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Des Plaines wins 10th casino license
By Rob Olmstead | Daily Herald Staff

Artist rendering of the proposed Des Plaines casino

 

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Published: 12/22/2008 11:52 AM | Updated: 12/26/2008 11:59 AM

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The village of Des Plaines and Midwest Gaming - they're not Rosemont and they're not Waukegan Gaming.

And that, it appeared Monday, was enough to tip the scales in favor of the Northwest suburb and the Chicago-based company, who were named winners of the state's 10th and last casino license. Illinois Gaming Board members picked Des Plaines by a 3-1-1 vote, with one member voting for Waukegan and another contending all three bidders should be rejected.

Board members made clear that Des Plaines and its casino company, Midwest Gaming, did not represent the highest bidder, nor the best-financed offer, nor the most economically disadvantaged host city, nor even the most employee-friendly company to make an offer.

But what it lacked in those attributes, the Des Plaines bid made up for in keeping its nose relatively clean over the years and providing an alternative to the village of Rosemont and Waukegan Gaming, both of which came under fire by board members in announcing their pick.

Rosemont's handicap is well-documented. Illinois Attorney General Lisa Madigan in 2004 alleged the town was tied to the mob. The late Mayor Don Stephens went to his grave in 2007 denying those accusations, but Madigan again in November raised concern about the suitability of Rosemont when the town made the list for the top three contenders for the license.

Board member Eugene Winkler was even more explicit.

"Organized crime still controls much of the life of the village of Rosemont," he alleged Monday.

"Their site is quite good," said member Charles Gardner. "Too bad it's in Rosemont."

Rosemont attorney Bob Stephenson declined to comment.

What the "shady" associations of Waukegan Gaming investors are, no one on the gaming board would say. But indicted political power broker William Cellini at one time was a part of the deal. Waukegan Gaming contends his interest was completely bought out.

Yet the board may have been squeamish about Waukegan because the legislature identified one investor as a witness it may wish to call at Gov. Rod Blagojevich's impeachment hearings and another's name came up in connection with former Blagojevich adviser Chris Kelly.

Investor Edward Duffy at one time represented Hawthorne Park racetrack and is one of a number of horse racing industry officials the Illinois General Assembly said in a letter to U.S. Attorney Patrick Fitzgerald that it "may wish to call" on the topic of federal allegations that Blagojevich tried to strong-arm the horse racing industry for donations in exchange for signing a bill that gave racetracks a cut of casino money. The legislature was clear in the letter, however, that it was in no way accusing those potential witnesses of any wrongdoing.

Duffy told the Daily Herald that he is "certain" his involvement in the casino proposal was of no concern to the gaming board. Further, he noted that the legislature's list was very broad, and he may have been included because the House panel mistakenly thought he represented Hawthorne at the time the bill was pending.

In fact, Duffy said, he ended his representation of Hawthorne in the spring, long before the bill passed, and the only involvement he had in the issue was to answer a call from state Sen. Terry Link, who wanted to know if Waukegan Gaming had any objection to the bill. Duffy told him the group had none.

"I'd be more than willing to talk to (the legislature)" or anyone else, Duffy said.

Investor Michael Pizzuto is a board member of the State University Retirement System and was named to that post after a recommendation by former Blagojevich adviser Chris Kelly. Kelly and convicted Blagojevich fundraiser Antoin Rezko were alleged in Rezko's trial to have traded state board posts for campaign donations. But like Duffy, no wrongdoing was ever alleged in regard to Pizutto, who has given the governor a total of $6,300.

Waukegan Mayor Richard Hyde blasted the board's decision to overlook his community for the license it hoped would speed up redevelopment of the town. His city will press on without the much-needed aid, he said.

"I'm not going to quit just because ... some people made a tremendous mistake," Hyde said.

Board Chairman Aaron Jaffe and members Charles Gardner and James E. Sullivan voted for Midwest Gaming's Des Plaines proposal, with some candidly admitting that Trilliant Gaming of the Rosemont bid offered more money upfront - $435 million. Midwest offered only $125 million upfront, but Des Plaines sweetened the pot for the state, offering to forego $300 million over the next 30 years in local tax receipts. Trilliant also had better financing, with half its bid in cash and financing for the rest. Midwest, by contrast, offered only about 20 percent down and will finance the rest.

Many board members, including Joseph Moore, who voted for Waukegan, cited the town as the only one of the three that actually meets the definition of a depressed community, one of the legislature's criteria for awarding casino licenses. It also had the added benefit of likely drawing away fewer gamblers from Elgin's casino.

"It just doesn't make sense," said Elgin Mayor Ed Schock of the board's decision. "It's not a question of sour grapes; it just doesn't make sense, from any point of view."

While he may not have gotten a ringing endorsement from the gaming board, Neil Bluhm, head of Midwest Gaming, was pleased nonetheless.

"We're thrilled. We're very pleased. We've worked on this for five years," said Bluhm.

Des Plaines is estimated to receive about $25 million a year in local taxes from the casino. That will be reduced by the $10 million a year it must now give the state as part of the deal. Of the remaining $15 million, 40 percent will be given to 10 to 25 economically depressed towns, leaving Des Plaines with about $9 million a year.

Des Plaines Mayor Tony Arredia said he was sure all along his city would get the license.

"I told other mayors, pretty much anyone who was around me, that I was pretty confident. - If you're expecting a lot of people, we're the best location," Arredia said.

Des Plaines' location fronts both River Road and the Northwest Tollway. But don't look for the dazzling lights of a new casino any time soon. Midwest Gaming and the town must first survive a state suitability investigation, which could take about a year. After that, construction of the casino will take another 15 months.

The gaming board's fifth vote, Eugene Winkler, an anti-gambling Methodist minister, said he refused to vote for any of the three proposals.

"The one of the three applicants that is the least tainted has also been the most difficult to deal with. The arrogance of Midwest Gaming is palpable," Winkler said. "Mr. Bluhm is a smart businessman, but he also wants everything done his way. His proposal would rob the city of Des Plaines of $10 million a year in revenue, $300 million over the next 30 years. Moreover, Mr. Bluhm and his cohorts were more than evasive when questioned about sources of funds, labor unions, part-time employment and health and pension benefits for employees."

The casino will feature 50,000 square feet of gaming space, four restaurants, a hotel and 1,700 parking spaces in a garage. More restaurants, additional hotel space and retail shops are planned in later phases of development.

• Daily Herald news services and staff writers John Patterson, Sheila Ahern and Lenore Adkins contributed to this report.