BGA Wins Transparency Ruling in Navy Pier Privatization Case
In a ruling with potentially far-reaching implications for government moves to privatize public functions, a Cook County judge Thursday declared that documents of the nonprofit agency that operates Navy Pier are subject to state open record laws.
The decision by Cook County Judge Thomas Allen comes nearly four years after the nonprofit, Navy Pier Inc., first denied a request by the Better Government Association for Navy Pier’s payroll, leasing, internal policies and other records.
NPI was created in 2011 by the publicly run Metropolitan Pier Exposition Authority to take over day-to-day operations of Navy Pier, though MPEA still owns the popular tourist attraction on Lake Michigan. MPEA also owns, and continues to directly operate, the McCormick Place convention complex.
In 2014, the BGA filed a request under the Illinois Freedom of Information Act for records that had been routinely made public when Navy Pier operations were still under the wing of MPEA. Navy Pier Inc. denied the BGA request, contending it was not bound by open records law because it was a private entity.
The BGA then sued NPI and the MPEA, arguing the two organizations violated state law by refusing to make the records public. The BGA also asked the court to declare NPI a public body.
On Thursday, a month after a more than two-hour hearing, Allen ruled in favor of the BGA on the key portion of the case.
“Navy Pier is operating and one day it is wearing a government hat and one day it’s not. That’s exactly what this section of FOIA is dealing with,” Allen said.
Allen acknowledged his ruling was likely to be appealed. But if the decision stands it could have broad implications.
Increasingly, public bodies across Illinois have been moving to cede some of their responsibilities to private managers, with elected officials arguing the arrangements lead to efficiencies and reduced costs. Such shifts, however, often raise transparency questions.
Chicago, for instance, has several quasi-government bodies that receive city funding yet consider themselves private and refuse to release records of their operations to the public.
Prominent on that list are Choose Chicago, which handles local tourism promotion for the city, and World Business Chicago, the city’s de facto economic development unit.
Under Gov. Bruce Rauner, the state has also set up a nonprofit economic development corporation called Intersect Illinois.
BGA attorney Matt Topic said Allen’s decision was a significant win for government transparency.
“This is very important in an era in which government continues to privatize its functions,” Topic said. “The words of the General Assembly must be given effect and we must make sure that when government privatizes its functions the public still has rights to critical information.”
Attorneys for MPEA and NPI declined to comment.
A key element of the case was whether operating Navy Pier was tantamount to performing a governmental function.
Attorneys for MPEA argued in a recent court filing that running the city’s largest tourist attraction is not a governmental function. They said the agency leased Navy Pier to the private NPI “precisely because it concluded that a governmental entity was not well-suited to perform the kinds of tasks Navy Pier required.”
But the BGA argued that under the state law that governs the convention authority, as well as the lease agreement NPI signed with the convention authority, NPI was contracted to “perform a governmental function on behalf of” the MPEA and was therefore its documents are subject to state open records law.
Close connections between NPI and the MPEA have existed since the MPEA created the nonprofit. Last year, an investigation by the BGA and Crain’s Chicago Business found MPEA had diverted $55 million in property tax dollars it was supposed to use to build a hotel at McCormick Place to renovations at Navy Pier instead.
The elaborate financial shell game revealed by the investigation involved so-called Tax Increment Financing funds that by law are supposed to be earmarked only for projects in or near economically distressed neighborhoods. Navy Pier is miles from any such TIF zone.
Emails reviewed by the BGA and Crain’s revealed McPier and NPI officials worked in concert with city officials to orchestrate the funds transfer.