August 30, 2014
Chicago is losing its leading salesmen for conventions and trade shows — next to Mayor Rahm Emanuel.
Jim Reilly, CEO of the Metropolitan Pier and Exposition Authority, on Friday asked the McPier board to launch a national search for his successor.
Reilly’s resignation comes at a critical time.
Land acquisition, legal challenges and regulatory hurdles remain before construction can begin on a long-sought entertainment district around McCormick Place. It is to be anchored by a new 10,000-seat basketball arena for DePaul University that will double as an “event center” for shows too big for Navy Pier but too small for McCormick Place.
The project has been controversial, in part, because the city is devoting more than $100 million in tax-increment financing (TIF) funds to the project, $70 million of it to the DePaul arena.
“My goal is to complete the planning, zoning, land acquisition and contracting phases of the Entertainment District project, so that I can hand a clean slate to my successor,” Reilly wrote in a letter to McPier Board Chairman Jack Greenberg.
“With significant progress having been achieved or set in motion and with my 70th birthday just over the horizon, I am approaching a natural point in my career and in my life to look at a transition. I am therefore asking the board to begin a succession process, so that I may in fact move on to the next chapter of my life.”
In his letter to the board, Reilly referred to the $6 billion in new, renewed or extended shows that have committed to Chicago since he and Emanuel brokered a series of work-rule changes with McCormick Place unions after a judge overturned concessions mandated by the lllinois General Assembly.
That has allowed Chicago to blow past Las Vegas and move to No. 2 in the nation for conventions.
“The trade show industry greeted the reforms enthusiastically, rebooking virtually every show that had been at risk of leaving Chicago and booking dozens of new ones,” Reilly wrote.
“It became apparent we had a once-in-a-generation opportunity to take McCormick Place to the next level and build an even more powerful economic engine.”
In a news release announcing the resignation, Greenberg said the board would immediately launch a national search for Reilly’s successor.
“On behalf of the MPEA board, I thank Jim for the enormous contributions he has made and continues to make to the convention and trade show industry so vital to our city and state,” Greenberg was quoted as saying.
“He has provided invaluable leadership and talent in making McCormick Place the best convention destination in the world. All our directors appreciate the opportunity to work with Jim and have tremendous respect for his integrity and experience. He will be missed.”
Back in May, on the day the latest McPier expansion was announced, Emanuel and Reilly argued that they were not using public money to build a basketball arena for DePaul University as much as DePaul is “subsidizing” an “event center” that McCormick Place needs to compete, thus freeing millions to renovate Navy Pier.
Reilly said then that a consulting study commissioned by McPier concluded the arena will “break even” the year it opens and make $1 million in year five.
“I’ve read a couple people quoted on this. It’s like they were looking at this as just a college sports arena. That’s baloney. Yeah, there’ll be college basketball. But there will also be concerts and events. There’ll be general sessions. There’ll be trade shows. It’s the one piece this campus still needed,” he said then.
“McCormick Place needs the general assembly space. We couldn’t afford to build it by ourselves, just as DePaul couldn’t afford to build a basketball arena all by themselves. As much as anything, it comes closer to being the truth that DePaul is subsidizing us than vice-versa.”
The agreement calls for DePaul to contribute $70 million toward $173 million in construction costs and pay an annual rent of $25,000 a game for men’s basketball and $15,000 a game for women’s. DePaul will also get first right of refusal on available dates, but only after McPier blocks off convention and assembly dates it needs and presents the schedule to the university on April 1 of each year.
McPier officials 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.