Downtown Ald. Brendan Reilly is moving to change the zoning on the James R. Thompson Center in a step that state officials hope will help them sell the outdated Loop property.
Reilly will introduce an ordinance at tomorrow's City Council meeting that would double the amount of density a developer could build on the full city block bounded by LaSalle, Lake, Clark and Randolph streets to roughly 2 million square feet. The change would clear the way for a buyer to redevelop the 36-year-old property at 100 W. Randolph St. with what could be a new project rising among the city's tallest towers.
The move is a signal that the state is ramping up efforts to sell the 1.2 million-square-foot property more than a year after hiring Ernst & Young as an advisor to market it for sale. It's still far from clear what a buyer might pay for the building or what future use one might envision for the site, but Reilly said the zoning change would help offer clarity about the scope of a potential redevelopment.
"At least now, prospective buyers know what they're signing up for," said Reilly, 42nd. "I'm hoping this means the state will finally follow through and sell the site so we can do something exciting there to re-energize and reactivate this part of downtown."
Reilly said the zoning change—which could be considered by the full City Council next month—came at the request of Gov. J.B. Pritzker and would reverse a move made in the early 1980s by former 42nd Ward Ald. Burt Natarus, who reduced the zoning allowance at the site while the Thompson Center was being built. The building, he said, has been out of compliance with its zoning ever since. "This just restores the original classification," he said.
"Restoring the Thompson Center’s previous zoning designation will make the property more attractive to potential buyers, generating significant revenue for both the city and state—a win-win," said Pritzker spokeswoman Jordan Abudayyeh. "We look forward to the next steps in this process, and thank Ald. Reilly for his commitment to responsibly using this site."
The state recently signaled it is ready to move its workers out of the Thompson Center soon when it bought the former Pepsico building at 555 W. Monroe St. for $73.3 million with a plan to begin relocating some employees there in April.
While Reilly hopes the Thompson Center site can be redeveloped into something that generates property tax income, finding a buyer could be tricky—especially during the COVID-19 pandemic.
The crisis has sent office vacancy to a record high, with big new office towers under construction set to add more space while many companies look to shrink their office footprints to account for more employees working from home in the future. The site could also be redeveloped with multiple uses, such as apartments or a hotel, but the coronavirus has clouded the outlook for those sectors as well.
There are other long-standing factors complicating any sale, including the fact that the building is intertwined with a CTA station, where service cannot be interrupted during any redevelopment, Reilly said. Another potential wrench prospective buyers might have to deal with to redevelop the property is the retail portion and food court on the building's lower floors, which are operated under a master lease through 2034 by a joint venture of Chicago-based Marc Realty and Boston-based Winthrop Realty Trust.
Those headwinds make former Gov. Bruce Rauner's previous estimate that the Thompson Center could sell for upwards of $200 million appear inconceivable.
Reilly said that while the zoning change would double the allowable density on the 130,000-square-foot parcel, a prospective buyer for the site could also negotiate with the city to build even more space on the land through the city's Neighborhood Opportunity Bonus program. But any plans for redevelopment would have to go through a community review process and win full City Council approval.
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March 24, 2021 at 05:36AM
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Downtown Chicago's Thompson Center poised to be rezoned as state seeks sale - Crain's Chicago Business
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