Rauner hopes to turn South Loop dud into world-class research hub

SHARE Rauner hopes to turn South Loop dud into world-class research hub
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Rendering of proposed education hub and riverwalk. Supplied by marketing and communication for Related Midwest.

An IKEA. Gambling riverboats. A theme park.

And now a sprawling innovation and research center — helmed by the University of Illinois — touted as an economic boon to Chicago.

That’s the latest plan for a historically vacant patch of 62 acres of riverfront land just east of the Chicago River and south of Roosevelt Road. Developers envision an eventual mix of residential, commercial and entertainment features that will make it “the city’s 78th neighborhood.”

Gov. Bruce Rauner plans to make it official on Thursday, sharing his vision for the South Loop land parcel — worth an estimated $151.1 million — that has been little more than an eyesore for decades.

Mayor Rahm Emanuel gives the ambitious plan a thumbs up, although House Speaker Michael Madigan is taking more of a wait-and-see attitude.

Chicagoans are no stranger to big promises for the vacant site, which has a checkered history of its own, including past owners such as convicted felon Tony Rezko and an Iraq-born British businessman who got caught up in a corruption scandal in France.

Looking south at acreage at the southwest corner of Clark and Roosevelt. | Leslie Adkins/For the Sun-Times

Looking south at acreage at the southwest corner of Clark and Roosevelt. | Leslie Adkins/For the Sun-Times

But Rauner and the University of Illinois are hoping the project will give the school’s Urbana-Champaign campus — the state’s flagship school — a long sought outpost in Chicago.

Dubbed Discover Partners Institute (DPI), the private-public research facility has lofty goals with recruitment hopes of 90 new faculty members and up to 1,800 students.

Rauner spokesman Hud Englehart said the governor hopes the private sector will kick in to start financing of the project but “we hope to at some point get support for public sector involvement.”

Englehart said the project was “referenced as an announcement that would occur” in Chicago’s bid for Amazon’s second headquarters.

“It was referenced in the bid. There was no explanation of it. No big push towards trying to make it a part of anything. It just happened to be referenced,” Englehart said.

Spokesmen for Illinois House Republican Leader Jim Durkin and Illinois Senate Republican Leader Bill Brady said on Wednesday they support the concept but are awaiting final details.

And Madigan spokesman Steve Brown confirmed the center was discussed during a recent leaders meeting, with details brought to the table by Brady on behalf of the governor.

Brown denied reports that there was a “verbal agreement” from legislative leaders to use the proceeds from the sale of the James R. Thompson Center to help pay for the center. The sale is already accounted for within the budget plan, which passed in July, he said.

Looking south at acreage at the southwest corner of Clark and Roosevelt. | Leslie Adkins/For the Sun-Times

Looking south at acreage at the southwest corner of Clark and Roosevelt. | Leslie Adkins/For the Sun-Times

“There’s no way to say that from Madigan’s point of view whether we’re on board or not on board because we don’t know what we’re getting on board for,” Brown said of the potential for the state to have to pitch in for the center.

While financing plans are unclear, Emanuel’s office on Wednesday said it would be a “tremendous investment in Chicago and the mayor is fully supportive of it.”

Rauner and Emanuel plan to officially announce and discuss the undertaking Thursday. A 10 a.m. news conference is planned on the site of the project.

The mayor’s office also emphasized the need for private funding, and the importance of Rauner’s ability to get it.

“The Mayor has been working with the Governor on this project for months and we know the Governor’s commitment is raising private funds to pay for it. Given the Governor’s background in the private sector we are fully confident in his ability to do just that,” mayoral spokesman Grant Klinzman said in a statement.

And during a meeting Wednesday with the Sun-Times Editorial Board, Emanuel gave approval to the governor’s plan to build a world-class tech park run by the University of Illinois.

Emanuel noted that the 62-acre site was sold in 2007 to General Mediterranean Holding of Luxembourg, which is owned by Nadhmi Auchi. He’s a British businessman born in Iraq who was convicted in 2003 in a corruption scandal in France.

The University of Illinois is planning a tech campus for this 62-acre site south of the loop. | Apple Maps

The University of Illinois is planning a tech campus for this 62-acre site south of the loop. | Apple Maps

“The property was going nowhere because” of Auchi’s involvement, Emanuel said.

“Now, there’s a possibility because of new people involved of making it actually go on the tax rolls. … This, to me, is a good idea. The governor has been talking about raising private capital for years, and I’m for that happening. Anything that brings more research, more talent, more engineering into the city [is a] win.”

Curt Bailey, president of the development company Related Midwest, said his firm acquired the land in 2015 from Auchi. Bailey on Wednesday would not say how much the land was acquired for or if Auchi, as has been reported, is still a stakeholder.

“We’re a private company. It was a private transaction and we have not disclosed that. …We don’t speak publicly to the press about that,” Bailey told the Sun-Times.

“I don’t spend a lot time thinking about things in the distant past,” he said.

The governor’s office said the vacant site’s troubled past ownership isn’t a concern: “The current owners are highly reputable and they have a great plan for that piece of property which we hope some day will come to fruition,” Englehart said.

Rendering of proposed Crescent Park. Supplied by marketing and communication for Related Midwest.

Rendering of proposed Crescent Park. Supplied by marketing and communication for Related Midwest.

The vacant spot has a long history.

In 1993, there was talk of building a 150-acre theme park and up to five gambling boats docked on a manmade body of water adjacent to the Chicago River. In 2002, a company co-founded by Rezko drew up plans for a mixed-use plan with homes and retail space. There were also discussions about building an IKEA there, which didn’t come to fruition. Finally in 2016, Related Midwest and General Mediterranean Holding reached a deal to develop the site together.

The research facility is to be built on riverfront land just east of the Chicago River, south of Roosevelt Road, west of Clark Street, and bordered to the south by Ping Tom Memorial Park in China Town. The vacant property is criss-crossed by old rail lines and occupied by homeless squatters who live in tents.

Altogether, the land is worth about $151.1 million — more than $2.4 million per acre, according to the Cook County assessor’s office. But the ownership group, Roosevelt/Clark Partners LLC, has appealed that valuation.

The center would serve graduate and undergraduate students from the state’s three universities — Urbana-Champaign, Chicago, and Springfield. Students would spend one to four semesters living in Chicago while working at DPI and at businesses and startups in the city.

It would also bring in students and support faculty from Northwestern and the U of C.

University of Illinois President Tim Killeen sees the center as a way for the state to retain talent.

“If you look at the state of Illinois we know there is a net outflow of college-ready high school graduates to the tune of about 16,000 a year,” Killeen said. “We want to reverse that arrow if we can,” he said, noting that the goal would be to keep that brain power, degree in hand, in Illinois to build the sort of tax base that creates a healthy state.

The massive endeavor will not raise the tuition of U. of I. students, he said. The campus will have the ability to grant credit hours, but not degrees, Killeen said.

Plans also include using 40 percent of the land for a public park in the shape of a crescent — an homage to the original shape of the river on the site before it was straightened in the 1920s to accommodate barge traffic.

The site will also include a 100-feet wide riverwalk that developers said will be part of a larger plan to build a continuous river walk extending to Wolf Point.

Rendering of proposed riverwalk. Supplied by marketing and communication for Related Midwest.

Rendering of proposed riverwalk. Supplied by marketing and communication for Related Midwest.

Bailey plans to donate a portion of the land for use of the project, but would not disclose how much of the land would be donated, or exact plans for the remainder of the property.

He did say though that he envisions a place that includes, residential, commercial and entertainment that would become a tourist destination.

“What we are building is what we refer to as 78 — the city’s 78th neighborhood,” Bailey said.

“We’re working hard to get this going as fast as we can,” he said of the groundbreaking, for which there was no date. “There’s been a significant amount of dollars raised by investors.”

The plot had a different shape at the turn of the 20th century, according to Josh Ellis, vice president of the Metropolitan Planning Council. The natural course of the Chicago River’s south branch jutted eastward toward Clark Street, creating a dogleg that was difficult for shipping barges to navigate.

That prompted Daniel Burnham to straighten that stretch of the river into a canal as part of his 1909 Plan of Chicago, Ellis said. Crews churned up land and moved it 500 feet east to complete a smooth shipping channel between 18th Street and Polk by 1928.

Railroad tracks used to run through the plot to a passenger train station near Wells Street south of Harrison.

Other than that, the plot has overgrown with brush, hosting only homeless encampments and the occasional movie shoot for the better part of a century, Ellis said. Despite the seemingly prime riverfront real estate, a series of development plans, mostly for residential buildings, have come and floundered.

“The physical size of a project like this warrants a level of investment requiring many partners and execution over a long time frame,” Ellis said. “If any of that falls through, or if you hit a downturn in the economy, it derails the project. It’s hard to keep up the momentum.”

Ellis said the idea is similar to UI Labs, a tech hub associated with the University of Illinois and Argonne National Laboratory that opened on Goose Island in 2015.

“What takes this new plan beyond anything we’ve seen before in Chicago is that they’re creating a physical location for multiple universities and multiple faculties to be in the same place as this innovation hub,” Ellis said.

“It wouldn’t simply be a 2017 version of past proposals. This commitment to employment on-site ensures that people will be there utilizing the space beyond simply living there.”

Contributing: Fran Spielman

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