Developers proposed more than $1 billion in renovations to classic downtown buildings along and near La Salle Street in response to an offer of public subsidies, city officials disclosed.
The redevelopment plans involve seven buildings in the central Loop, and most would convert space from office to residential use. The proposals were replies to Mayor Lori Lightfoot’s call last September for ideas that would energize the city’s longtime financial district, with an emphasis on affordable housing.
The document, called “La Salle Street Reimagined,” asked developers to commit to making at least 30% of new housing in the district affordable under terms of a city ordinance. The La Salle corridor has gotten attention because of increased vacancies in older buildings whose floor layouts and lack of natural light don’t appeal to today’s companies.
Developers generally kept to the 30% requirement in their proposals, although not all of the projects can be carried out. Buildings at 208 S. La Salle and 105 W. Adams St. that have gone through foreclosure each got competing proposals from two investment groups.
The most expensive renovation, as outlined in a city summary of responses, would involve a landmark building at 135 S. La Salle, the former home of Bank of America. Owner AmTrust Realty joined with Riverside Investment & Development to propose turning its office floors into 430 residences at a cost of $258 million. Other possibilities there include a grocery store.
Large conversions to housing also were proposed for buildings at 30 N. La Salle and 111 W. Monroe St.
In all, the proposals for the seven sites called for more than 2,000 housing units. One plan for 105 W. Adams contained the biggest commitment to diversity in housing, specifying that 75% of its 247 units would be affordable.
Riverside CEO John O’Donnell said the 135 S. La Salle building is gorgeous, but needing façade work and without features that appeal to today’s tenants. “We offered to put a school inside the building, but the feedback we got from the board of education was that there was no need,” he said.
The city’s guidelines say the Loop’s affordable housing should be limited to those earning up to 60% of the area’s median income. Under current federal housing standards, the income limit for a family of four would be $62,520. Some developers contend a more reasonable limit for the Loop would be 80% of the median income, or $83,350 for the same family.
One proposal took a different tack. The investment firm Urban Resolve and partners want to turn 400 S. La Salle, the former headquarters of the Chicago Board Options Exchange, into an esports venue with 226 beds for student housing, a food court and fitness center.
Developer Michael Reschke, a main proponent of revival in the central Loop, submitted plans for 208 S. La Salle and 111 W. Monroe. While there was a foreclosure suit for 208 S. La Salle, a city landmark, Reschke said he believes he has reached a settlement with the lender.
He said the interest in the city’s plan is strong and shows that the Loop is an attractive real estate market despite higher vacancies in office and retail space.
“The Loop has seen phenomenal residential growth. It doesn’t need a turnaround, but if the city wants to stimulate housing, I think we’re all for it,” he said. Reschke said he expects the city’s program to be “debugged” over the next few months as officials work with developers on requirements for affordable housing.
Reschke is converting the Thompson Center, the former state government center at La Salle and Randolph streets, into a base for Google’s Chicago employees. The project is seen as vital to getting people back to the central Loop. His deal also calls for moving state employees into the old Harris Bank building at 115 S. La Salle.
The city’s main incentive for getting affordable units is to offer tax increment financing subsidies, money that’s diverted from property taxes. The La Salle Central TIF district is among the most cash-rich in the city, with a balance of $197 million reported at the end of 2021.
Samir Mayekar, deputy mayor for economic development, said he’s pleased with the number of responses, especially as inflation and rising interest rates make it harder to finance real estate speculation.
Mayekar said city agencies will “dig into” the proposals to determine their feasibility and how much TIF support might be justified. The first approvals could be announced in a few months, with some construction possible in 2024. The city gave developers a Dec. 23 deadline for their submissions.
Aside from TIF, other possible subsidies include tax credits for affordable housing and for improving historic buildings.
The smallest building to draw a proposal was a four-story property at 170 W. Washington. A partnership wants to turn the offices into four homes in a $2 million renovation.
