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* Press release…
Governor JB Pritzker today announced the selection of a proposer for the sale of the James R. Thompson Center (JRTC). After a competitive Request for Proposal (RFP) process to select a purchaser for the JRTC, the State plans to enter into exclusive negotiations with JRTC Holdings, LLC for the purposes of acquiring and redeveloping the site located at 100 West Randolph Street.
Following the evaluation of submitted proposals, the State elected to move forward with a public-private partnership structure, which includes:
• An up-front payment of $70 million to the State for the purchase of the property
• The selected purchaser preserving and substantially renovating the JRTC
• The State purchasing and occupying approximately 425,000 sq ft of newly renovated, Class-A office space at the JRTC
• The State will save approximately $20 million a year for the next 30 years through operating cost reductions and lease consolidations alone.
• The redevelopment of the JRTC is expected to result in thousands of new construction jobs, new tax revenues for Cook County, the City of Chicago, and its sister agencies, while maintaining thousands of jobs and operations with heavy public interactions in the LaSalle Street corridor“Today I’m proud to announce that for the first time, we’re taking a massive step forward with a plan that will result in the sale of the Thompson Center and that will save taxpayers $800 million,” said Governor JB Pritzker. “I came into office with a promise to manage state government resources more efficiently and to support local governments. By returning vital real estate in downtown Chicago to private ownership, tens of millions in revenue will be generated for Chicago Public Schools and for property taxpayers. This is a new era of responsible governance for Illinois – one that protects our taxpayers, and fosters the jobs and opportunities that working families deserve.”
From the beginning of the Pritzker administration, the Department of Central Management Services (CMS) not only prioritized completing the long-anticipated sale of the JRTC and the timely relocation of State offices and employees, it also focused on the realignment of the State’s real estate portfolio and looked for consolidation opportunities to maximize space utilization in state-owned and leased properties. This effort to identify opportunities for efficiency improvements, space consolidation and the cost avoidance of deferred maintenance repairs will result in over $800 million in taxpayer savings.
“The State can no longer afford to support unsustainable costs for the maintenance and operation of the JRTC or delay its disposition,” said Director of CMS Janel L. Forde. “This strategic public-private partnership allows us to retain a smaller presence in the property while partnering with an established development team to transfer significant financial risk and responsibility for the much-needed capital improvements at the JRTC to a third-party.”
* Renderings and other stuff…
Here is the architectural renderings of what the Thompson Center will look like after a $280 million dollar makeover that is expected to take two years pic.twitter.com/5UBd5cXQTz
— Craig Wall ABC 7 (@craigrwall) December 15, 2021
Prime Group principal Michael Reschke: "were a bit cynical because of the reputation building" but "we took a very hard conscientious look at the opportunity."
Reschke says his firm does NOT plan to demolish the building, which would be an "absolute travesty."— Alex Nitkin (@AlexNitkin) December 15, 2021
Reschke says the open atrium "is the strength of the building and will be the feature of the building going forward" but a new glass curtain wall will be installed to address problems like acoustics, which he says are "horrible" under current conditions.
— Alex Nitkin (@AlexNitkin) December 15, 2021
Reschke says he hopes to close the sale with the state by mid-2022 and get shovels in the ground by end of next year.
— Alex Nitkin (@AlexNitkin) December 15, 2021
Renovation will take 2 yrs, Reschke estimates. It could be quicker, but they want to keep the building open during the process. Says state will continue to lease offices here:
Total project cost estimate: $280M.
— Alex Nitkin (@AlexNitkin) December 15, 2021
…Adding… Lots more at Crain’s, including high resolution pics. Click here.
posted by Rich Miller
Wednesday, Dec 15, 21 @ 12:18 pm
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Additional note from Nitkin’s tweets:”Reschke says the renovation will not disrupt any service at the Clark/Lake CTA station, which is the busiest in the city.”
Comment by Linus Wednesday, Dec 15, 21 @ 12:23 pm
This is great news for Illinois, but a sad, sad day for the hopes and dreams of a downtown Chicago water park for Scott Kennedy.
Comment by Baloney Wednesday, Dec 15, 21 @ 12:25 pm
It should be worth noting that the State of Illinois is only selling the building because of deliberate and intentional neglect of capital maintenance for many decades.
It’d be swell to sell the building to a private firm that is willing to actually maintain the building.
We don’t adequately fund the agency that’s supposed to take care of children, so it does make a lot of sense that we wouldn’t pay to keep up a building.
Comment by Candy Dogood Wednesday, Dec 15, 21 @ 12:25 pm
Overall pleased with this. I wouldn’t have been against simply demolishing the thing either, but it seems the state is selling a controlling stake, saving money, and the building will get a new lease on life, so there’s not much to be mad about on the surface.
Comment by Nick Wednesday, Dec 15, 21 @ 12:31 pm
“We took a look at the problems that plagued this building since 1985…and those problems, we found, were very manageable.”
Took these guys months to figure out what the state couldn’t figure out in 35 years.
Comment by City Zen Wednesday, Dec 15, 21 @ 12:31 pm
Landscaping sounds great but plants will add a lot of humidity.
Comment by very old soil Wednesday, Dec 15, 21 @ 12:32 pm
Were their any other bidders or plans?
Comment by DuPage Saint Wednesday, Dec 15, 21 @ 12:39 pm
When Rauner first proposed selling the JRTC weren’t they projecting a $300 million net gain for the budget from the sale? I know that downtown real estate has taken a hit during the pandemic but $70 million, even with a partial retention of an ownership stake, still seems disappointing.
Comment by The Captain Wednesday, Dec 15, 21 @ 12:44 pm
===Took these guys months to figure out what the state couldn’t figure out in 35 years.===
CMS - Can’t Manage (expletive deleted).
Comment by Anyone Remember Wednesday, Dec 15, 21 @ 12:45 pm
=== weren’t they projecting a $300 million net gain===
They also claimed they could sell it during the fiscal year.
lol
That’s kind of a tell.
Comment by Rich Miller Wednesday, Dec 15, 21 @ 12:54 pm
===Took these guys months to figure out what the state couldn’t figure out in 35 years.===
Being fair to CMS the solution was always pretty obvious: Spend a huge amount of taxpayer money to fix major design and construction problems when it blew it’s construction budget.
Comment by ChicagoBars Wednesday, Dec 15, 21 @ 12:54 pm
Yay! No matter how the problem got as bad as it did it is great to see the building stay and be improved.
Comment by DougChicago Wednesday, Dec 15, 21 @ 12:54 pm
“An up-front payment of $70 million to the State for the purchase of the property”
What happened to selling the building for $240 million? Talk about pennies on the dollar.
Comment by Huh? Wednesday, Dec 15, 21 @ 1:06 pm
$20 mill for 30 years is $600 million. Where is the other $200 million coming from?
Comment by Huh? Wednesday, Dec 15, 21 @ 1:09 pm
Governor Rauner made a lot of projections that didn’t come close to coming true.
Comment by Publius Wednesday, Dec 15, 21 @ 1:15 pm
I’m highly skeptical of this. The renderings look sleek but the structural components of the building are not great. I was in favor of the teardown but I guess we’ll see what they do with this. Either way I guess the state is out as an owner so that’s good news.
Comment by Boone's is Back Wednesday, Dec 15, 21 @ 1:27 pm
Every year the state kept the JRTC, it bled money. The bleeding will finally clot. Good move. Another item checked off of JB’s “to do” list.
Comment by levivotedforjudy Wednesday, Dec 15, 21 @ 1:28 pm
“The State purchasing and occupying approximately 425,000 sq ft of newly renovated, Class-A office space at the JRTC”
I thought the idea was to get rid of the building. It appears the State is selling it for pennies on the dollar and buying 1/4 of it back at an unknown price.
Comment by Huh? Wednesday, Dec 15, 21 @ 1:31 pm
Interesting set of ideas
1. Rebuild as original specs asked. Cuts were made to save $$
2. Seal off food court “aroma”
3. Program common space — auditorium, etc
4. Someone might want to rethink the work during construction idea — it will be a disaster.
Big Jim and Helmet will be pleased. GovJunk looks like a goof again —still.
Now the next real estate move is to bail on any tax $$ for The 78 (aka Rezko Acres)
Comment by Annonin' Wednesday, Dec 15, 21 @ 1:44 pm
Kudos for not just kicking this can down the road.
Comment by Downstate Wednesday, Dec 15, 21 @ 1:49 pm
What does that mean for the new building that the State purchased (the former Pepsi bldg on Monroe)? My agency has already moved into the new building, are we going to sell it and move back?
Comment by Ferris Bueller Wednesday, Dec 15, 21 @ 1:55 pm
===Kudos for not just kicking this can down the road.===
This is - Lucky Pierre - kind of default silly.
To the post,
The real, tangible difference between Rauner and Pritzker is doing the doable.
This idea that something “should” be done is different when you see something actually “being” done.
The L stops, saving that corner, money upfront, renovations, keeping the architecture (if that was a worry for you) and the property is off the books.
So…
=== • An up-front payment of $70 million to the State for the purchase of the property
• The selected purchaser preserving and substantially renovating the JRTC
• The State purchasing and occupying approximately 425,000 sq ft of newly renovated, Class-A office space at the JRTC
• The State will save approximately $20 million a year for the next 30 years through operating cost reductions and lease consolidations alone.
• The redevelopment of the JRTC is expected to result in thousands of new construction jobs, new tax revenues for Cook County, the City of Chicago, and its sister agencies, while maintaining thousands of jobs and operations with heavy public interactions in the LaSalle Street corridor===
… this is kicking any can down any road? Please.
I’m intrigued to this new vision, what it will mean and how it will be seen in context to what exists now, and it’s tangible, it’s something seen as an accomplishment, start to finish.
This is governing happening.
Comment by Oswego Willy Wednesday, Dec 15, 21 @ 2:02 pm
“Where is the other $200 million coming from?” Skybox revenue?
Comment by Skeptic Wednesday, Dec 15, 21 @ 2:12 pm
I don’t love the idea that the building is staying, but with mass transit in the basement I don’t know how you knock it down and keep the trains running.
The second best proposal was for a tear down. And the state picked the best bid. I hope they fix the longstanding issues with the structure and it actually helps the state save money.
Comment by Cool Papa Bell Wednesday, Dec 15, 21 @ 2:26 pm
I’m highly skeptical of this.
-this is why you sit in the comment board and not at the table.
Comment by Real Wednesday, Dec 15, 21 @ 2:36 pm
==I don’t love the idea that the building is staying, but with mass transit in the basement I don’t know how you knock it down and keep the trains running.==
How about end its office building days and make it the James R. Thompson Transit Station? Keep the food court and make it like a mini-Union Station for that area of downtown.
Comment by NonAFSCMEStateEmployeeFromChatham Wednesday, Dec 15, 21 @ 3:19 pm
Hard to understand how selling an asset then renting it back for 30 years saves you money. The concept didn’t work out too well with parking meters….
Comment by Ben Tre Wednesday, Dec 15, 21 @ 3:47 pm
I’ll believe it when I see it. Reschke and Prime’s past dealings raise some concerns. See:
https://casetext.com/case/janssen-v-reschke
https://www.chicagotribune.com/news/ct-xpm-2002-04-03-0204030212-story.html
https://www.forbes.com/forbes/2002/0218/042a.html?sh=6e1e6126654c
Comment by SouthSide Markie Wednesday, Dec 15, 21 @ 3:50 pm
This proposal is an interesting take, and I hope they go through with it. I’d love to see even more renderings, particularly from the inside perspective. The food court was always a disaster in design terms with the kitchens venting into the atrium instead of outside. Curtain wall those kitchens off, for sure. Glad someone seems to give a blank about design, finally.
Comment by Give Us Barabbas Wednesday, Dec 15, 21 @ 4:24 pm
Say what you want about the building but it has been neglected for far too many years. Just happy to see most of the structure will be maintained out of respect to all the history of the building. Here’s to hoping the improvements will make this a suitable workplace going forward.
Comment by Whose post is it anyway Wednesday, Dec 15, 21 @ 4:28 pm
This deal has the potential for being a win for everybody. The State gets renovated office space, the building goes on the taxrolls, and the historic preservationists are happy. Based on the Crain’s article it looks like the State will still need the new Pepsi building but it would be interesting to see a breakdown of employees between the buildings. I also kind of like the idea of part of the building potentially being converted into a hotel. It certainly could have some built-in clientele from employees traveling from Springfield and elsewhere, legislators and others in town for hearings across the street at the Bilandic Building, etc. Not that business travel will necessarily return to the pre-pandemic levels but there will be some need for travel.
Comment by MyTwoCents Wednesday, Dec 15, 21 @ 4:54 pm
If the State is retaining floors 2-7, then the Governor and AG’s office still need to be moved (within the building) and those floors will still be maintained by CMS. Hopefully CMS preserves the original carpeting from the AG’s floors.
Comment by Original Anon Wednesday, Dec 15, 21 @ 4:56 pm
Crain’s reports that Reschke had the highest bid, I assume that includes the projected 30-year savings. That number appears to be around $600 million over 30 years ($20 million per year for 30 years + $70 million - $78 million to ‘purchase’ floors 2-7). Whether this is a good deal is entirely based on the strength of the projected annual savings.
Comment by Original Anon Wednesday, Dec 15, 21 @ 5:01 pm
Kudos to Janel Forde and her team. Folks have been talking for too many years about what to do with the bldg. Forde and CMS listened and got buy in from all the statewide officers, agencies, etc that use the JRTC.
Comment by Scott Cross for President Wednesday, Dec 15, 21 @ 5:03 pm
There is a concept called present value that may be of some relevance here.
Comment by Anonymous Wednesday, Dec 15, 21 @ 9:37 pm
=== Hard to understand how selling an asset then renting it back for 30 years saves you money.===
Not rent, buy. They would need to put those state workers somewhere.
Comment by Da big bad wolf Thursday, Dec 16, 21 @ 7:29 am