Michael J. Pollock described the Waukegan location as one of the best he's
seen anywhere in the US.
Noting the heavy marketing campaign being waged by the Potawatomi casino in Milwaukee to attract Chicago-area customers, Duffy said the Waukegan casino would likely keep much of that revenue in Illinois. He also noted that Waukegan's more distant location would protect it -- and state tax revenues -- from the impact of a potential Chicago casino.
The Waukegan casino would be located in new Fountain Square mixed-use development, located on Illinois Route 120 between US 41 and the Tri-State Tollway. The casino site is 31 acres, giving it lots of room for expansion. The project includes a 50,000 square foot floating casino and 150-room hotel with amenities such as a fitness center, business center, a banquet center and meeting rooms, restaurants, retail shops and private clubs.
The Spectrum study reports that more than 1,200 fulltime jobs would be created at the casino and hotel, which would also generate more than 2,700 direct and indirect jobs across the economy. Waukegan gaming has pledged to hire at least 50 percent of its employees from Waukegan and its partner communities, giving preference to veterans and to those who have not been fully employed within the previous 12 months.
Highlighting the team's previous experience in leveraging gaming for economic development and social investment, Waukegan Gaming LLC Principal Charles Bidwill, III recounted the economic development success of the Casino Queen in East St. Louis, which he helped develop.
"In 1993, then-Mayor Gordon Bush asked us to build a casino in his community because no one else was interested. The town was bankrupt and couldn't provide basic services for its residents," Bidwill said in remarks prepared for delivery at the presentation. "Fifteen years later, more than $200 million has been invested in the East St. Louis riverfront and local gaming tax receipts of more than $160 million have helped the city regain its financial stability."
Duffy said the previous experience in East St. Louis helped guide Waukegan Gaming in the development of its social investment strategy. The strategy is designed to leverage casino construction and operations to create new career opportunities for the people of northern Lake County and business opportunities for minority and women-owned companies. African-American and Hispanic residents make up 79 percent of Waukegan's population of more than 93,000.
The social investment strategy also calls for establishment of a foundation to provide cash grants to local social service agencies and job training and mentoring programs to help employees advance their careers.
Also addressing the Board on behalf of Waukegan Gaming LLC were investors Lester McKeever and Jeff Parr. McKeever, heading up a diverse investment group, is a partner in the accounting firm Washington, Pittman and former chairman of the Federal Reserve Bank of Chicago.
Parr is co-CEO and managing director of Clairvest Group Inc, one of Canada's leading providers of equity financing to mid-market companies. Clairvest is licensed to operate casinos in Canada and South America and has $600 million of equity capital under management.
Waukegan Gaming LLC