Six months after rejecting a plan to turn the Lakeside Center into Chicago’s casino, McCormick Place is looking to redevelop all or part of the old convention facility into a new tourist attraction.
The Metropolitan Docks and Exhibition Authority, which owns McCormick Place, issued a request for information last week, inviting developers to submit ideas to “reimagine” the 51-year-old glass and steel showroom, an underutilized building. but architecturally significant in need of more than $400 million in deferred maintenance.
The redevelopment partner would operate the project to “enhance the experience” for convention attendees and visitors, drive economic impact and address needed renovations, without reducing existing space for the convention, according to the MPEA request.
“This is a unique opportunity for us to hopefully change the landscape of our part of the lakefront,” said Larita Clark, executive director of the MPEA. “But we also don’t want to miss any trade shows or meetings.”
Developers touted Rivers Chicago McCormick’s $1.3 billion bid to redevelop Lakeside Center as Chicago’s casino as an opportunity to reuse and renovate the building, and cover deferred maintenance. But the proposal was withdrawn from consideration in March after McCormick Place raised concerns that miss hundreds of scheduled events for the next decade that could not be accommodated without a replacement facility.
In May, Bally’s edged out other finalists with its proposal to build a $1.74 billion casino complex at the site of the Freedom Center printing plant in River West. Rhode Island’s publicly traded casino operator submitted your application with the Illinois Gaming Board last month, with plans to open a temporary casino in Medinah Temple by next summer.
Scott Goodman, founding director of Chicago-based Farpoint Development, a partner in the proposed Rivers Chicago McCormick casino, believes McCormick Place missed an opportunity at the Lakeside Center.
“Obviously we felt that the casino was a great catalyst for making the necessary renovations and upgrades and turning it into a complete entertainment complex,” Goodman said. “The city decided otherwise for the casino, but we still believe this is an iconic building for the city and deserves to be fully used and reused.”
McCormick Place hopes to find an alternative redevelopment plan that will revitalize Lakeside Center and attract visitors while complementing the central convention business. At this point, seemingly everything but a casino is on the table.
Clark said one idea that has been floated is to build an upscale restaurant or entertainment venue on the terrace of the Lakeside Center, overlooking the waterfront. The redevelopment partners will likely fund the project and enter into a revenue sharing agreement with the MPEA. Depending on the scope of the proposed project, the developer would also address necessary renovations as part of his plan, Clark said.
The primary goal is to create entertainment options for convention attendees that encourage them to stay on the McCormick Place campus between exhibits.
“It would be nice to have something in place where they can go and have a memorable experience,” Clark said. “When there is no convention that has rented the building, residents and tourists can enjoy it as part of the museum campus.”
The MPEA is a municipal corporation whose board is divided between appointees of governors and mayors. She owns McCormick Place, Hyatt Regency McCormick Place, Marriott Marquis Chicago, Wintrust Arena, and Navy Pier, which she leases to a non-profit corporation for $1 per year.
The original McCormick Place opened in 1960 and burned down seven years later. It was rebuilt in 1971 as the steel and glass Lakeside Center, now the oldest of four exhibit halls comprising 2.6 million square feet. Lakeside Center has 580,000 square feet of exhibit space in two halls, 141,000 square feet of meeting space, a ballroom, outdoor terraces, and the 4,192-seat Arie Crown Theater.
The four-story pavilion was designed by renowned architects Gene Summers and Helmut Jahn, and is considered one of Chicago’s “great mid-century modern buildings,” according to Preservation Chicago. But the building has seen better days and is in need of a new roof, parking structure repairs, exterior glass replacement, interior upgrades and other improvements.
Heywood Sanders, a convention expert and professor at the University of Texas at San Antonio, said Lakeside Center’s state is a reflection of both a declining industry and mismanagement by the MPEA.
“Deferred maintenance is a failure,” Sanders said. “Its performance as a host of conventions and trade shows has been very problematic.”
During the new millennium, Sanders notes that convention and trade show business at McCormick Place dwindled, before the pandemic, despite dramatic expansion of its facilities, including the opening of the West Building in 2007 and the Marriott Marquis hotel in New York. 2017.
In 2000, there were 49 conventions and trade shows, excluding public meetings and events, that drew 1.44 million attendees and used 13.9 million square feet of space, according to data obtained through a Freedom Act request. Sanders Information. In 2019, McCormick Place hosted 50 conventions and trade shows, drawing 825,113 attendees and utilizing 8.1 million square feet of exhibit space.
The economic engine of Chicago’s tourism industry, McCormick Place, was hit hard by the pandemic, with more than 230 event cancellations costing the city an estimated 3.4 million attendees and nearly $3.1 billion in economic impact. Since reopening in July 2021, McCormick Place has hosted 228 events, including gatherings, basketball games and other public events, drawing 1.65 million attendees, according to McCormick Place spokeswoman Cynthia McCafferty.
There are 31 events on the calendar for the rest of 2022 and 112 scheduled for next year, McCafferty said.
The McCormick Square hotel and convention complex generated operating income of $856,000 in fiscal 2019, but fell to a loss of nearly $73 million in fiscal 2021. MPEA lost $6.5 million in fiscal 2022, which ended March 30. June, and doesn’t project climbing back into the black until 2025, according to its three-year financial plan.
McCormick hotels were making money before the pandemic. Convention centers did not, losing nearly $45 million in fiscal 2022. They are projected to remain in the red until at least 2025, according to the MPEA’s financial plan.
McCormick Place has 250 events booked at the Lakeside Center over the next 10 years, putting the facility at approximately 50% occupancy. The industry considers 70% to be the maximum practical occupancy for a convention center.
The annual American Academy of Ophthalmology, expected to draw 24,000 attendees beginning Oct. 1, is the next major convention scheduled to use Lakeside Center.
While Lakeside Center is in need of repairs, Clark said it’s still valuable as a convention center, projecting an economic impact of $12 billion over the next 10 years. She said many of the events can’t be relocated elsewhere on campus, adding a layer of complexity to any full reuse of Lakeside Center. Replacing nearly 600,000 square feet of convention space would cost more than $1 billion and take years, she said.
Sanders said McCormick Place should think outside the box facing the lake and be open to other uses for a “distinguished piece of architecture on a critical piece of public land.” Replacing the convention space, he said, is not a priority.
The decline of the convention and trade show industry has accelerated during the pandemic, as hybrid events and virtual attendance gained traction, Sanders said. Convention business has been trending down for years in three of the four largest markets: Chicago, Las Vegas and Atlanta, with only Orlando showing profit through “pop culture” events like “Spooky Empire,” a Halloween convention scheduled for October, he said. .
With attendance steadily declining and the convention industry facing an uncertain post-pandemic future, Sanders said reducing exhibit space at McCormick Place may be the right move.
“Having seen their business systematically shrink, after doing all the things they said they needed to do to boost their business, I question their assertion that they need to replace any exhibit space they lose,” Sanders said.
The MPEA has set December 22 as the deadline to request information on the Lakeside Center redevelopment. It hopes to narrow down the submissions to two or three viable options and issue a request for proposals by mid-2023, Clark said.
Farpoint Development, which lost its bid to convert Lakeside Center into a casino, plans to enter the competitive process to rebuild the building.
“We have ideas for an adaptive reuse of the building that we’re looking at and trying to figure out if they’re economically viable,” Goodman said.
If all goes well, a reinvented Lakeside Center could be completed in about five years, Clark said, or about the same time it takes for Bally’s to open its permanent casino in Chicago.
Clark said he doesn’t regret not redeveloping Lakeside Center into a casino.
“We have no doubt about that,” Clark said. “We definitely still need it as a convention center.”