A Gambling Man
It wasn’t easy. The bet was enormous and placed over nearly a decade—almost 10 years spent pursuing the elusive 10th Illinois gaming license, and the ante kept being upped. At one point, Bluhm had to put millions of dollars of his own money on the table just to stay in the game. “It was a long struggle,” says Bluhm with a little laugh. “But we hung in there. We were tenacious. We always believed this was a great site and a great opportunity, and we had staying power.”
The “great site” is Des Plaines—a close-in western suburb of Chicago. The “great opportunity” turned into the Rivers Casino, which opened in July to rave reviews. And the “staying power” would be Bluhm himself, billionaire real estate developer, cofounder of JMB Realty Corporation and cofounder and managing partner of Walton St. Capital, number 221 on the Forbes 400 list.
If you are curious as to the environment that surrounds a businessman at this level, consider from whence he is talking—the elegant 900 North Michigan Avenue building. It would be a fancy enough address to occupy as a tenant, but Bluhm isn’t a tenant. He built it. When you come to visit, there is no elaborate, ego-gratifying backlit bronze sign announcing the name of the company, just an expanse of exotic wood. The people who work here know who they are, and Bluhm is a private man with no interest in talking about himself.
“I just don’t feel like bragging,” he says. “I’d rather talk about the casino.” So, let’s talk about the casino. A decade of finagling—did he ever give up hope? “We felt it was worth the time, effort, and financial risk,” says Bluhm, adding that several aspects to the deal were in his favor.
“We didn’t have to buy the land [right away],” he says.
“The landowners were very cooperative because it was basically office buildings and one industrial building, and the property was worth more as a casino site—probably in part due to a weak leasing market—so they were willing to continue to give us an option for a long period of time. That was the key.”
The sticking point was not so much business as political issues, a saga begun nearly 15 years ago, when the Silver Eagle Casino, outside of Galena, shut down, touching off a mad scramble to grab its license to gamble, one of 10 permitted by law in the state of Illinois. For a time it seemed like Rosemont’s Emerald Casino project would emerge on top, but allegations of mob involvement, along with other misdeeds by investors and builders, scuttled the plan. In 2008 Bluhm won out over two other finalists, bidding $125 million to win the license.
The legal complexity of opening a new casino is staggering—just one aspect will have to serve to illustrate the maze that must be negotiated long before the first card is dealt: Underneath the Rivers Casino gaming floor is water, in a hollow subfloor supported by stilts.
|Bluhm’s office is in 900 North Michigan Avenue, which his JMB Realty built.|
“There’s a provision in the law that requires a certain number of inches of water be underneath the casino floor itself, so we had to put [beams that water circulates through] underneath the building,” Bluhm says. “It’s silly. The floor of the casino itself has to be on top of water wherever we have gaming positions. It cost us extra to do that.”
That’s all in the past now. Bluhm is eager to sing the praises of the casino, one of the closest to Chicago ever legally built—just 20 minutes away, he notes, from where he’s sitting.
“I’ve heard people say this is may be the nicest regional gaming facility that’s been built in the country,” he says. “It’s very well laid out; when you come out of the parking garage, you go down this beautiful escalator into a very attractive place. It’s upscale, but not too fancy. We’re appealing to every sector of society; people like it and have fun, and that’s why our business is very, very strong relative to the other, old casinos.”
Sure, there are clouds on the horizon. Chicago-loyal Rahm Emanuel wants a Chicago casino, plus maybe as many as four others in the area, and that would certainly cut into Rivers’s traffic—an impressive $34 million in gross receipts from its first full calendar month of operation.
“Let me say this: Trees don’t grow to the sky,” says Bluhm. “There is clearly a saturation point, and as you add additional competition, everybody’s total win will be going down.” But that is years in the future, and Rivers is doing brisk business today. “Let’s talk about food,” Bluhm says. “I am a foodie. Start with Hugo’s Frog Bar and Chop House as a first-rate restaurant—I ate there last night, with the former president of Wynn Casinos. For a regional casino, there’s really nothing like it. Then you move to the Canopy Buffet; the food is great, and it has a terrific [spread]. Next to that is a hamburger place, Flipt, that is my favorite. It has the best turkey burgers. Next to that, there’s Mian, where you have Asian food…” Spoken like a man on a diet—Bluhm has proudly lost 11 pounds recently. Not only does he have to watch what he eats, but he is forbidden by law from gambling—all casino owners are.
“I can’t gamble in my own casino,” he says, though he seems to accept that limitation in return for the enjoyment he has brought others. “It isn’t only the money, it’s the fun,” he says. “People just like the action. It’s not going to change their lives. The average loss per patron is between $60 and $90. It’s fun. You’re going to have a good time at a very attractive place. The design, the whole feel is totally different, honestly, than any other casino in the Chicago market. When you drive up at night, it’s very impressive.”
|Neil Bluhm (right) with his son Andy, who runs a hedge fund.|
The Thrill of the Game
A different world than he was brought up in, certainly. Bluhm was born in Albany Park and graduated from Von Steuben High School (now Von Steuben Metropolitan Science Center) and the University of Illinois, where he majored in accounting. He got his law degree at Northwestern University, and began his career at Mayer, Brown & Platt (now Mayer Brown) before shifting into real estate.
“I’ve been fortunate,” he says, quickly turning attention to his three adult children, Andy Bluhm, who runs the Delaware Street Capital LLC hedge fund, and daughters Leslie Bluhm and Meredith Bluhm-Wolf. “Our family has been interested in a variety of charities,” he says. “My daughter Leslie is on the board of directors for Chicago Cares—she was the cofounder. My other daughter, Meredith, has been active in Children’s Memorial Hospital [she was the cochair of the Children’s Ball campaign]. I’m very proud of my family.”
If you think Neil Bluhm is one of those guys who’s going to rhapsodize about his hobbies—guess again. He is all business. Bluhm is on an incredible hot streak when it comes to casinos; Midwest Gaming, of which he is the chairman, has opened four in four years—in Vicksburg, Mississippi, in 2008; Pittsburgh in 2009; Philadelphia in 2010; and now in Des Plaines.
“I enjoy business,” he says. “I enjoy creating things. Since the recession [began], we have opened four major casinos. We’ve created somewhere near 5,000 jobs—I don’t mean construction; these are permanent jobs. People are going to a nice place and having fun, and I feel good about that. I’m proud of this casino. I feel like we have a gem out of Las Vegas, and plunked it right here so the local people can come. Obviously we do it to make a profit. We’re in business and we risk our capital, but we also feel like we’re creating jobs, economic development. In Illinois, a lot of people were going to Indiana to gamble, and we were losing the revenue. Now we’ve brought some of the revenue back.”
So what’s next for Neil Bluhm? As always, he is holding his cards close to his chest. “We’re always looking at new opportunities,” he says. “But we don’t have one nailed down yet.”
Perhaps so, but he will. Bet on it.