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Pritzker announces finalized Thompson Center purchase and sale agreement

Thursday, Mar 31, 2022 - Posted by Rich Miller

* Press release…

Governor JB Pritzker and the Illinois Department of Central Management Services (CMS) announced today that the sale of the James R. Thompson Center at 100 West Randolph Street has reached another major milestone by executing the Purchase and Sale Agreement with JRTC Holdings, LLC.

“I’m pleased to announce that we have finalized a purchase sales agreement for the James R. Thompson Center, not only saving taxpayers $800 million but also adding vitality to Chicago’s LaSalle Street corridor by honoring the original design through a modern lens,” said Governor JB Pritzker.

In December 2021, the State announced the selection of JRTC Holdings, LLC as purchaser of the building, following the competitive Request for Proposal process. As part of this public-private partnership structure, the State will receive a $70 million up-front payment for the purchase of the property while retaining approximately 425,000 sq ft of newly renovated, Class-A office space. The Purchase and Sale Agreement, executed in advance of the legislative deadline outlined in SB 886 (Public Act 100-1184), establishes the terms and conditions for the transfer of the property. The financial closing and transfer of title on the property is anticipated to be completed in the summer of 2022. The State and the purchaser are working together to finalize the floor plans and interior design to be occupied by the State.

The execution of the Purchase and Sale Agreement is a significant milestone and represents our commitment to renovate and reposition this iconic building into one of the premier Class A office buildings in the city with the latest building systems and technologies to promote the health, wellness, and comfort of its occupants,” said Michael W. Reschke, owner of JRTC Holdings LLC, the buyer, and Chairman & CEO of the Prime Group, Inc. “Our investment will anchor and support the Loop’s continued economic revitalization and will boost the much-anticipated renaissance of the LaSalle Street corridor.”

CMS continues to realign the State’s real estate portfolio to maximize space utilization in state-owned and leased properties. The effort to identify efficiency improvements, space consolidation and the cost avoidance, including avoiding the backlog of required JRTC capital improvements, will result in over $800 million in taxpayer savings.

“The sale of the operationally and financially inefficient JRTC has been talked about for nearly two decades,” said Director of CMS Janel L. Forde. “This project demonstrates how innovative approaches can attract private investment and result in partnerships that provide substantial financial benefit to the State and its taxpayers.”

Two determining factors in the State’s decision to sell the JRTC were the prolonged deferred maintenance backlog as well as high operating expenses. The estimated cost to bring the JRTC into a state of good repair currently exceeds $325 million, and is projected to increase to over $525 million, if not addressed by 2026. Additionally, the State is paying more than $17 million annually due to the building’s operational inefficiencies. Under the Purchase and Sale Agreement, JRTC Holdings, LLC will replace the building envelope and mechanical systems and make the necessary interior repairs to transform the building to a multi-tenant, mixed-use Class A office building.

“The State of Illinois secured attractive office space while reducing its footprint by nearly 650,000 square feet and annual operating expenses by over $10 million through creative procurement strategies and negotiation,” said Chief Operating Officer of CMS and JRTC Project Executive Ayse Kalaycioglu. “The State’s effort to optimize its portfolio will result in more than $800 million savings as well as office space better suited for modern government.”

According to JRTC Holdings, LLC, the JRTC renovation is expected to begin later this year following the financial closing and take approximately two years to complete. The scope of work will include replacement of the exterior curtain wall with new, energy-efficient glass, enclosure of the office floors from the atrium with a new glass partition, private lobby and a dedicated secure entrance for the State offices, replacement or upgrades to the building systems including the heating, ventilation, and air conditioning, and full renovation of the State’s offices on floors 4 through 9.

A portion of the State workforce will remain in the JRTC and the State will also relocate operations there from the terminated Loop leases into temporary occupancy floors. JRTC Holdings, LLC and the State are developing plans to ensure continuity of State and retail operations during construction. The proposed renovations will not require any shutdown to Chicago Transit Authority operations. The developer has also committed to a minimum of 26% Minority and 6% Women Business Enterprise contract participation and developing an internship program with the general contractor.

About JRTC Holdings, LLC:
JRTC Holdings, LLC is owned and controlled by Michael W. Reschke. Since 1982, Mr. Reschke has served as Chairman, Chief Executive Officer or Managing Partner of various affiliated entities that developed over $12 billion of real estate projects across the United States. Under the leadership of Mr. Reschke, The Prime Group, Inc. became one of the pre-eminent real estate development companies in the country achieving repeated recognition for its dedication to world-class architecture, innovation, and state-of-the-art technology in its developments. Past projects including 77 W. Wacker, 180 N. LaSalle, Citadel Center, IBM Plaza, and 33 W. Monroe demonstrates their commitment to, and knowledge of, the Chicago real estate market including the Central Business District (CBD). The proposed team includes Jahn Architecture and Clark Construction to modernize and renovate the existing structure into a high-quality office building that places a premium on the JRTC’s location and access to public transportation.

       

32 Comments
  1. - The Dude Abides - Thursday, Mar 31, 22 @ 11:22 am:

    Wow, I have lived long enough to see this!


  2. - Cheryl44 - Thursday, Mar 31, 22 @ 11:27 am:

    I’m glad to see Jahn’s office involved in the renovation.


  3. - Arsenal - Thursday, Mar 31, 22 @ 11:28 am:

    Another long term state goal realized under Pritzker.


  4. - NonAFSCMEStateEmployeeFromChatham - Thursday, Mar 31, 22 @ 11:28 am:

    Any comment yet from the Helmut Jahn Fan Club? (aka Please Save the JRTC).


  5. - Huh? - Thursday, Mar 31, 22 @ 11:28 am:

    Wait a gul dern minute. I thought the Thompson center was sold by ruiner. /s


  6. - Oswego Willy - Thursday, Mar 31, 22 @ 11:29 am:

    Governors own.. in this case, sell.

    Someone send a postcard to the Floridian Rauner…


  7. - TheInvisibleMan - Thursday, Mar 31, 22 @ 11:33 am:

    If the laws of Thermodynamics didn’t exist, the JRTC building itself would be quite wonderful.

    I’ll always remember my visit first there in the 90s to file some paperwork for my first business. The atrium felt like it was air conditioned to keep ice frozen for eternity, while the small office I later entered was basically a furnace I could cook a pizza in fairly quickly.


  8. - Bigtwich - Thursday, Mar 31, 22 @ 11:40 am:

    We live in an age of wonders and miracles.


  9. - ChicagoBars - Thursday, Mar 31, 22 @ 11:46 am:

    A good day for taxpayers with the unloading of an architectural albatross, a dark day for dreamers of America’s greatest downtown water park.


  10. - Occasional Quipper - Thursday, Mar 31, 22 @ 11:51 am:

    == A good day for taxpayers with the unloading of an architectural albatross, a dark day for dreamers of America’s greatest downtown water park.==

    Well said (banned punctuation). Where’s the like button on this thread?


  11. - MOON - Thursday, Mar 31, 22 @ 11:54 am:

    This REDO will never be successful.
    The structure is and always will be obsolete.


  12. - Starter Stater - Thursday, Mar 31, 22 @ 12:05 pm:

    i don’t think this building was meant to be used for a productive purpose other than ooing/ahhing at the design. It’s gonna continue to be a money pit piece of art.


  13. - Big Dipper - Thursday, Mar 31, 22 @ 12:08 pm:

    I do hope they retire the salmon and robin’s egg blue color scheme.


  14. - Give Us Barabbas - Thursday, Mar 31, 22 @ 12:12 pm:

    The state of Illinois is a really bad landlord, and a poor tenant. The building now has an opportunity to work as intended, and I am happy for that. Spent many a time in there and its beautiful, even thru the damage and misuse. Watch the former Pepsi building undergo a similar slide of deferred maintenance when the state offices are fully installed there.


  15. - Candy Dogood - Thursday, Mar 31, 22 @ 12:12 pm:

    What a saga of our willingness to refuse to maintain a public asset until the most responsible option is to sell it.


  16. - Anyone Remember - Thursday, Mar 31, 22 @ 12:21 pm:

    ===The state of Illinois is a really bad landlord, and a poor tenant.===

    Landlord - ever see what happens to appropriation requests for maintenance?

    Tenant - ever read the minutes of the Procurement Policy Board meetings? Pay close attention to Ed Bedore, particularly during the Quinn Administration.


  17. - DuPage - Thursday, Mar 31, 22 @ 12:23 pm:

    How is JRTC Holdings LLC going to make any money on this? How much is the rent going to be for the state offices? What if JRTC Holdings starts on the project and goes broke? Details, details. I hope it works out, but I hope the state cashes the checks right away, just in case.


  18. - Joe Bidenopolous - Thursday, Mar 31, 22 @ 12:25 pm:

    =I do hope they retire the salmon and robin’s egg blue color scheme.=

    I seem to recall some folks calling it the seersucker building back in the day


  19. - OneMan - Thursday, Mar 31, 22 @ 12:40 pm:

    Wait, I thought there was going to be a water slide, that’s phase 2, right? Right?!


  20. - DEE - Thursday, Mar 31, 22 @ 12:43 pm:

    The renovation spotlight should now turn to shine its light across the street at the County/City building. It is a perfect setting for ‘The Untouchables’ but not County/City business.


  21. - thisjustinagain - Thursday, Mar 31, 22 @ 1:09 pm:

    I wish the buyer well; the State practiced “no maintenance” to a T there. (Remember, if you defer maintenance long enough, it never happened). Wonder if the State buildings in Tinley Park and Midlothian are next up for bid?


  22. - Blue Dog - Thursday, Mar 31, 22 @ 1:18 pm:

    Public asset or public liability. Me thinks it was the later.


  23. - Sue - Thursday, Mar 31, 22 @ 1:19 pm:

    Glad it got sold but for those critical of Rauner being unable to- remember he needed Madigan’s approval which wasn’t forthcoming. In retrospect- perhaps Rauner should have thrown some RE Tax work to the speaker. That seems to have been the magic potion to get Madigan’s blessing


  24. - RNUG - Thursday, Mar 31, 22 @ 1:23 pm:

    This deal sounds like something Big Jim would have pulled off back in his day.

    Finally someone is going to install the glass that should have been used in the first place instead of the cost cutting the State did to the original specifications. Once that is in place, it will be interesting to see how well the building functions. Only then will we know how good Jahn’s design was (or wasn’t).

    I’m an architecture fan and the family was in steel construction for about 70 years. I actually started college to be an architect before changing course, and own a historically significant home. So I’m glad to see the building is being saved.


  25. - NonAFSCMEStateEmployeeFromChatham - Thursday, Mar 31, 22 @ 2:04 pm:

    ==It is a perfect setting for ‘The Untouchables’ but not County/City business.==

    We all know it was a perfect setting for “Running Scared.”

    ==Wait, I thought there was going to be a water slide, that’s phase 2, right? Right?!==

    If it becomes a water park it will most likely be called “Mold Capitol of Illinois.”


  26. - Sue - Thursday, Mar 31, 22 @ 2:40 pm:

    Hold on- Trib just posted an on line story. The State is getting 70 million BUT once the building is renovated it is buying back 1/3 of the space and paying 148? Million so it is coming out of pocket a net loss of 78 million and giving up 2/3 of the Cdnter. All the state is avoiding is the renovation costs. I have a bridge to sell if JB is interested


  27. - low level - Thursday, Mar 31, 22 @ 2:45 pm:

    What will happen to the Food Court?


  28. - stateandlake - Thursday, Mar 31, 22 @ 2:46 pm:

    TheInvisibleMan @11:33a hit the nail on the head, and gave me a much-needed laugh!


  29. - stateandlake - Thursday, Mar 31, 22 @ 2:48 pm:

    TheInvisibleMan @11:33a hit the nail on the head, and gave me a much needed laugh. Thanks.


  30. - Demoralized - Thursday, Mar 31, 22 @ 3:17 pm:

    ==All the state is avoiding is the renovation costs==

    The state is avoiding the half a billion in deferred maintenance costs and getting a nice office space back. I don’t know about you but by my math $78 million is less than half a billion.

    Seems like a pretty good deal to me.


  31. - Sue - Thursday, Mar 31, 22 @ 3:39 pm:

    Demoralized- between the State of Illinois and one of the area’s saviest developers who do you think is getting the better desl. Come on man


  32. - Oswego Willy - Thursday, Mar 31, 22 @ 3:50 pm:

    ===who do you think is getting the better===

    Considering the state “sold” the JRTC no less than 3 times without actually selling it until now?

    Illinois got the better deal, and the developer gets a chance to make out on the deal too.


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