Emanuel starts third search for riverwalk developer

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Mayor Rahm Emanuel’s dream of transforming the downtown riverfront into a public space that will someday rival Millennium Park was starting to come into focus last spring.

When the two-block stretch between LaSalle and State streets opened in May, it quickly became a public magnet. The same is likely to happen when the final segment is completed this fall, providing a continuous pedestrian walkway from Lake Shore Drive all the way to Lake Street.

Why, then, is City Hall having so much trouble attracting a development team capable of adding 100,000 square feet of retail space and generating enough revenue to not only pay off a $99 million federal loan used to build the riverwalk but make the entire amenity “self-sustaining”?

Two years after a 343-page request for proposals attracted only one bidder, the Emanuel administration has decided to start the competition all over again.

“While we had productive discussions with [Riverwalk Partners LLC], the sole bidder from the 2014 RFP, we will be producing a new RFP that will incorporate lessons learned from the riverwalk’s successful past year,” deputy mayoral press secretary Shannon Breymaier wrote in an email in response to questions from the Chicago Sun-Times.

“As anyone who visited the riverwalk over the summer can attest, the destination attracted huge crowds and vendors were also successful. … Ultimately, we want to ensure that the city gets the best possible deal for taxpayers, which is why we’re creating a new RFP to better reflect the riverwalk’s needs and attract new bidders.”

It will be the third time in five years the city has conducted a search for a riverwalk developer and landlord.

After canceling an earlier “request for qualifications” that attracted only three bidders, the Emanuel administration issued a new RFP in August 2014.

It invited competitors to propose a “variety of financial structures” with the goal of making the downtown riverwalk a “self-sustaining amenity and asset.” The only stipulation was that they develop, promote, operate and maintain the entire riverwalk — not individual chunks.

It’s not clear whether that will change the third time around.

Under pressure to generate enough revenue in the meantime to repay the $99 million federal loan, the city is forging ahead with yet another RFP — this one to identify a third boat dock operator that would operate year-round from a site east of the Columbus Drive bridge.

It calls for “unique entertainment options other than architectural tours that differ from” existing boat contracts.

“We look forward to receiving creative concepts that could include water-specific tours of the Chicago River, like dinner boat tours or themed cruises. The goal is to further enhance the riverwalk and the river as a recreational destination,” Breymaier wrote.

The city is already repaying a “significant portion” of the 35-year federal loan with fees paid by tour boats using two city-owned docks where Michigan Avenue meets the river.

Those contracts were re-bid to boost city revenues. They prohibit operations between Jan. 15 and March 1.

The third boat dock operator would be permitted to operate year-round. Site improvements would not only be “permitted, but encouraged.” They could range from ticket offices, elevators and dockwall protection to retail stores, food and beverages stands, restaurants and cafes, the RFP states.

As a result of what could be a costly capital outlay by the new boat dock operator, the bid document envisions a 10-year contract with up to five, five-year extensions. That’s 35 years total.

Downtown Ald. Brendan Reilly (42nd) was hard-pressed to explain why the city is having such a difficult time finding a riverwalk developer.

“I honestly don’t know enough about how they’ve been packaging these RFPs,” Reilly wrote in an email to the Sun-Times. “It’s an incredibly valuable asset with tremendous upside. I suspect bidders may want longer-term control of the Riverwalk, which isn’t necessarily in the city’s best interest [see Parking Meter Deal, etc.]”

The fits and starts on the riverwalk project are not unique to Emanuel.

Former Mayor Richard M. Daley’s plan to build a San Antonio-style riverwalk initially called for the city to spend up to $50 million in federal money to build a river-level boardwalk from Michigan to Lake that would have included 35,500 square feet of retail and restaurant space, along with docks for tour boats and water taxis.

When the work was done, the city would have turned over the riverwalk to a private management company.

But when Daley tried to tackle the project in one fell swoop, only one company responded to the RFP. City Hall decided to toss out the lone bid and restarted the competition in smaller bites.

After filling in the “missing links” in the Wacker Drive riverwalk, the city agreed in 2009 to design the rest even though Chicago taxpayers still didn’t have the money to build it.

The Daley administration issued another RFP for firms interested in designing the final phase of the riverwalk, the six-block stretch between State and Lake streets. But Daley left office before the dream could be realized.

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