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Emanuel, business leaders make pitch for McCormick arena — and it’s a tough sell

Mayor Rahm Emanuel announces plans develop several hotels basketball arennear McCormick Place during press conference McCormick Place Chicago Ill. Thursday

Mayor Rahm Emanuel announces plans to develop several hotels and a basketball arena near McCormick Place during a press conference at McCormick Place in Chicago, Ill., on Thursday, May 16, 2013. | Andrew A. Nelles~Sun-Times Media

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Updated: June 18, 2013 8:23AM

Mayor Rahm Emanuel said Thursday he’s 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.

Down was up and up was down as Emanuel joined business and labor leaders at McCormick Place to begin the formidable job of selling the concept of using more than $100 million in public money to bankroll a 10,000-seat arena near McCormick Place. It will become the new men’s and women’s basketball home of the DePaul Blue Demons.

It’s a tough sell. Aldermen, union leaders and local residents have questioned the mayor’s priorities at a time when Emanuel is closing 53 elementary schools, phasing out the city’s 55 percent subsidy for retiree health care and using millions in overtime to mask a shortage of police officers.

“If DePaul was not investing $70 million as a major anchor tenant, we would have to come up with the resources [to build the arena and] I would not have the ability to transfer resources to Navy Pier and do the revitalization,” Emanuel told reporters at McCormick Place.

“There’s a huge market called medium and small conventions. We don’t even bid on ’em. We have nowhere to host ’em. . . . It completes the campus: More hotels, mass transit as a way to get here, an event facility, and yes, DePaul will be a major tenant, but another university in the area has also asked to be participatory. It creates huge opportunity and, more importantly, you could not do Navy Pier without their participation.”

McCormick Place CEO Jim Reilly said 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,” Reilly said. “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.

“McCormick Place needs the general assembly space,” he said. “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.

Contrary to City Hall’s initial claim, the Rev. Dennis Holtschneider, DePaul’s president, said the university plans to sell naming rights to the new arena to a corporate sponsor or a wealthy private donor.

“I’d like to keep our student tuition from rising. Any way we can keep the cost down so I don’t have to put this on student tuition is a wonderful thing,” Holtschneider said.

Earlier this year, DePaul turned down what Holtschneider called a “gracious offer” — but not a free one — to move Blue Demons basketball to the United Center.

The UC couldn’t offer DePaul practice time because of the conflict posed by “other tenants,” and Holtschneider thought it was a “difficult place to build a first-rate college program under those constraints.”

Holtschneider bristled at talk of a city subsidy to the nation’s largest Catholic University.

“We have negotiated as part of this deal 17 home games a year for our men, 10 homes games a year for our women and graduation. That’s about three more dates. There’ll be certainly some practice time,” he said. “You do the math. That many days and we’re contributing a third to the project. I would say there’s nothing about DePaul being subsidized here at all when you put those numbers together.”

Local Ald. Bob Fioretti (2nd) has accused the mayor of using public money the city doesn’t have to build an arena the city doesn’t need. He’s also underwhelmed by the $165 million face-lift that Emanuel is counting on to draw 2 million more patrons to Navy Pier, arguing there’s no “wow factor” and no new attractions.

Reilly begged to differ.

“Survey after survey over 17 years show people go to the pier, primarily to be on the pier and to walk out onto the water,” Reilly said. “Bob could say the same thing about Millennium Park. Unless there’s a concert going on, there isn’t anything special to do at Millennium Park. It’s just beautiful and people love being there.”

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