Horses, gambling may push aside plan for big housing development in Tinley Park

In Tinley Park, horses and houses may be competing for the same patch of land as legislation that would expand gambling could put state-owned property in that suburb in the running for a combination harness racing track and casino.

Village officials have, since January, been negotiating with a group, called Melody Square, that has proposed building hundreds of homes on the former Tinley Park Mental Health Center property, northwest of Harlem Avenue and 183rd Street.

The possibility of a “racino” emerged about two months ago, before the gambling bill was approved by legislators, as part of those negotiations, according to David Niemeyer, Tinley Park’s village manager.

A racino, which could have as many as 1,200 gambling positions, would provide “huge benefits” for the village, with the development of an “entertainment complex” that also would include other uses, such as restaurants and a hotel, he said.

The gambling expansion would not only allow for a racino in the Southland but a new, separate casino as well, with several area suburbs interested in snaring such a project. A casino for Chicago also is part of the legislation, and existing horse racing tracks would be able to add casino games, something track owners have sought for years.

Existing casinos could increase their number of gambling positions from the current 1,200 to as many as 2,000 under the measure, and businesses that have video gambling terminals would be allowed to have a maximum of six terminals, up from the current cap of five.

Working with large home builders such as K. Hovanian Homes, Melody Square’s proposal includes 435 single-family homes described as active-adult age-restricted housing targeting buyers 55 and older, as well as a 200-unit luxury senior apartment building and additional housing units elsewhere on the 280-acre site.

Niemeyer said the housing development plans are “on hold until we see how this (racino proposal) pans out.”

The gambling legislation, which Gov. J.B. Pritzker is expected to sign, would allow a casino in one of six area townships — Bloom, Bremen, Calumet, Rich, Thornton or Worth. The racino would be permitted in one of those six townships as well as Orland Township, where the state property is located.

Suburbs such as Country Club Hills, Ford Heights, Lynwood and Matteson are among those interested in pursuing a casino development but it is unclear whether other sites are in contention for the racino.

“We’ll make a strong pitch” for the Tinley Park location, Niemeyer said. “We’d love to land it.”

The current negotiating rights agreement with Melody Square is due to lapse early next month, but both sides could agree to extend it. The developers were seeking incentives from the village of nearly $69 million, and expect the cost of completing the project to be $350 million.

One of the partners in Melody, Rick Heidner, is pursuing the racino project on his own, separate from the others involved in the housing development, Niemeyer said.

Heidner is a commercial real estate developer and an owner of Gold Rush Gaming, a video gambling terminal operator. He did not respond to a message seeking comment on his plans.

A racino would need approval from state gaming and horse racing regulators, and Tinley Park or the developer would need to acquire the property from the state.

In 2015, Tinley Park planned to pay the state what was then an asking price of $4.16 million for the property in a bid to gain greater control over what might be built there, then backed away from that idea.

The village had previously estimated the cost of getting the site ready for development, including environmental cleanup and demolition of the many buildings on the property, at $12.4 million.

Testing completed in 2014 revealed environmental issues such as asbestos, an abandoned sewage treatment plant, leaking underground storage tanks holding gasoline and other petroleum products, drums containing chemicals, and soil contaminated with mercury and lead.