By Kathy Bergen | Jim Reilly, the legislative’s chief adviser on McCormick Place, would take the reins of the convention center and likely lead it into an era of private management, if the General Assembly approves legislation introduced this afternoon.
Reilly, who is chairman of the Regional Transportation Authority and formerly chief executive of the agency that runs McCormick Place, would step into a $185,250-a-year role that carries extensive decision-making power for an 18-month transition period.
The bill introduced in the Illinois House would give trade show customers much of the flexibility they are seeking, cut into labor’s power on the show floor and provide financial relief to the agency that runs the center, though less than it requested.
The legislation was crafted by a joint House-Senate Committee chaired by House Speaker Michael Madigan and Senate Pres. John Cullerton, both Chicago Democrats. It aims to make Chicago more competitive with lower-cost rivals.
And it appears to have bipartisan support, said Senate Minority Leader Christine Radogno, R-Lemont. “On balance, it’s a huge step in the right direction,” she said.
Here are some highlights:
The naming of a trustee to replace a chief executive of the Metropolitan Pier and Exposition Authority, the state-city agency known as McPier that runs McCormick Place and Navy Pier. Its CEO, Juan Ochoa, announced his resignation Wednesday.
The trustee’s duties will include hiring a private management firm to run McCormick Place day-to-day. A proposal that would have allowed the trustee also to select an exclusive trade show contractor, which shows would have to use for their set-up and tear-down, was scrapped after strong objections from key trade show customers.
The trustee also would have the authority to sell naming rights to McPier facilities. Mayor Richard Daley has objected to any move to rename Navy Pier, which got its name in 1927 to honor personnel who served in World War I.
A laundry list of state-imposed show floor rules aimed at cutting costs and hassles for exhibitors. They include allowing an exhibitor to set up a booth of any size with the use of ladders and hand tools. The unions had fought to limit that flexibility to booths smaller than 400 square feet, up from the current 300 square-foot limit.
The rights also include expanded hours for straight time, allowing exhibitors to call workers by name, reducing worker crew sizes and reduce the number of stewards working the floor.
As well, it calls for a twice-yearly audit to make sure savings are passed along to customers.
Elimination of McPier’s profit margin on food service, and permission for exhibitors to bring in food and beverage for personal consumption, the latter clearly aimed at outrage over sky-high prices for pop and water.
Elimination of the requirement that trade shows use the in-house electrical service.
Restructuring of McPier debt and expansion of state subsidies.
McPier is not collecting sufficient tourism-related taxes to make its annual debt payments, and the state is patching the gap with general revenue.
The bill would ease the pressure by extending the payment schedule by as many as 18 years, and extending the taxes used to pay it off. But it also would increase McPier’s overall bonding ability, from $2.1 billion to $2.5 billion, though this is less than the $2.8 billion the agency is seeking.
The restructuring is aimed at eliminating the need for the state bail-out, reducing it over the next four years. But the bill would redirect some of those stop-gap funds, about $20 million a year, to subsidize McPier operations. The subsidy would be limited to the next four years.
The expectation is that financially strapped McPier would find more revenue sources by the end of four years.
Separately, the cap on a still-to-be-launched incentive fund to lure shows would be raised from $10 million to $20 million.
Doubles McPier’s fees on airport ground transportation. The taxi fee, for instance, would rise from $2 to $4 per ride.
The Chicago convention bureau would get 75 percent of the money, or an estimated $6 million annually, while the Village of Rosemont would get 25 percent, or an estimated $2 million, for its convention center.
The convention bureau board would be restructured and drastically reduced in size, from nearly 100 to 25. Hotel and restaurant industry participation would be limited while representation from the trade show industry and unions would be required.
McPier’s governance would be reworked, ending the two-headed structure by which Chicago’s mayor appoints the board chairman and Illinois’ governor appoints the CEO.
Instead, the CEO will be hired by the board. The mayor and governor would appoint equal numbers of board members, three each for an interim board and later, four each for a permanent board.
Those boards would select an additional member to serve as chairman.
Anyone who has served on previous boards or the interim board would be unable to serve again.
Reducing the Union’s involvement is a common sense step in the right direction.
Get ‘em out of there and watch the shows start returning!
“Jim Reilly, chairman of the Regional Transportation Authority…”
The same Jim Reilly who missed the dodgy “bonus” the Metra chairman was recently paid?
Why is the legislature dealing with work rules??? Why not just let whoever is putting on the exhibit or show hire who they want, under whatever work rules their workers need to be hired under?
This is the first hint I’ve seen that the Rosemont Convention Center is in trouble. How bad is the situation there? And why doesn’t Illinois just roll the Rosemont Center into the McPier structure? Especially since taxpayers are apparently bailing it out too?
Just what exactly is the financial situation at the Rosemont Convention Center? How badly are they out of balance and what is their prognosis? How do their operations differ from McPier’s and what are the good/bad comparisons between the two operations?
Woo-hoo and bravo!!!!!!! About time to put the squeeze to the unions! Now, maybe we will be able to be a little more competitive.
When you get rid of the unions be sure to get rid of UPS, all airline employee,s, city workers, state workers,policemen, firemen, butchers,embalmers, taxi drivers parking lot attendants, hotel workers,teachers bus drivers nad on and on and on,then you will all work for $8.00 per hour
McCormick Place exhibitors were surveyed and 50% of the overcharge complaints were directed at drayage charges. Only 4% listed the electricians. Why ignore the number one complaint, for, “Elimination of the requirement that trade shows use the in-house electrical service.”?
If they fail to address the clients complaints, the clients will sees to exist; as history has shown.
If the Electricians get paid ~$50/hr and the client is charged $200/hr, where does the $150/hr go?
Food cost complaints were 2%. Will they eliminate food before addressing drayage?
I was appalled to read today some of the content contained in the bill the House passed last night. Because I have worked for 15+ years at an advertising agency representing clients who participate in trade shows and have relatives who are long standing members of several different unions working the trade shows, I am in a unique position to see both sides of this issue. Some of the changes are long overdue, the semi annual audits and increased marketing budget being at the top of the list – maybe then the public would learn that as many new shows are coming than are leaving. However, I am specifically concerned about the work rule changes that allow an exhibitor to put up own their own booth regardless of size, the threat to public safety here seems to have been disregarded – I am familiar with trade show exhibits and their construction, large exhibits in the hands of unskilled workers is an accident waiting to happen and threatens the safety of trade show workers, exhibitors and show attendees. Hello OSHA? In addition, the blatant interference with a union’s seniority based system is a lawsuit waiting to happen, how is the state going to pay to defend the class action suit that is sure to follow? The new trustee? A joke, what is he going to bring to the table and why didn’t he do it when he was on the board? And how is his representation of the biggest exhibit houses not a conflict of interest? Sorry but this appears to be just another fat cat lining his own pockets. Finally, how many of us wish the time and $$$ spent on the olympic bid went into to promoting the city’s convention business?
Just get the unions out — except the electricians are needed to keep all the exhibitors from overloading circuits with unsupervised plug-ins.
Other than that ???
We have the best facility in the country for large shows. They didn’t stop coming here because McCormick Place was too small, the central location was hard to deal with or the taxis and restaurants were too scarce. They will leave us because of what it costs them once they enter McCormick Place, Navy Pier or Rosemont Covention Center.
Once again, comments from people who have no ideal how mccormick place is run and blaming unions for the mass exodus.Funny how the state is still keeping the dryage costs the same (for you non union people it is the cost to bring in the exhibitors crates from the docks to the booth average costs run .60 to 1.00 a pound.It cost more to ship from the dockto there booth space,then it does to ship from europe or asia, exhibitors main complaint was dryage costs but the city and state still takes in that money. Also show floor rates run 40 to 50 dollars per square foot for the space only, Imagine a 10 x 10 foot booth it costs you to rent that empty space,it costs the exhibitor $5000 to rent it for a 3 day show. So who is screwing who??
They are talking about exhibitor’s rights, but they are doing nothing to protect the exhibitors.
What is in the legislation that protects exhibitors from unpredictable and escalating charges, cost-shifting, energy surcharges, special handling, bundling, undisclosed third party payments, exorbitant mark ups on drayage and other services by Freeman, GES and other GSC’s while at McCormick Place?
Where is the transparency?
None of these proposals addresses 92% of exhibitor’s complaints.
Again, here is an exhibitor survey from Trade Show Week magazine.
http://www.tradeshowweek.com/article/CA6708531.html?q=McCormick
Let see how these proposals match up.
In your opinion, what is the single most inflated tradeshow cost?
Materials handling (drayage) – No change, Freeman and GES retain control and profits.
50%
Exhibit space – No change, Freeman and GES retain control and profits.
30%
Furniture rental – No change, Freeman and GES retain control and profits.
7%
Electricity – Focus One is no longer exclusive electrical contractor.
4%
Telecommunications – Focus One is no longer exclusive electrical contractor.
4%
Exhibit transportation – No change, Freeman and GES retain control and profits.
2%
Installation and dismantle – The bill allows exhibitors to set up their own booths, regardless of size.
2%
Booth decor – No change, Freeman and GES retain control and profits.
2%
The failure to address these problems will not solve any of the exhibitor’s concerns.
Only Mr. Reilly’s past clients, GES and Freeman , and their trade associations will benefit from these proposals.
The exhibitor’s are the customer, and this legislation completely ignore their concerns.
The legislation requires Focus One to sell its services for cost.
The legislation allows contractors to “mark-up” or profit on everything else.
The only control of these mark-ups is some kind of an audit, twice a year.
McCormick Place has had the ability to audit since 2005.
Is all of this to benefit the monopolies of Freeman and GES?
Is there anything in place to prevent David Causton, or any McPier board members from accepting a job with Freeman or GES after he takes his pension?
Is David Causton doing what Jim Reilly did, give Freeman and GES whatever they want while they work for McPier, so they can consult for Freeman and GES afterwards?
Is this why no one challenged the obviously fictitious HiMMS booth claim and the SPI-NPE Cost Comparison?
Just came from tradeshow at McCormick Place. I had 30 cases of soda (each case weighs 20 lbs)brought in (500 yards). Total time- 20 mins using forklift. Bill came to $1300.00.
They placed a weight of 900 lbs (FRAUD) when it should be $600 lbs, charged a fee to obtain a pass to drive onto dock and a fee to put a fraudulent weight certificate on the invoice. Bastards! I will not pay this invoice.