No gouging Olympic fans
Chicago hotels, restaurants and retailers would be subject to price controls during the 2016 Summer Olympic Games to prevent Olympic-sized price-gouging, under an agreement advanced Monday by a City Council committee.
And a $500 million guarantee against operating losses at the 2016 Summer Games -- reaffirmed by the City Council's Finance Committee under riskier circumstances -- would not be the only Olympic contribution from Chicago taxpayers.
Chicago 2016 President Lori Healey also disclosed plans to create a new tax-increment financing (TIF) district to generate the tens of millions needed to turn the soon to be closed campus of Michael Reese Hospital into a $1.1 billion Olympic Village.
Healey said the size of the subsidy would not be known until a developer is chosen. She would only say the city intends to "revise the boundaries" of the existing Bronzeville TIF and "re-constitute a stand-alone TIF for that development only." That would "re-start the clock" on the district's 23-year life.
"There are some very extensive infrastructure improvements that need to be undertaken. It's an old hospital. There's no streets. No roads. Sewer and water is inappropriate for a larger residential/mixed-use development. Those are absolutely appropriate public investments to be made with TIF funds," said Healey, the mayor's former chief of staff.
The "TIF-within-a-TIF" concept was first suggested by Ald. Toni Preckwinkle (4th).
"It'll promote development of the larger South Side. That's what we've used TIF for all over the city," the aldermen said.
The decision to impose price controls during a Chicago Olympics is designed to prevent hotels from making a killing at the expense of athletes and spectators.
Marc Gordon, president of the Illinois Hotel and Lodging Association, said a "formula" has already been negotiated "that our hotels are okay with."
"It's based on rates in the years prior and an increase of that rate," Gordon said.
He added, "Our community very much wants to get the Olympics. We worked out an agreement we thought was fair ... to entice the Olympics to come to Chicago."
Restaurants and retailers would also be prohibited from charging exorbitant prices.
As for the $500 million taxpayer guarantee, Healey insisted it was "highly unlikely" and "virtually impossible" that it would ever be tapped.
That's even though the moribund real estate market and design changes at a temporary Olympic stadium have removed a $225 million layer of protection insulating taxpayers. International rules changes also require the city to provide free transportation and medical services during the Games.
Agreements approved by the Finance Committee finalize the 500-page bid book that's already at the printer and due in the IOC's hands next month.
Among other things, Chicago promises to: implement an "Olympic lane system" on city-controlled streets; form an "Olympic Brand Protection Commission" to police "ambush marketing and illegal street vending" and guarantee that "all transportation infrastructure improvements" outlined in the bid be completed and "supported by necessary and proper financing."
The same language applies to Mayor Daley's massive O'Hare Airport runway expansion project. That's even though major airlines have not yet agreed to finance Phase Two of that project, let alone all of Phase One.