A bigger district would bring in an additional $10 million a year, proponents say.
Money to support a McCormick Place expansion would be raised by expanding a 1% tax on restaurant meals and drinks under legislation advancing Wednesday in the Illinois Senate.
The proposal, which has strong backing from trade unions, would enlarge the part of Chicago’s central business district in which the tax is collected. The Senate Executive Committee approved the measure 12-1, with one member voting present, during a hearing Wednesday. The bill could go to the full Senate later Wednesday.
The revenue would allow the Metropolitan Pier and Exposition Authority, which runs McCormick Place, to borrow an additional $600 million, increasing its bonding limit to $3.45 billion. The agency plans to build a new convention hall over King Drive and tear down the above-ground portion of the Lakeside Center, widely viewed as outmoded convention space.
An earlier proposal to fund the expansion with a $1-a-ride tax on Uber and Lyft has been dropped amid opposition from those companies.
Lori Healey, CEO of the authority, told senators the expanded boundaries of the taxing district were drafted with help from the tourism industry. She called it an effort to “modernize our tax collections” by tapping activity within a growing central business district.
With the changes, “[we will] pick up cool new restaurants that all of our conference attendees want to go to,” Healey said.
The proposed boundaries would be from Irving Park Road on the north to 55th Street on the south, the lakefront on the east. The western border would be Western Avenue from Irving Park Road south to Pershing Road; east to the Dan Ryan Expressway; south to 51st Street; east to Cottage Grove Avenue; south to 55th Street; east to the lakefront.
The current boundaries are Diversey Avenue on the north; the Stevenson Expressway on the south; the lakefront on the east; and Ashland Avenue on the west.
The proposal came under immediate criticism from aldermen whose wards are part of the larger district.
Ald. Tom Tunney (44th), owner of Ann Sather restaurants, said he adamantly opposes the dramatic expansion of a restaurant tax that was supposed to be temporary.
“This tax was supposed to go away — not expand,” said Tunney, the new chairman of the City Council’s Zoning Committee.
“I’m not supportive of it. We already have the highest sales tax in the country, and we’re expanding it? I just feel that the cost of dining out is very expensive. It’s close to 12 percent. Consumers notice. I also think it hurts us on the competitiveness of the convention and tourism business.”
Ald. Brian Hopkins (2nd) joined Tunney in opposing the expansion.
“The whole purpose of the original tax on restaurants for McCormick Place was to capture tourism dollars. We know they’re concentrated in the downtown area,” Hopkins said.
“The further you push that away [from downtown], the more you’re putting that burden on local residents who are going to their neighborhood restaurant. That’s not fair, and I don’t support it.”
Downtown Ald. Brendan Reilly (42nd) said he’s all for expanding the boundaries of the restaurant taxing district — particularly if it allows for demolition of a Lakeside Center that, he believes, never belonged on the lakefront.
“All of the restaurants that I represent are already paying that tax. So, a very small group of businesses have been shouldering that burden for a very long time,” Reilly said.
Healey said broadening the taxing district would allow the authority to collect $10 million a year on top of the tax’s current revenue of about $51 million a year.
If the Senate approves the measure, it still must go through the House before the scheduled end of the current legislative session Friday. Then it needs the governor’s signature to become law.
