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Emanuel Gambles Chicago on NATO Event to Get Global Stage

Laurence Geller, who runs luxury hotels around the globe, figures it will cost him half a million dollars when his adopted hometown, Chicago, hosts world leaders this month at a North Atlantic Treaty Organization summit.

That’s his estimated bill for increased security, staffing and canceled reservations from tourists wanting to avoid the swarm of demonstrators, police and diplomats at the May 20-21 event. Geller, chief executive officer of Strategic Hotels & Resorts Inc. (BEE), will gladly absorb the loss because the meeting may be a turning point for a city, he says, where short-term thinking has replaced boldness.

“We can be a great city” like Shanghai or Singapore, said Geller, a London native. “Or we’ll be Detroit.”

The summit is a coming-out party of sorts for Chicago that its rookie mayor, Rahm Emanuel, President Barack Obama’s former chief of staff, pursued to bolster the global profile of the third-largest U.S. city. For some demonstrators, that party started yesterday with a protest outside Obama’s re-election headquarters, where eight of an estimated 100 protesters were arrested after being accused of trespassing, said Officer Robert Perez, a Chicago Police Department spokesman.

While the city has sanctioned two separate protests, on May 18 and 20, organizers of other demonstrations have said they’ll rally without official permission. Occupy Chicago will attempt to force Boeing Inc. (BA) to close its downtown headquarters on May 21, said Micah Philbrook, a spokesman for the group.

Boeing will encourage employees to work remotely, said John Dern, a spokesman, though the company’s offices will remain open that day. Occupy Chicago’s threat to “shut down” Boeing came as some army-surplus stores in the Chicago area reported heavy sales of gas masks.

Run on Gas Masks

“We’re pretty much sold out,” said Anna Marie Murguia, manager of First Surplus & Supply in Lombard, Illinois. “And a lot of our vendors have depleted their supplies too.”

For summit supporters such as Geller, whom Emanuel named last year to the executive committee of the city’s tourism board, the event is a risk Chicago must take to elevate its stature and avoid economic stagnation. For doubters, it’s an investment of dubious value as the city cuts services. Last month, Moody’s Investors Service lowered the outlook on its bonds to negative because of unfunded pension liabilities.

“I love this city, I really do, but we have this inferiority complex that we have to get over,” University of Chicago economist Allen Sanderson said, arguing that investments in political conventions, sporting events and summits don’t deliver lasting economic benefits.

$56 Million Tab

“The things that matter are more long term -- what is the tax climate in the city or the state; what is the political climate?” Sanderson said. “What’s the quality of schools? Those are far more important considerations.”

The city’s host committee issued an economic forecast April 30 that said Chicago will benefit to the tune of $128 million.

“Taxpayers will not pay anything for the summit,” Emanuel said on the same day, assuring reporters that the estimated $56 million cost will be covered by corporate donations and the federal government.

More than 18,000 attendees are registered, according the NATO. Thousands of demonstrators also are expected to converge, fewer than were expected before the White House moved a companion G8 meeting to Camp David outside Washington. Still, the specter remains of violent confrontations that have marked international gatherings elsewhere.

‘Not 1968’

While city officials have promoted the summit, they’ve been put on the defensive by memories of the Democratic National Convention during the height of the Vietnam War, when police and demonstrators fought the so-called Battle of Chicago.

“This is not 1968,” Lori Healey, director of the NATO Host Committee, told reporters in January.

The summit is the latest in more than a century of attempts by the city to promote its image, said Dick Simpson, a political scientist at the University of Illinois at Chicago and co-author of “Twenty-First Century Chicago.”

“We’ve always had that complex, that striving to be viewed as the American city,” Simpson said, pointing to self- promotional efforts from the Columbian Exposition of 1893 to the city’s failed attempt three years ago to win the 2016 Olympic Games. “We want to make sure everyone recognizes us as a global city.”

Still, the ghosts of 1968 linger, said Police Superintendent Garry McCarthy.

Secret Service Help

“Why wasn’t it put to bed already?” McCarthy, 53, said in an interview at police headquarters. “Because people want to hang on to it, that’s why.”

The U.S. Department of Homeland Security is leading the effort to provide security for the two-day event through its Secret Service and Federal Protective Services divisions, working with the city’s police force of 12,500.

Chicago has a mixed record with large events featuring political leaders. Although it hosted the 1996 Democratic convention without significant clashes, a 2003 Iraq War protest resulted in the arrests of about 900 demonstrators and led to civil-rights lawsuits complaining of police tactics. The city settled the case in March for $6.2 million.

McCarthy said the department has learned lessons from previous international events in Toronto, Pittsburgh and other cities as well as the Occupy Movement protests in Chicago and is prepared for at least 10,000 demonstrators. The department’s strategy will be to deploy officers in ordinary uniforms with instructions to deal with protesters on an individual basis, the superintendent said, reserving the right to alter its tactics as the situation warrants.

Mob Rules

“If you treat them like a mob, they become a mob,” McCarthy said. “If you put officers out in riot gear and helmets, turtle suits, then you should expect that that’s what you’re going to receive in kind.”

The department also has acquired two long-range acoustical devices, said Melissa Stratton, a department spokeswoman. The truck-mounted units made by San Diego-based LRAD Corp., can deliver a burst of sound intolerable to the human ear. They were deployed for that purpose during the 2009 G20 summit in Pittsburgh, according to the company’s website. Protest organizers are wary of police plans.

“Chicago is internationally known for three things: Michael Jordan, Al Capone and police misconduct,” said Andy Thayer, 51, a protest organizer and participant for more than 30 years, during which time he’s been arrested twice -- in Moscow, campaigning for gay rights, and in the U.S. opposing the policies of former President George W. Bush.

Thousands of Protesters

Thayer, a logistics organizer and unofficial spokesman for a group calling itself the Coalition Against the NATO/G8 War and Poverty Agenda, led the group’s drive to obtain a city permit allowing it to stage the May 20 march.

Asked who’s coming, he said, “That’s a difficult question to answer.” He estimated demonstrator turnout could be in the thousands.

Floor trading and other operations at the city’s historic Chicago Board of Trade building won’t be affected by the summit, said Laurie Bischel, a spokeswoman for CME Group Inc. (CME), which owns the board and the Chicago Mercantile Exchange. It also will “generally be business as usual” at the city’s JPMorgan Chase & Co. (JPM) office, said Thomas Kelly, a spokesman.

Geller, 64, the Strategic Hotels CEO, said he’s not worried about “anarchists” in the coming days -- and that an event more rare than any NATO summit probably would cause far more disruption in Chicago.

“Imagine the damage if the Cubs ever won the World Series,” he said.

To contact the reporters on this story: Tim Jones in Chicago at tjones58@bloomberg.net; and Andrew Harris in Chicago at aharris16@bloomberg.

To contact the editor responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net

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