* Sun-Times…
The developer of the One Central site near Soldier Field said Wednesday he is pushing for state legislation to expedite the massive project while leaving its financial risk with him and not the taxpayers.
Robert Dunn, president of Landmark Development Co., said the site is so attractive that he’s willing to pay upfront an estimated $3.8 billion for a transit hub that will improve access and business for adjacent attractions such as the museums and McCormick Place.
The transit hub would connect the CTA’s Orange Line, two Metra lines, Amtrak and a dedicated bus lane, now little used, that shuttles McCormick Place users to and from downtown.
On a deck he would build over the Metra tracks, Dunn foresees a high-rise collection of perhaps 10 buildings covering residential and commercial uses, almost a self-contained city for the Near South Side.
The resulting commerce and tax revenue should earn the project support from the Legislature, government agencies and a public that’s become critical of tax subsidies for developers, Dunn said.
This, in total, is a $20 billion project, which could be the largest in the city’s history…
A consultant’s report prepared for the Chicagoland Chamber of Commerce said One Central could support 70,000 permanent jobs and generate $120 billion in state and local tax revenue over 40 years of operation.
* There is a public funding component…
Under the proposed financing plan, the developer and investors would pay the upfront construction costs for the transit center, which is expected to take three years to build.
Afterward, the developer and the state would together pay off the cost of the station using new tax revenues and income generated from leases of restaurant, retail and entertainment spaces in the multi-level center, as well as parking revenue and other funds. After 20 years, the state would assume ownership of the transit center and would keep all revenues generated, Dunn said.
* Why the push to get this done during spring session?…
Landmark also plans to seek federal funding that could reduce the state’s financial obligation by more than $1 billion over 20 years, Dunn said.
The deadline for applying for those federal dollars is the end of this year, but he can’t do it unless the state is officially on board.
* Crain’s…
Still, asking Governor J.B. Pritzker or other Illinois leaders for anything these days seems like a long shot given the state’s precarious fiscal condition. They are more interested these days in selling properties, like the Thompson Center in the Loop, so they can raise money to balance the state budget.
That’s… not how this would work.
The state’s end would only come out of the new state tax revenues it would receive from the project. The developer told me the state itself would have to certify the actual revenues it realized. No state payments would be made while this massive project was being built over a projected three years, even though the state would likely reap some money from income and sales taxes.
So, the state wouldn’t lose money it would normally expect to receive because nothing exists at that site right now.
The state will eventually give up a chunk of income, sales and other tax revenues from the project in exchange for ownership of the property. And if the development goes bust and doesn’t generate tax revenues, the state wouldn’t have to pay another dime, according to the developer. After 20 years, the state would keep all tax money generated at the site.
* And that state ownership is key. The property would be valued at billions of dollars, and the state could conceivably transfer that value and the resulting income to, for instance, the pension funds.
I’d like to see the fine print first, especially as it pertains to the state’s responsibilities.
But this developer says he will invest billions of dollars of private money upfront into building a massive public transit hub, so he should be taken seriously for that reason alone.
More background on the developer is here. The glossy flier the developer is handing out to legislators is here.
- OneMan - Thursday, May 2, 19 @ 11:44 am:
As long has Metra and everyone gets a better committment to the maintenace of the airspace and decking over the track than Amtrak seems to have with landholders with airspace over the tracks going into Union Station this seems like a no-brainer.
- Cheryl44 - Thursday, May 2, 19 @ 11:57 am:
I don’t mind the transit hub, but what happened to keeping the lakeshore forever open, free and clear?
- Been There - Thursday, May 2, 19 @ 11:57 am:
This appears great but not sure about the financials. They must have some pretty trusting bankers or clients with deep pockets who like to take risks. And the legislation better take into account the various government agencies involved. But I hope they can make it work.
- Rich Miller - Thursday, May 2, 19 @ 12:01 pm:
===keeping the lakeshore===
It’s inland. And there’s already a huge building called McCormick Place between it and the lake.
- Been There - Thursday, May 2, 19 @ 12:06 pm:
===I don’t mind the transit hub, but what happened to keeping the lakeshore forever open, free and clear?===
This isn’t the lakefront. It’s west of lakeshore drive and over existing railroad tracks. I always wondered why Lucas didn’t try and build his museum there.
- wordslinger - Thursday, May 2, 19 @ 12:14 pm:
–But this developer says he will invest billions of dollars of private money upfront into building a massive public transit hub, so he should be taken seriously for that reason alone.–
Absolutely. Let’s see what he has.
This proposal certainly deserves more attention than the usual crowd that promises the moon but wants the taxpayer to commit first.
See Racine County for an example on how not to do it.
They’ve pushed dozens of families out of their homes and seized farmland under eminent domain, taken on $350 million in debt, and all they’re getting from Foxconn is the runaround.
https://www.wsj.com/articles/foxconn-tore-up-a-small-town-to-build-a-big-factorythen-retreated-11556557652
- JS Mill - Thursday, May 2, 19 @ 12:18 pm:
This seems worth a shot.
- Smalls - Thursday, May 2, 19 @ 12:30 pm:
Here is the issue I see with it. “New tax revenue” is only realized if people move in from out of state. Otherwise, all we are doing is redistributing where people currently live, and the tax revenue that those people currently generate for wherever they live now. There is no new Net tax revenue without people moving in from out of state. And that isn’t happening in Illinois. Not to say that it doesn’t deserve consideration, but this must be taken into account.
- A guy - Thursday, May 2, 19 @ 12:38 pm:
Hard to imagine a better deal to be had on that tract.
- City Zen - Thursday, May 2, 19 @ 12:45 pm:
==I always wondered why Lucas didn’t try and build his museum there==
Or the Obama Industrial Complex?
Any project that caps ugly transportation infrastructure and creates “new land” is worth a look.
- OneMan - Thursday, May 2, 19 @ 12:46 pm:
=== Here is the issue I see with it. “New tax revenue” is only realized if people move in from out of state. Otherwise, all we are doing is redistributing where people currently live, and the tax revenue that those people currently generate for wherever they live now. ==
What? So if I were to move from Aurora to a residence in this location because I have had enough of Metra, it isn’t like my previous home (even if I still own it) stops having property taxes paid on it. But that is property taxes, I get that.
But lets move on to sales taxes, there are some things I do in the city because it is really the only place I can do it, eat at specific resturants, see specific shows, visit specific clubs. I may not nessesarily spend that money on simular activities in other parts of the state. The dollars I spend going to a Sox game are not dollars I would spend at a Cougars game.
Rich had something this week or last week about Chicago being a brain magnet ( or something to that effect) I work in a place that attracts a large number of out of state new grads, these folks love places like this. It makes Chicago more attractive to these folks.
- TominChicago - Thursday, May 2, 19 @ 12:49 pm:
I can’t see how this transit hub would serve the Orange line which runs on elevated tracks just behind State Street at Roosevelt. This project would be about 5 blocks east of State.
- Former State Worker - Thursday, May 2, 19 @ 12:51 pm:
Almost seems too god to be true. The fact that they are pushing for this to be done quickly
I understand the deadline to apply for federal funds but is there a reason he has to apply for federal funds this year? Are these federal funds that won’t be available in 2020, 2021…?
- Rich Miller - Thursday, May 2, 19 @ 12:54 pm:
===would serve the Orange line===
The plan is to extend the Orange Line.
- Perrid - Thursday, May 2, 19 @ 12:59 pm:
Lightfoot seems pretty chilly to the idea, certainly to doing it quickly enough to approve it this year. She stressed she doesn’t know what the exact proposal is and is withholding judgment, but she did not seem welcoming to the idea in her interview.
- Blue Dog Dem - Thursday, May 2, 19 @ 1:02 pm:
This is absolutely the definition of crony capitalism.
How would you like to be a restaurant or small retail owner/operator knowing you are now competing against your own tax dollars.
- Rich Miller - Thursday, May 2, 19 @ 1:07 pm:
=== competing against your own tax dollars===
Only if you spend money or work at the facility.
- Grand Avenue - Thursday, May 2, 19 @ 1:07 pm:
Who owns the property now? Metra?
- wordslinger - Thursday, May 2, 19 @ 1:09 pm:
==I always wondered why Lucas didn’t try and build his museum there==
Arrogant, he was. Entitled, he believed.
Lucas demanded the choicest-of-choice waterfront properties, first at The Presidio in San Francisco (a national park), then on the lake in Chicago.
The irony is that he ended up in South Central LA by the Coliseum and USC. That ain’t exactly Malibu or Brentwood.
- Blue Dog Dem - Thursday, May 2, 19 @ 1:14 pm:
CTA money is pooled from the entire region
. Wouldnt any business person love to have thousands of customers dumped at their doorsteps daily?
- Lt Guv - Thursday, May 2, 19 @ 1:19 pm:
==I can’t see how this transit hub would serve the Orange line which runs on elevated tracks just behind State Street at Roosevelt. This project would be about 5 blocks east of State.==
Take a look at the brochure. It shows they plan to build an Orange line spur to the station.
- wordslinger - Thursday, May 2, 19 @ 1:24 pm:
–This is absolutely the definition of crony capitalism.–
$3.8 billion upfront?
This from the guy who wants tariff protectionism for himself and tells the farmers who got hosed because of them to pound sand.
- yellow card - Thursday, May 2, 19 @ 1:31 pm:
70,000 jobs and 120 billion in revenue? Come on man - looks like the old give me money for a new stadium con
- Blue Dog Dem - Thursday, May 2, 19 @ 1:34 pm:
Fair trade and free trade are two different animals.. $1 billion in upfront federal money.
- lake county democrat - Thursday, May 2, 19 @ 2:01 pm:
Lucas’ last lakefront site was not “the choicest of choice waterfront properties” - go there on the nicest of summer weekends and you don’t see very many people - some of it is a parking lot and he was willing to swap space for greenery. I didn’t like the initial blog design but it would have added to Chicago’s “critical mass” of tourist attractions and created jobs at no true cost to lakefront space. I’m not a huge Rahm fan but he was right about this one.
- lake county democrat - Thursday, May 2, 19 @ 2:04 pm:
Curious: how “filled to capacity” is Midway in terms of flights and % bookings on those flights? Also would be interested if this could play into a third airport or expanded use of Gary International.
- wordslinger - Thursday, May 2, 19 @ 2:07 pm:
–Lucas’ last lakefront site was not “the choicest of choice waterfront properties” - go there on the nicest of summer weekends and you don’t see very many people - some of it is a parking lot–
LOL, really? People don’t hang out in lakefront parking lots on the weekends? That doesn’t change its location.
People don’t hang out at Lakeside Center or Soldier Field when there’s nothing go on, either. Does that mean those aren’t on prime real estate, too?
- illinoisvoter - Thursday, May 2, 19 @ 2:20 pm:
Is there any clarity on ” entertainment spaces ” ?
If it’s a another way of saying casino that’s fine, but please don’t surrender the rights of the stakeholders without their input.
- Chicagonk - Thursday, May 2, 19 @ 2:35 pm:
The Orange Line extension spur makes no sense, but other than that the project seems reasonable. There is a CTA 146 bus that works just fine.
- Six Degrees of Separation - Thursday, May 2, 19 @ 2:50 pm:
===Who owns the property now? Metra?===
Mostly the Canadian National RY (CN), formerly the Illinois Central. The old IC made a ton of $$$ off of air rights just like this, with the Prudential Building, Illinois Center, and others who built over their tracks that were once a downtown rail yard on the south side of the Chicago River.
- Rich Miller - Thursday, May 2, 19 @ 3:00 pm:
Six Degrees of Separation, it’s the air rights that matter here. Another developer owns them.
- Unle Ernie - Thursday, May 2, 19 @ 3:42 pm:
I sounds to good to be true, but it must be examined. If it is built as proposed and becomes a major hub, what will it to the loop? Downtown Chicago is blessed with people wanting to move in, will this start to give people a reason to move out, to the near South Side? Still it has to be explored by reasonable people, not crony’s. Remember, if it looks too good to be true…
- City Zen - Thursday, May 2, 19 @ 4:06 pm:
==The Orange Line extension spur makes no sense==
This might not be a traditional spur like the Green Line has with A/B trains running east/south. Since Orange Line trains basically make a continuous loop from Midway back to Midway, each train will probably turn into the development going to and coming from the Loop.
- wordslinger - Thursday, May 2, 19 @ 4:20 pm:
–looks like the old give me money for a new stadium con–
Not if the $3.8 billion up front is real.
- Chicagonk - Thursday, May 2, 19 @ 5:09 pm:
@CityZen - So why would the city want to tack on an additional 10 minutes to every Orange line rider’s ride (not to mention anyone that uses the Orange Line to and from Midway from downtown)?