Thursday, March 15, 2007

Crain's | McPier Funding

McPier plans to help fund bid for Olympics: report

Crain's Chicago Business
March 14, 2007

(AP) — The government entity that controls Chicago's McCormick Place would help fund the city's 2016 Olympic Games bid with the sale of public assets near the convention complex, according to a published report.

The proceeds would come from the sale of air rights above land near McCormick Place, the Chicago Tribune reported Wednesday.

The city and the state run the Metropolitan Pier and Exposition Authority, known as "McPier," which oversees McCormick Place and Navy Pier. McPier also owns land and air space south of the convention center and along the south shore of Lake Michigan.

"We're committing our resources, which is the value of the air rights, to be used to support the Olympic effort," said Theodore Tetzlaff, chairman of McPier. "There's real value there that can be used, that we're prepared to commit to use, to make the Olympics happen."

The Tribune, citing unnamed sources, reported that potential investors have said in writing they would pay at least $100 million for the air rights, although the package's total value could rise to $125 million. The money would be used to help fund Olympic construction, the Tribune reported.

A McPier spokesman said Wednesday morning that the agency would comment on the situation later in the day.

The $125 million would be an important part of the financial plan for the Chicago games.

The City Council is scheduled to vote Wednesday on Chicago Mayor Richard Daley's request to put Chicago on the hook for up to $500 million if the games' operating budget lost money. Daley previously said no taxpayer money would be used for the Olympics.

The city has outlined a five-layer structure of financial guarantees to submit to the United States Olympic Committee. One of the guarantees, estimated by an organizing committee, is a budget surplus of $525 million.

Dana Levenson, the city's chief financial officer, has said the chance of city money being tapped is "practically nonexistent."

A message left at Daley's office was not immediately returned Wednesday morning.

The city is competing with Los Angeles to bid for the 2016 Summer Olympics; the United States Olympic Committee is to announce its choice April 14. The International Olympic Committee won't pick a host city until 2009; other bidders are expected to include Madrid, Rio de Janeiro, Rome and Tokyo.

Chicago has unveiled its plans to build a $366-million, 80,000-seat temporary stadium in a South Side park and a $1.1-billion lakefront athletes' village.

There has been no study on the value of the air rights. Also, there's no guarantee that the proceeds would have a value equal to $125 million needed for the Chicago games, said Renee Benjamin, general counsel for McPier.

No comments: