DePaul, Emanuel Unveil $173M Arena At McCormick Place; Scheduled To Open In '14
Chicago Mayor Rahm Emanuel on Thursday in conjunction with DePaul Univ. officially announced plans for a new $173M, 10,000-seat arena that will "serve as the home floor" for the school's men's and women's basketball teams, according to Eamonn Brennan of ESPN.com. Construction on the facility, which will be built across the street from McCormick Place, is "scheduled to begin in 2014, and the school is hoping to open in time for the 2016-17 season." The school will "pay rent at the building but will retain naming rights and permanent internal and external signage space." The new arena is "just one part of Emanuel's $1.1 billion 'Enhance Chicago' tourism and trade show infrastructure revitalization effort, a wave of planned redevelopment that will include nearby hotels, bars, restaurants and other entertainment." Those plans also include a $278M "update to the city's iconic Navy Pier tourist attraction, among other lakefront changes." DePaul has been "playing its home games at Allstate Arena" in Rosemont, Ill. since '80, and will play the '13-14 season on a "renewable one-year contract" with the facility (ESPN.com, 5/16). Emanuel said that having an arena will "enable the city to win small- to midsize conventions and meetings that now take a pass on the city." Leib Advisors Principal Bob Leib agreed that the size of the proposed arena may "fill a niche for Chicago, bringing in events that would otherwise be priced out of the market." Leib projected that it would "take about 125-plus bookings per year to break even, something that could be achieved within two or three years." Univ. of Texas-San Antonio professor Heywood Sanders said, "There is absolutely no evidence that arena facilities make a difference in the performance of convention centers" (CHICAGO TRIBUNE, 5/17).
PADDING THE COFFERS: In Chicago, Toni Ginnetti reports DePaul plans to "raise its share of funding through ticket sales, private donations -- with several major donors already committed and to be announced soon, through increased revenues that will come from the new television rights deal for the new Big East and Fox television, and through naming rights." Those rights will "include the facility itself as well as internal naming options for suites, some seats and locker rooms." DePaul will "get longterm tenancy in the arena with 30 dates for its men’s and women’s basketball teams, practice time and school graduations." DePaul President Dennis Holtschneider said that the school "considered the offer" from Bulls and White Sox Owner Jerry Reinsdorf and Blackhawks Chair Rocky Wirtz, who co-own the United Center, though it was "ultimately unworkable because of the lack of playing dates and practice times and for graduations" (CHICAGO SUN-TIMES, 5/17). In Chicago, Fran Spielman reports McPier officials, whose agency owns McCormick Place, "pegged annual operating costs at $3.7 million and estimated that the rent and non-logo-related concessions from DePaul games -- which go to McPier -- would cover one-third of that" (CHICAGO SUN-TIMES, 5/17).
DEAL DOUBTER: In Chicago, John Kass asks, "Why push for a DePaul basketball arena at McCormick Place?" That is "nowhere near the DePaul campus," and students would "have to take public transportation or drive, and then shell out cash to park." Kass writes of Emanuel's plan to build a casino in the city, "I don't think this has anything to do with basketball. Rahm needs that basketball arena as a music venue to make the casino work" (CHICAGO TRIBUNE, 5/17). A CHICAGO TRIBUNE editorial states Navy Pier and McCormick Place are the "twin engines of Chicago's tourism business," and the improvements announced by Emanuel with his "Elevate Chicago" plan are "crucial to the city's ambitions." But the arena is a "somewhat tougher sell." It is "clearly a good deal for DePaul," but "what do Chicago taxpayers get?" McPier CEO Jim Reilly estimated that the arena would "break even in its first year and net $1 million by year five." DePaul would "book the venue for 17 home games for its men's team and another 10 for the women's team, plus practices, graduation and other events." Emanuel stressed that the city also would "have use of the facility for school and sports events." The editorial: "If the venue is going to pay for itself, though, it's going to need a calendar crowded with bigger ticket events" (CHICAGO TRIBUNE, 5/17).