Issue Position: Chicago Convention Industry Reform

Issue Position

This year the Illinois Senate acted on a sweeping proposal targeted at cleaning up the business structure at Metropolitan Pier and Exposition Authority ("McPier"). The proposal attempted to address the possible loss of important conventions and shows and thereby restore the vitality of this important economic engine for the State.

Illinois Senate President John Cullerton helped lead the negotiations of Senate Bill 28 (Public Act 96-898) to cut bureaucracy, establish strict ethics standards, and provide incentives for attracting new business.

Less than a month after this comprehensive reform package was passed, the Chicago Tribune and CBS Chicago reported that McCormick Place was able to secure six recommitments from customers for future shows and conventions. Additionally, the business from three other organizations was secured. The Chicago Convention and Tourism Bureau projected that these developments alone will produce more than $1 billion in new economic activity for Illinois.

The McCormick Place Reform Package includes the following provisions:

*Establishes an Authority Trustee with the powers and duties of the Board and CEO to run the day to day operations. The bill also establishes a 7-member Interim Board for an 18-month term with the power to veto any action of the Trustee. After the initial 18-month period is over, a new 9-member board will assume operation of the Authority.

*Boosts marketing investments. Under the legislation, the Authority will enter into a marketing agreement with the Chicago Conventions and Tourism Bureau (CCTB). CCTB will receive proceeds from an increase from $2 to $4 in the departure tax for taxi rides from the airport.

*Creates strict ethics standards. The legislation includes provisions that require any employee or any immediate family member of any employee must file statements of economic disclosure (including trustees and board members). The bill prohibits employees from using their position for personal or financial gain and from accepting gifts for personal use. Employees may not hold any office that may conflict with their official duties or have a financial interest with a party to a contract.

*Establishes exhibitor rights. Under the law, there are now "house rules" for work that is done on exhibitors' booths, including standards for labor, electrical and food service costs. The legislation grants the Authority the power to establish work jurisdiction and scope of work of union employees in order to reduce confusion and increased costs.

*Requires two audits per year. The reform package mandates that the Authority must hire an entity to conduct at least 2 audits per calendar year to ensure that reforms have resulted in cost reductions for exhibitors and that those costs have been passed on to exhibitors. If findings demonstrate an entity has not passed on the savings, the Authority has the ability to ban entities from doing business on Authority grounds (this should only be used in extreme cases).

*Boosts flexibility to attract business. With this new law, the Authority has been granted the ability to offer incentives to attract shows.

*Updates the bonding authority to stabilize finances. The legislation increases the McPier bonding authority by $450 million and extends the Authority's taxes and Maximum Deposit Amounts by 50 years (to FY 2060) with 40-year bonding authorization, fixing the shortfall problem, which has led over the past 3 years to a $55 million, draw against GRF.

*Requires integrity in awarding contracts. The law now establishes standards that mandate that professional contracts must be procured in a manner substantially similar to the state Procurement Code. Under the bill, contractors with bids or contracts with an aggregate value of $50,000 are prohibited from making contributions to the Governor and Mayor.

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