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The ball got rolling Tuesday on Mayor Rahm Emanuel's plan to build a $170 million DePaul basketball arena that would double as an "event center" for McCormick Place, but in a way that appeased the local alderman.
The City Council's Finance Committee agreed to earmark $55 million in tax-increment-financing (TIF) funds toward a new 1,200-room headquarters hotel to be built on the northeast corner of Cermak and Prairie. That's 13 percent of the $421 million cost.
The design and financing changes were triggered by a court fight over adjacent land.
Instead of waiting for a judge to resolve the dispute, City Hall relocated the headquarters hotel to a site across the street from the stadium that will incorporate the landmark American Book Company Building.
Emanuel also responded to concerns raised by Ald. Pat Dowell (3rd) by diverting the TIF subsidy from the DePaul basketball arena that would double as an "event center" for McCormick Place to the hotel.
"TIF is being spent for the purpose TIF was created; to generate economic development opportunity in areas where there isn't any. This is an appropriate use of taxpayers' money," Dowell said Tuesday.
Using TIF dollars to build the 10,000-seat stadium would have been "problematic," the alderman said. "It was supporting an arena that was gonna be utilized primarily by DePaul," Dowell said.
Outgoing McPier CEO Jim Reilly added, "All of the money the city is going to give us from TIF goes into the hotel. None of it goes into" the arena.
Emanuel's original plan called for $70 million in stadium construction costs to come from the McPier bond fund backed by local hotel taxes and $33 million in land costs to be paid for by the surrounding TIF. Another $21.5 million in TIF funds would have been used to buy the land now tied up in court.
The new plan calls for the city to devote all $55 million of its TIF money to purchase land for the headquarters hotel and absorb a chunk of development costs.