Mayor Johnson seeks more than $150M in TIF assistance for La Salle Street revamp

Mayor Brandon Johnson’s office is making good on its promise to not let the city’s record tax increment financing surplus interfere with transforming La Salle Street office buildings to residential use.

He announced four projects on Wednesday that he plans to formally propose for a combined $151.2 million in TIF assistance this spring. Johnson said the projects include a total of $528 million in investments.

The projects — including three shortlisted by former Mayor Lori Lightfoot — stand to create 1,037 new apartments with at least 319 projected to have affordable rents through TIF assistance. The affordable units would be reserved for tenants earning an average of 60% of the area’s median income, about $53,000 for a two-person household.

Johnson said Wednesday’s long-anticipated announcement signals a “full-blown march into an inclusive and vibrant future” for downtown Chicago.

“These four projects demonstrate our shared commitment to revitalizing downtown and creating affordable housing in every single neighborhood,” Johnson told a news conference at 208 S. La Salle St., one of the four projects.

“In what other city do you hear the words `downtown’ and `affordability’? We are a special city because we have a downtown Central Business District that can handle what it is doing today.”

Details on the proposed projects, along with the TIF amount:

• 111 W. Monroe St. — Prime Group and Capri plan to create 345 units with 105 earmarked as affordable through a requested $40 million TIF subsidy. The $202.8 million project will cover 14 floors within a pair of adjacent buildings, including a high-rise built in 1911. There’s also a 228-room hotel planned on the lower levels, which could be supported through a property tax incentive if the complex lands city landmark designation.
• 208 S. La Salle — Prime Group would convert four floors in the building into 226 apartments. Of those, 68 would be affordable through $26.2 million in TIF assistance. The TIF request is $6.8 million less than the original submission made last year.
• 30 N. La Salle — Golub & Co. and Corebridge Financial plan to create 349 apartments, including 105 affordable units. The $130.2 million project would span 14 floors in the 1975 high-rise and use $57 million in TIF assistance — $5 million less than what the developers requested.
• 79 W. Monroe — A $64.2 million project planned by Italy-based spirits company Campari Group would convert eight floors in the 1913 Bell Federal Savings & Loan building into 117 residences with 41 affordable units. Key architecture features — like the Weather Bell sign — would be restored and preserved. The project’s TIF request is $28 million.

Planning and Development Commissioner Ciere Boatright said the projects are expected to represent “one of the largest adaptive re-use efforts to move forward within any central business district” in the nation.

“These four buildings are sure to become poster children for the Loop’s rebirth as a mixed-use neighborhood,” Boatright said. “There is more to come as the city continues to study adaptive re-use proposals for historic buildings at 135 South La Salle Street and 105 West Adams Street.”

Tyler LaRiviere / Sun-Times

Genie Kastrup serves as president of SEIU Local 1, which represents over 50,000 people, including janitors, security officers, window washers, door staff, maintenance workers and engineers. She called her members the “backbone of the commercial and real estate industry.”

“My union is over 100 years old. And it is the first time in the history of our city where a janitor who works in a commercial office building who gets done, usually at 12:30 or one o’clock [in the morning] may be able to walk across the street to their home, instead of commuting an hour,” said Kastrup, whose union was among Johnson’s staunchest financial supporters.

After spending the first 11 months of his administration vetting the four projects for their financial viability and whittling down the TIF subsidies, Johnson said he has a “very aggressive timeline” to deliver the sorely-needed housing units.

Construction can begin only after several levels of approval — a process starting this spring — that include the Community Development and Landmarks Commissions, the City Council’s Zoning Committee and the full City Council.

Boatright said there are plans for leasing to begin in late 2026 or early 2027.

The development at 79 W. Monroe was added later “due to timing issues,” Boatright said, but “it was included later once we recognized that we had funding available.”

Aside from 30 N. La Salle St., the projects also have additional proposed funding sources, including low-income housing tax credits, tax-exempt bonds, federal loans and historic tax credits.

Provided

Reviving downtown’s foot traffic

Prime Group CEO Michael Reschke, a voice at the forefront of the Loop’s revival, said he views LaSalle Street as “probably the most beautiful street in Chicago.”

“In spite of all the architectural marvels we have and all the economic activity focused and centered on downtown Chicago, we have a shortage of housing — both market-rate, affordable and workplace housing,” he said.

These projects will add “that 24/7 vibrancy every day for people — everyone from Chicago — to live, work and play,” Reschke said.

Golub & Co., behind 30 N. La Salle, did not respond to requests for comment.

Michael Edwards, president and CEO of the Chicago Loop Alliance, welcomed Johnson’s decision to recommend TIF assistance for the projects.

“ It’s an important street in the Loop. We were very involved with the [Urban Land Institute] and the whole idea of creating these projects that need to be funded because the conversion of office to residential is expensive and a challenge anywhere in America, especially here in Chicago on La Salle Street,” Edwards said.

“ We think it’s extremely important that there is some significant reinvestment going on on La Salle Street. It’ll benefit the whole Loop.”

The Chicago Loop Alliance is conducting a study that “sort of positions downtown, the value of it, within the region over a number of different variables,” Edwards said. Against that backdrop, the city’s $150 million contribution toward converting largely vacant office buildings to residential use will “demonstrate its commitment to downtown,” he said.

Johnson has been “extremely thoughtful” in the 11 months since taking office to “make sure that these projects made sense in the whole scheme of things,” Edwards said. Now that he’s moving forward, the Chicago Loop Alliance is “very appreciative of that.”

Chicagoland Chamber of Commerce President Jack Lavin said La Salle Street Reimagined is very important to the future of downtown Chicago.

“If we’re not gonna have the same number of workers coming downtown, we need to evaluate how can we increase traffic. Residential and new kinds of commercial are both things that will do that,” Lavin said. “ If you can reimagine La Salle Street, you can create more foot traffic. You can create more energy, and that’s gonna be good for thousands of small businesses.”

Ald. Bill Conway (34th) said he’s “thrilled and grateful” that the four projects are “moving forward,” even after Johnson used some TIF surplus funds to balance his first budget.

“The Central Business District can’t just be a place where people work, based on how work has changed in a post-pandemic environment. It has to be multi-use, where people can live, eat, shop and visit,” Conway said. “These four projects will help catalyze that effort. ... People are struggling with homelessness and rising costs. Having these over 300 affordable units will help those issues as well.”

Anthony Vazquez/Sun-Times

La Salle Street Reimagined

In late 2022, Lightfoot’s La Salle Street Reimagined initiative invited developers to submit proposals for reducing vacancies in office and retail space in what was Chicago’s nerve center for finance. Developers had a big incentive to play along: The city was dangling millions of dollars in tax increment financing as potential subsidies.

The three original winners — which doesn’t include 79 W. Monroe — were drawn from six shortlisted responses to the city’s call. The city’s Department of Planning and Development scrutinized the entries.

Boatright said the two other shortlisted projects, 135 S. La Salle St. and 105 W. Adams St., will likely be announced later. “They’re still in underwriting and we’re committed to work with the development team to move those projects through the process,” she said.

The four projects highlighted by Johnson’s office could start construction in early 2025 if approved, slashing the estimated 5 million square feet of empty commercial space within the La Salle corridor by more than 25%, according to Boatright.

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