How Chicago power players diverted $55M in blight-fighting funds to Navy Pier

Three years ago, as developers were building a 1,205-room Marriott in the McCormick Place complex on Chicago’s economically sluggish near south side, portions of earmarked tax funds were obscurely moved to renovations at the famed Navy Pier.

It amounts to a financial shell game that a joint investigation by the Better Government Association and Crain’s Chicago Business uncovered.

In play was $55 million of tax-increment financing approved toward Metropolitan Pier & Exposition Authority’s $421.5 million hotel complex redevelopment plan in a blighted area. Emails and internal documents obtained in the investigation show MPEA officials diverted the money to Navy Pier Inc., a private nonprofit the authority set up to operate the popular lakefront tourist destination.

“The bookkeeping jiujitsu appears to violate the spirit, if not the letter, of the controversial tax-increment financing program, which critics say has been widely abused and not used for its intended purpose of spurring development in or near economically disadvantaged neighborhoods,” the report reads.

The Marriott Marquis Chicago hotel at McCormick Place and an adjacent DePaul University basketball arena are expected to open in the coming months.

Read more from Crain’s Chicago Business.