McPier in Debt

By Kevin Robinson in News on Nov 4, 2009 3:00PM

File this under No Surprise to Anyone: Metropolitan Pier and Exposition Authority, otherwise known as McPier, is deep in debt. Crain's is reporting that according to the new chairman of McPier,

When the current fiscal year ends June 30, McPier predicts tourism-based revenue will be down $33.9 million from the previous year, following an $18.8-million decline from fiscal 2009. At the same time, operating income has fallen 4.4% in the fiscal first quarter, ended Sept. 30, at Navy Pier, the Hyatt Regency McCormick Place and the McCormick Place convention center.

“This combination put us in a fairly significant and unprecedented financial hole,” says [Mc Pier Chairman John Gates Jr], who took over as head of McPier two weeks ago. “It’s not an insurmountable hole, but we can’t climb our way out of it and conduct business as usual.”

Those declines in tourism-based revenue mean that the authority will fall nearly $40 million short when it comes to making payments on its bonds. McPier, which had an operating loss of $4.4 million in the first quarter of this fiscal year, hopes to tap into $52.7 million in state sales tax to cover the losses. Previous attempts to get legislative approval for such a move have not been successful, but Gates says they plan to continue to seek such an approval. “The state will pay that shortfall for the foreseeable future until we can restructure these bonds and get our financial house back in order,” Gates told Crain's.