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Des Plaines puts money on casino kingpin
By James Kane | Daily Herald Staff

This is a rendering of what Neil Bluhm's proposed casino in Des Plaines might look like. The casino is in the center, with a parking deck on the left and a hotel that would be built in a later phase on the right.

 

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Published: 10/10/2008 12:14 AM

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When the Des Plaines City Council voted 6-2 Tuesday night to back Neil Bluhm's proposal to build a casino in the city, aldermen were backing a plan that could well be the winner in what will likely be another lengthy battle before the Illinois Gaming Board.

Last time around, Bluhm came in second behind Rosemont after a two-year effort, only to see the winning entry derailed after years of court battles over the legalities of how the license was issued. The state's 10th license for a floating casino had become available after a downstate casino folded. It's now available again, with bids due Tuesday, Oct. 14, and bids are expected for projects in several communities, including Rosemont and Waukegan.

This time around, Bluhm, a Chicago billionaire who is a major player in casino projects in Pennsylvania and Mississippi, said he has enlarged his site on River Road a little north of Devon Avenue by obtaining rights to buy property to the south and west of it - land he hopes to use for related development along Devon and River after the casino is built.

In addition, he cited the international financial meltdown as a factor that could hang more heavily over some competitors.

"We are in one of the worst financial crises since the Great Depression," said Bluhm, telling how he'd been called in to bail out a foundering casino project in Pittsburgh, putting in $200 million of his own money and drawing hundreds of millions from other investors. Bluhm, 70, said he's been involved in $40 billion of real estate projects in his lifetime.

Not all was roses, however. Most of the people in Tuesday's audience opposed allowing gambling in Des Plaines, citing the problems that gambling addicts bring to a community, and saying that gaming drains money away from other local businesses.

James Blue, head of a Des Plaines group called Citizens Against Gambling Expansion, pointed to an advisory referendum and a unanimous city council vote in the 1990s opposing gambling in the city.

Some say it's too late to stop gambling expansion, he said, but "it's never too late to hope the right thing will be done."

Confusion about bidding requirements and about the solidity of a second casino proposal for the city muddied the waters.

In recent weeks, Robert Kozonis, owner of the 50-acre O'Hare Lake Office Park, which is on the west side of the Tri-State Tollway opposite Bluhm's site, has said he's working with parties on a proposal for a casino there. His attorney asked the city council to stay neutral in the casino competition until official proposals had been made to the gaming board for vetting by the state.

City Attorney David Wiltse said it had been his understanding that any casino proposal had to have the support of the town where it would be located, but on Monday he learned that wasn't the case.

Given that, 5th Ward Alderman Carla Brookman and 7th Ward Alderman Don Smith favored taking a neutral stance.

Brookman was especially aggressive in her questioning, arguing that it was anti-competitive and not in the city's interest to pick a proposal now.

"Kozonis could have a cause for action," she said at one point. "It violates the fundamentals of fair bidding."

But Bluhm said his company, Midwest Gaming, wouldn't pursue a license without the city's backing, and several aldermen criticized Kozonis' unwillingness to reveal details of his plan before filing it with the gaming board.

Bluhm, questioning whether Kozonis really had an investor, spoke at length about his own plan, which he said he has spent $4 million and six years pursuing.

"You know we're tenacious," he said.

Brookman also challenged the size of the city's investment in the project. While the city won't pay anything out of pocket, it agreed to take $9 million a year from its share of casino tax revenue and give the next $9 million each year to Midwest Gaming until reaching $94 million in payments.

That's the same payment it agreed to last time.

That calculation will be based on what's left after the city gives 20 percent of gambling tax revenue to the 10 most economically disadvantaged towns in Cook County as a way to meet the state requirement that casino licenses be used to benefit disadvantaged communities.

In the competition for a license, proposals from Des Plaines and Rosemont are likely to have an edge because of their ability to generate revenue with their proximity to O'Hare International Airport and the Rosemont Convention Center.

In 2004, the winning firm, Isle of Capri, agreed to pay the state $518 million for the license. Midwest Gaming had offered $476 million.