Business and organizations consider travel cutbacks and meeting cancellations.
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A reduction in the number of visitors and an overall economic slowdown due to the coronavirus could have an outsized effect on Mayor Lori Lightfoot’s city budget. Ashlee Rezin Garcia/Sun-Times file photo
With coronavirus continuing to spread Tuesday, more Chicago businesses and organizations considered whether to cut upcoming travel and meetings, dealing a potential blow to the local
economy and a city budget that relies heavily on visitors’ spending.
The concern was most acute in the convention industry, a cash cow for construction jobs, restaurants, hotels and other sectors. Organizers of upcoming events said they were monitoring health developments and will decide if they need to cancel, reschedule or move events online.
Monday, the International Housewares Association canceled this year’s annual convention at McCormick Place, a four-day gathering this month that was expected to draw 56,000 people and account for 47,000 room nights at Chicago hotels.
“We’re always worried about empty hotel rooms. We want heads in bed. That’s always a concern. But it’s something that we hope, related to coronavirus, only has a short-term impact,” said Michael Jacobson, president and CEO of the Illinois Hotel and Lodging Association.
“Yesterday was a disappointment for our hotels. But, we’re hopeful that the situation gets under control very quickly and that the concern doesn’t continue to spread.”
Attention now is shifting to such upcoming events as the Bank of America Shamrock Shuffle on March 22, an 8K run with a three-day health and fitness show at McCormick Place. The event is still scheduled, but Alex Sawyer, communications director for the event, said organizers “will continue to follow the situation carefully.”
Similarly, the American College of Cardiology, due at McCormick Place March 28-30, said its event is on for now. The expected attendance is 18,000. The organization said it “continues to closely monitor health and safety updates and recommendations issued by the World Health Organization and the Centers for Disease Control and Prevention, as well as state and local health organizations.”
Jacobson stressed that hotels are “taking every precaution that we can take” to protect patrons and employees. He can only hope that business and leisure travelers don’t panic, cancel their plans and hunker down.
“One of the dangers in cases like this sometimes is overreaction,” he said. “Not to discredit the very serious nature of the virus and the terrible loss of life throughout the world. But at the same time, there is no current indication or guidance to change travel habits within the United States.”
A spokeswoman for Navy Pier said it had only one canceled event as of Tuesday, and that was an offshoot of the housewares show. The Chicago Council on Global Affairs, which regularly hosts programs with overseas visitors, said it has contingency plans to postpone some or move them online but hasn’t implemented them yet.
A 2017 study for McCormick Place, completed before the recent expansion of its campus to include a new hotel and the Wintrust Arena, estimated that it generated $1.5 billion in annual economic activity and more than $112 million in state and local taxes each year.
Many other business meetings around the country, especially those on the West Coast, were being canceled and companies were restricting travel to the most essential reasons. One of them was Ford, which reported that two of its employees in China have contracted the virus.
Chicago’s city finances need a lift from tourism. A reduction in the number of visitors and an overall economic slowdown due to the virus could have an outsized effect on a city budget that Mayor Lori Lightfoot cobbled together with onetime or questionable revenue sources.
Civic Federation President Laurence Msall said neither the city, the county nor the state has “adequate reserves to address an unexpected drop in economic activity” tied to the coronavirus.
“The city of Chicago — all government leaders — need to be addressing what is the Plan B if revenues don’t continue to grow as projected before the coronavirus came onto the horizon and began to affect business activities and tourism and travel,” Msall said.
Noting that there would be no letup in the demand for essential city services, Msall urged the city to plan for a worst-case scenario where the virus “continues to grow” and travel, work, school and entertainment patterns are interrupted.
“If it gets to the level where city, county and state residents are being told not to come to work or not to go to gathering places, that would have a precipitous impact. All tourism-related revenue, including restaurant taxes, sales taxes, hotel taxes, McCormick Place taxes, fare recovery at the CTA and Metra could be impacted,” he said.
In December, a Wall Street ratings agency that stands alone in rating Chicago bonds as junk concluded that Chicago and Detroit are the U.S. cities least prepared to weather the storm of another recession because of “extraordinarily high” fixed costs and crushing pension obligations.
Moody’s evaluated the nation’s 25 largest cities for their ability to “handle a recession of similar magnitude” to the economic downturn a decade ago “without a material adverse credit impact.” Chicago and Detroit ranked dead last.
RELATED
Chicago, Detroit are least prepared for next recession, Moody’s says
”Chicago’s extraordinarily high fixed costs, coupled with its escalating pension liabilities, make it one of the cities least prepared for a near-term recession,” Moody’s wrote.
Lightfoot’s own three-year financial analysis forecasts a “worst case” shortfall of $1.74 billion in 2022 if the economy takes a nose-dive and a $799 million shortfall, even in the best-case scenario of a rosy economy.
Her $11.6 billion budget was precariously balanced with one-time revenues that include: A $300 million tax increment financing surplus that’s the largest in Chicago history; a $1.5 billion refinancing, with all $210 million in savings claimed up-front; and a $93 million clawback from the Chicago Public Schools for pension and security costs the city used to pay for.
The mayor is also counting on $163 million from raising ambulance fees paid by private insurers and getting federal approval for reimbursements administered by the state for ambulance transports for low-income patients on Medicaid.
That hasn’t happened yet — nearly five months after the mayor said that approval was “imminent.” Lightfoot has said repeatedly she remains “very confident” the feds will green-light the ambulance plan, despite her repeated attacks on President Donald Trump.
A year from now the bankruptcies of the city of Chicago, Board of Education, Chicago Park District and Cook County will be history. Soon public service will mean just that. And all those bastards with a second government pension will be giving it up.
With coronavirus continuing to spread Tuesday, more Chicago businesses and organizations considered whether to cut upcoming travel and meetings, dealing a potential blow to the local
economy and a city budget that relies heavily on visitors’ spending.
The concern was most acute in the convention industry, a cash cow for construction jobs, restaurants, hotels and other sectors. Organizers of upcoming events said they were monitoring health developments and will decide if they need to cancel, reschedule or move events online.
Monday, the International Housewares Association canceled this year’s annual convention at McCormick Place, a four-day gathering this month that was expected to draw 56,000 people and account for 47,000 room nights at Chicago hotels.
“We’re always worried about empty hotel rooms. We want heads in bed. That’s always a concern. But it’s something that we hope, related to coronavirus, only has a short-term impact,” said Michael Jacobson, president and CEO of the Illinois Hotel and Lodging Association.
“Yesterday was a disappointment for our hotels. But, we’re hopeful that the situation gets under control very quickly and that the concern doesn’t continue to spread.”
Attention now is shifting to such upcoming events as the Bank of America Shamrock Shuffle on March 22, an 8K run with a three-day health and fitness show at McCormick Place. The event is still scheduled, but Alex Sawyer, communications director for the event, said organizers “will continue to follow the situation carefully.”
Similarly, the American College of Cardiology, due at McCormick Place March 28-30, said its event is on for now. The expected attendance is 18,000. The organization said it “continues to closely monitor health and safety updates and recommendations issued by the World Health Organization and the Centers for Disease Control and Prevention, as well as state and local health organizations.”
Jacobson stressed that hotels are “taking every precaution that we can take” to protect patrons and employees. He can only hope that business and leisure travelers don’t panic, cancel their plans and hunker down.
“One of the dangers in cases like this sometimes is overreaction,” he said. “Not to discredit the very serious nature of the virus and the terrible loss of life throughout the world. But at the same time, there is no current indication or guidance to change travel habits within the United States.”
A spokeswoman for Navy Pier said it had only one canceled event as of Tuesday, and that was an offshoot of the housewares show. The Chicago Council on Global Affairs, which regularly hosts programs with overseas visitors, said it has contingency plans to postpone some or move them online but hasn’t implemented them yet.
A 2017 study for McCormick Place, completed before the recent expansion of its campus to include a new hotel and the Wintrust Arena, estimated that it generated $1.5 billion in annual economic activity and more than $112 million in state and local taxes each year.
Many other business meetings around the country, especially those on the West Coast, were being canceled and companies were restricting travel to the most essential reasons. One of them was Ford, which reported that two of its employees in China have contracted the virus.
Chicago’s city finances need a lift from tourism. A reduction in the number of visitors and an overall economic slowdown due to the virus could have an outsized effect on a city budget that Mayor Lori Lightfoot cobbled together with onetime or questionable revenue sources.
Civic Federation President Laurence Msall said neither the city, the county nor the state has “adequate reserves to address an unexpected drop in economic activity” tied to the coronavirus.
“The city of Chicago — all government leaders — need to be addressing what is the Plan B if revenues don’t continue to grow as projected before the coronavirus came onto the horizon and began to affect business activities and tourism and travel,” Msall said.
Noting that there would be no letup in the demand for essential city services, Msall urged the city to plan for a worst-case scenario where the virus “continues to grow” and travel, work, school and entertainment patterns are interrupted.
“If it gets to the level where city, county and state residents are being told not to come to work or not to go to gathering places, that would have a precipitous impact. All tourism-related revenue, including restaurant taxes, sales taxes, hotel taxes, McCormick Place taxes, fare recovery at the CTA and Metra could be impacted,” he said.
In December, a Wall Street ratings agency that stands alone in rating Chicago bonds as junk concluded that Chicago and Detroit are the U.S. cities least prepared to weather the storm of another recession because of “extraordinarily high” fixed costs and crushing pension obligations.
Moody’s evaluated the nation’s 25 largest cities for their ability to “handle a recession of similar magnitude” to the economic downturn a decade ago “without a material adverse credit impact.” Chicago and Detroit ranked dead last.
RELATED
Chicago, Detroit are least prepared for next recession, Moody’s says
”Chicago’s extraordinarily high fixed costs, coupled with its escalating pension liabilities, make it one of the cities least prepared for a near-term recession,” Moody’s wrote.
Lightfoot’s own three-year financial analysis forecasts a “worst case” shortfall of $1.74 billion in 2022 if the economy takes a nose-dive and a $799 million shortfall, even in the best-case scenario of a rosy economy.
Her $11.6 billion budget was precariously balanced with one-time revenues that include: A $300 million tax increment financing surplus that’s the largest in Chicago history; a $1.5 billion refinancing, with all $210 million in savings claimed up-front; and a $93 million clawback from the Chicago Public Schools for pension and security costs the city used to pay for.
The mayor is also counting on $163 million from raising ambulance fees paid by private insurers and getting federal approval for reimbursements administered by the state for ambulance transports for low-income patients on Medicaid.
That hasn’t happened yet — nearly five months after the mayor said that approval was “imminent.” Lightfoot has said repeatedly she remains “very confident” the feds will green-light the ambulance plan, despite her repeated attacks on President Donald Trump.
A year from now the bankruptcies of the city of Chicago, Board of Education, Chicago Park District and Cook County will be history. Soon public service will mean just that. And all those bastards with a second government pension will be giving it up.
Even without corona virus, who wants to risk hotel bedbugs and Chicago crime?
ReplyDeleteThat's why you should never elect a lawyer to a job that has fiscal responsibility. That's why Washington is so screwed up.
ReplyDeleteShe is so smart, kick the president in the balls repeatedly and then expect a favor. She's ignorant and stupid
ReplyDeleteI guess it doesn't need the multi-millions it is not collecting because of it's new policy of not demanding that POOR property owners don't need to pay their water bills. If they are so POOR, how are they home owners?
ReplyDeleteHUD and FHA assists them.
DeleteDemocratic Socialist management = DISASTER
ReplyDeleteThey could be renters, or they may be homeowners that aren't paying property taxes or utilities either. Hood rats know a thousand different ways to stiff people/organizations/institutions/government bodies that they owe money to.
ReplyDeleteIt looks like Larry's in a little bit over his head.
ReplyDeleteSouthside Tony AKA the wise owl 🦉
DeleteA $300 million tax increment financing surplus that’s the largest in Chicago history.
ReplyDeleteHow is there surplus? I've been telling you there is plenty of money stop funding or abolish these TIF Districts.
Cash out all the TIF money now!
Deletetoo late
DeleteLightfoot the clown!
ReplyDeleteI earned those pensions. They are legally mine.
ReplyDeleteSadly most public employees contribute very little towards the pensions they receive. They then entrust idiots to invest the money they have contributed, end result-the bulk of your pension is funded by the taxpayer who often end up in retirement dirt poor while funding someone else's retirement. Time to switch overpaid underworked public employees over to a 401k system.
DeleteActually, crybaby, I contributed 9% of my pay for 36 years to get my pension. I owe nobody any thanks.
DeleteThe sadly poster is back!
DeleteYes....what makes me sick is most city employees retire with a monthly pension that if you were just a private sector person, would need about two million in savings to generate that kind of monthly income.....the lower working class fund the retirees whose income is typically double the per capita income of the rest of the citizens of chicago.
DeleteSome people say that some portion of that government pension was ill gotten. Like the pol that takes advantage of a loophole to position themselves for a second or third pension. Like the for former state rep from the ward 19 that got himself 3 pensions and his wife got one, and I say thats's just too cute. And I think the bankruptcy judge is going to call it the same way and take back much of the multiple pensions and all the other pensioners will be getting a hair cut too. And you can blame all of this on the voters that constantly voted this borderline criminals into office. When this is over, bet your ass that each of these governments will have a balanced budget and the pensioners will be able to rest assured that whatever is left of their pension is secure.
DeleteMayor Lightfoot is doing her best.
ReplyDeletethat is the problem with hiring someone based on their skin color, sex, sexual orientation or liberal credentials. She is clearly in over her head.
DeleteNever did a budget before, probably never even balanced her checkbook. WTF did anyone think was going to happen.
DeleteWords of Wisdom to Richie and Mayor Lightfoot. You dont spend money you dont have.
ReplyDeleteYou don't have it do without my parents who lived threw the depression use to say I bet none of these your foks didn't even save there tax refunds phones tats shoes morons think the big government tit will be out there
Delete