Public Dollars to Keep Navy Pier Records from the Public: Nearly $670,000

The tab for hiring outside attorneys hits almost $670,000 as the public agency that owns Navy Pier fights in court to block release of records related to operation of the lakefront tourist attraction.

This story was co-published with Crain's Chicago Business.

The government agency that owns Navy Pier has spent nearly $670,000 in public funds on attorneys to fight the Better Government Association’s efforts to obtain records a judge says should be public.

A Cook County judge earlier this month sided with the BGA, declaring payroll, leasing and other records from Navy Pier are subject to state open records laws.

It was the first legal decision about the records in a nearly four-year battle over the documents between the BGA and the Metropolitan Pier and Exposition Authority, which also owns and operates the McCormick Place convention complex.

It is still unclear if the MPEA and the nonprofit it established to run the lakefront tourist attraction, Navy Pier Inc., will appeal the ruling by Cook County Judge Thomas Allen. An MPEA spokeswoman said a decision about whether to pursue an appeal has not yet been made.

Following Allen’s March 1 decision, the BGA sought copies of all invoices paid so far by the MPEA for outside legal counsel dating back to when the case first went to court in 2014.

The records show MPEA has paid about $626,550 to the Mayer Brown law firm for representation in the case. Another roughly $40,256 was spent with the Chicago firm of Riley, Safer, Holmes & Cancila specifically to represent the MPEA’s chief financial officer, the records show.

The records do not reflect any of the legal bills paid by NPI, which had its own attorneys.

“MPEA has a small legal staff to handle a multitude of daily issues, like many other governmental agencies, the authority uses outside counsel on occasion to handle certain litigation issues where particular expertise is required,” MPEA spokeswoman, Cynthia McCafferty, said in an emailed statement. “The rates paid over the past four years in relation to this lawsuit were negotiated in a competitive bidding process prior to the filing of the lawsuit and the hourly rates are significantly discounted.”

In 2011, in a move that officials said would help streamline operations and lead to efficiencies, the publicly run MPEA said it created NPI to take over day-to-day operations of Navy Pier.

But MPEA retained ownership of the popular tourist attraction on Lake Michigan.

Three years after NPI was created, the BGA filed a request for records under the Illinois Freedom of Information Act, seeking from both MPEA and NPI copies of internal policies, Navy Pier’s payroll, leasing contracts and other records. Such documents had been previously available to the public when Navy Pier operations were still under the wing of MPEA.

MPEA and NPI denied the BGA records request, arguing that NPI was not subject to open records law because it was a private entity.

The rejection prompted the BGA to sue both entities. The lawsuit asked the court to declare NPI a public body and to force it to comply with open records law.

Allen ruled on the open records portion of the case but did not make a decision on the public body issue. A decision about how that portion of the case will proceed may be made in court next month.

Still, Allen’s open records ruling has the potential to have far-reaching implications for governments across Chicago, Cook County and Illinois as more public bodies move to privatize public functions.

As budgets have been squeezed, government officials say they can reduce costs by relinquishing some of their responsibilities to private companies or managers. But those shifts often raise questions about taxpayers’ ability to track how those new arrangements are working.

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. Examples include Choose Chicago, a local tourism promotion group once headed by now-Illinois Gov. Bruce Rauner, and World Business Chicago, the city’s de facto economic development unit.

As governor, Rauner also launched Intersect Illinois, an economic development corporation that assumed responsibilities long performed by the state.

When Navy Pier was still under the wing of MPEA, the tourist destination had a reputation as a haven for patronage hiring and insider contracts.

Last year, a BGA and Crain’s Chicago Business investigation found MPEA had diverted $55 million in property tax dollars supposedly targeted for construction of a hotel at McCormick Place to Navy Pier renovations 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 development 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.

A subsequent BGA investigation also found a construction company terminated from the Navy Pier renovation project for cost overruns nonetheless received lucrative public contracts for renovations at the Chicago Housing Authority.

About the Author

John Chase

John Chase is the director of investigations at the Better Government Association. He was named to the post after 18 years as a general assignment, political and investigative reporter for the Chicago Tribune.