Gov. J.B. Pritzker picked a development team Wednesday that will take over the James R. Thompson Center in the Loop, favoring a plan that would preserve the 17-story building.
Pritzker chose a proposal from a group led by Michael Reschke, chairman of Prime Group, a longtime developer in the region. His plan calls for preserving the building as a mixed-use property with office, retail and hotel space — and with the state retaining about a 30% ownership.
In a move sure to be hailed by preservationists, Reschke will pay $70 million upfront and the state will retain some offices in the Thompson Center.
State officials had received proposals from two groups vying for the building.
Reschke said he expects the sale to close within six months and renovations to start within a year. He said the project — a “gut renovation” including a new glass curtain wall and mechanical systems — should take two years from start to finish, with a budget of $280 million.
Reschke said members of the development group initially “were a bit cynical, because of the reputation the building had. But we took a very hard, conscientious look at the opportunity to make further investment in LaSalle Street, for the benefit of local businesses, the city and the state.”
The former home of state government in Chicago opened in 1985 and was designed by the internationally acclaimed architect Helmut Jahn, who died in May. Preservationists have argued the Thompson Center, with its soaring atrium and generous public space, is a postmodern landmark and keeping it would honor Jahn’s contributions in his hometown.
Detractors regard the design as dated and inefficient. Pritzker was in their ranks. His administration has repeatedly called the building “oversized, outdated and expensive,” estimating it would require $325 million in repairs. He bumped up that estimate Wednesday to more than half a billion dollars. The state skimped on maintenance over the years and experts said it cut corners during construction, such as rejecting double-pane glass for single-pane.
Reschke called the building’s issues “very manageable.” Chief among those are sun glare and its propensity to overheat at all times of the year.
“It’s been a nightmare to control. The temperature in the building constantly requires air conditioning,” he said. “The heat gain from the sun is so strong that the air conditioning needs to run in the middle of January.”
A new curtain wall will fix that problem and slash energy costs by half, according to Reschke.
Pritzker has said the building never lived up to Jahn’s “creative genius.” But the proposal accepted Wednesday represented a partial change of heart. Pritzker not only signed on to a preservation plan, but he agreed to keep 425,000 square feet of state offices there.
The governor said Reschke’s plan “offered the best vision for the building’s future, preserves the transit hub and yields tremendous cost savings on this property.”
He said the state still is consolidating its space downtown, which will save $20 million annually over 30 years. The state bought an office building at 555 W. Monroe St. and has moved some agencies there.
In offering the site via a “request for proposals,” the administration chose a flexible process that let it consider several factors, such as quality of design, rather than being forced to take the highest bid. In the end, the state took the highest bid financially but also the one deemed less risky, said Ayse Kalaycioglu, chief operating officer of the Department of Central Management Services, the agency in charge of reviewing the proposals.
She said the rejected bid came from developer Bob Dunn, who wanted to demolish the Thompson Center in a favor of several high-rises. Dunn is the developer advocating the proposed One Central residential and commercial project near Soldier Field, a site he also has offered for a casino.
The City Council has rezoned the Thompson Center’s full-block site at 100 W. Randolph St. so a high-rise could be built there. The state might have realized a higher price for the property from a buyer who wanted to tear it down and start over, but trends in the market have made that investment risky.
Preserving the building will win acclaim from architectural enthusiasts, who were critical of Pritzker’s original inclination to seek top dollar for the building, increasing the chances for a teardown.
Pritzker said the $70 million sale agreement was made with “the blessing” of the late former Gov. Jim Thompson’s family, and that the governor’s office “will be looking to determine another opportunity to honor his tremendous legacy for this state.”
While the state indeed will get upfront cash for the property, the deal is more complicated. Terms have to be finalized, but senior CMS officials said the state will have two options: paying $148 million for its share of capital improvements over two years or paying over 30 years the equivalent of below-market rents. The state would own the space, however.
Reschke said that whichever term the state chooses, it will be getting modern, efficient space. “It’s going to be a beautiful work environment,” he said.
The developer’s partners in the venture include Jahn, the late architect’s former firm, now being led by Philip Castillo. Chicago-based W.E. O’Neil Construction also is part of the team.
Ward Miller, executive director of the group Preservation Chicago, said he was thrilled with Pritzker’s announcement. He said city officials should give the Thompson Center official protection as a landmark to assure it is never again faced with demolition.
Preservation Chicago and Landmarks Illinois both have placed the building on their lists of “most endangered” buildings of distinction.
The Illinois Historic Sites Advisory Council, a state agency, recommended in June that the Thompson Center be nominated for the National Register of Historic Places. The decision was nonbinding on the Pritzker administration, which has not forwarded the nomination to the federal government. The listing would not have ruled out demolition in any case.