McCormick Place Convention Center will host a revamped Chicago Auto Show in July, the first large-scale event there since the COVID-19 pandemic forced the one of the city's prime visitor magnets to shut down.
Chicago Mayor Lori Lightfoot also joined Gov. J.B. Pritzker in setting July as the target to lift most pandemic restrictions across the city and state. That would help turn the tide for tourist-related tax collections that benefit government coffers as well as repay the Metropolitan Pier and Exposition Authority’s debt.
The “re-opening is a critical step toward our state’s overall recovery,” Pritzker said during a news conference with Lightfoot and MPEA officials.
Restoring conventions by the summer would also help keep in check the agency’s request for at least $15 million in state operating help for the fiscal year that begins July 1.
If business didn't resume until January, officials had warned that figure could balloon to $40 million. That’s in addition to a $15 million draw this year on the state sales tax backup pledged to bondholders to make up for lost revenues.
The auto show will run from July 15 to July 19 in a hybrid-indoor-outdoor mode with measures aimed at limiting congestion and a masking requirement. It sets the stage for additional events to resume but how soon remains unclear. MPEA officials have said many event planners have said they will reschedule but the agency has projected recovery will take several years.
McCormick Place has not hosted an event since March 6, 2019. The 230 cancelled events translate into a loss of $234 million in local and state taxes and $3 billion in economic activity from the 3.4 million attendees, MPEA Chief Financial Officer Jason Bormann told board members last week.
The agency collects taxes on food and beverages, car rentals, hotels, and taxi airport departures. It reports a $58 million operating loss for fiscal 2021. Tax collections so far are just $35.6 million, down 73% from last year.
MPEA expects to replenish a $30 million reserve and repay the $15 million state draw between 2023 and 2025, depending on the pace of recovery.
The fiscal 2021 draw was held in check due to the restructuring of $118 million of debt service owed for fiscal 2021. Another debt restructuring is expected later this year to reduce fiscal 2022 debt service demands.
The agency’s chief Larita Clark told the board last week she is “hopeful” lawmakers will sign off on the $15 million to $40 million operating subsidy for fiscal 2022 and reinstate another $15 million incentive grant that would go to attract shows.
The agency’s revised three-year financial plan incorporates an $89.3 million loss this year with overall three-year losses of $181 million now expected through 2023. Tax collections are now projected to total just $47.7 million for fiscal 2021, down $75 million for original projections. Fiscal 2022 were revised downward to $89 million and $129 for fiscal 2023.
MPEA carries ratings between BBB at the high end and speculative grade at the low end. Several are tied to the state’s ratings because the state must include an appropriation to free up tax revenue for debt service. With Illinois state ratings all at BBB-minus or equivalent, ratings notched below that have nowhere to be but speculative grade.
The agency’s campus houses the 2.6-million-square-foot McCormick Place Convention Center, the largest in North America, and the Wintrust Arena. One of two hotels on the campus just south of downtown Chicago remains open. The authority has about $2.8 billion of debt.
The state has remained in phase four — which limits gatherings to up to 50 or 50% of capacity — of a five-phase reopening plan but now expects to “bridge” to phase five as hospitalizations and positivity rates have fallen, Pritzker said. Statewide, at least 55% of individuals 16 and over and 79% of individual 65 and over have been at least partially vaccinated.
Following a 28-day period of continued stability or decline in key COVID-19 metrics, the state would then move into Phase 5, with all capacity limits lifted.
While Lightfoot and Pritzker have differed on the timing of some reopening and capacity restrictions, they are “aligned” on conventions. Both appoint members to MPEA. Under the bridge phase, conventions with the lesser of 1,000 people or 60% of capacity could occur. Lightfoot said Tuesday the city is also targeting July to lift capacity restrictions.
