Judge Rules Navy Pier Nonprofit Not A Government Entity

Decision in a BGA lawsuit means the private body spun off from the McCormick Place governing board won’t be deemed a public agency, but its records will still be subject to Freedom of Information requests for payroll, leases and other government functions.

Gargolas/iStock

Navy Pier Inc., a nonprofit that operates the iconic publicly owned landmark on Chicago’s lakefront, is not a public body but still will have to make records public when they deal with governmental functions, a Cook County judge ruled Friday.

In a case brought by the Better Government Association, Judge Thomas Allen earlier this year ruled documents held by the nonprofit agency were subject to public records requests when they related to government functions, such as payroll and leases. That decisions still stands.

But in his ruling Friday, Allen disagreed with a broader BGA argument that NPI should be considered a subsidiary public body of the government agency that handed over operations of the tourist attraction in 2011 and therefore treated like other government entities.

“There is no doubt that NPI is an independent legal identity,” Allen said in ruling from the bench after two days of testimony in the four-year-old case.

NPI was created in 2011 after the publicly run MPEA, which owns Navy Pier and also owns and operates the McCormick Place convention center, decided it needed a separate entity to handle the pier’s day-to-day operations.

Allen said documents held by NPI were subject to public records requests to the Metropolitan Pier and Exposition Authority when they related to government functions NPI performed on behalf of MPEA.

In 2014, the BGA filed a request under the Illinois Freedom of Information Act for payroll, leasing and other records that had been routinely made public when Navy Pier operations were still under MPEA’s control. NPI and MPEA denied the requests, contending NPI was not bound by open records laws because it was a private nonprofit, and the BGA sued.

The BGA’s lawsuit could have broad implications for governments that hand over responsibilities to private entities, an increasingly common occurrence.

To rule in favor of the BGA’s latest request, Allen said, “would have a chilling effect on public-private partnerships.”

The BGA argued MPEA created the NPI board, dictated the terms of NPI’s lease and provided hundreds of millions of dollars in funding for Navy Pier.

“There is no doubt those are public funds,” Allen said, but the judge ruled that NPI, once established, was free to make decisions on its own.

Allen said the spinoff of Navy Pier occurred at a time of financial difficulty for MPEA. He described the spinoff as being “like a divorce” that separated MPEA’s convention assets at McCormick Place from Navy Pier. The physical assets still are owned by MPEA but NPI independently operates the pier, the judge said.

The BGA’s attorney, Matt Topic, said the judge’s earlier ruling requiring NPI to comply with open records requests was still in effect. But Topic said Allen’s decision Friday rendered such requests more cumbersome.

“Today the judge ruled that we cannot (submit a Freedom of Information Act request to) NPI directly,” Topic said. “We respect the decision, but disagree, and are evaluating our appeal options.”

Attorneys for MPEA and NPI did not return calls for comment.