MAY 11, 2021
Michael Reese site primed for $97M sale as ‘Bronzeville Lakefront’ edges closer to reality
A rendering of the 48-acre parcel set for sale to a private development team for the $4 billion “Bronzeville Lakefront” project
The $4 billion “Bronzeville Lakefront” megadevelopment is set to clear a critical hurdle on Tuesday as a Chicago commission moves to sell a 48-acre swath of public land to a private development venture for $96.9 million.
The city’s Community Development Commission is set to virtually convene at 1 p.m. Tuesday to consider four sales of city-owned land, including the sale of part of the property on the city’s Near South lakefront that was occupied for decades by Michael Reese Hospital.
The commission is set to ink the sale on the condition that the development team commits to a lengthy list of “public benefits,” including more than 1,300 affordable homes set for construction during the project’s multi-decade timeline. The sale must also be approved by the City Council.
City planning officials are separately negotiating a redevelopment agreement with the developers that could convey tens of millions of dollars in public funding for infrastructure in and around the project, Crain’s reported on Friday.
The sale is a major step in the marathon redevelopment effort that began in 2017, when Mayor Rahm Emanuel’s administration selected GRIT, LLC — a development team led by Chicago-based Farpoint Development — to repurpose the site. Chicago has owned the vacant former hospital site since 2009, when then-Mayor Richard M. Daley envisioned it as a home for the 2016 Olympic Games.
GRIT submitted its planned development application (O2020-3001) for the project last June. The master plan took a leap forward in February, when it cleared the Chicago Plan Commission on a unanimous vote.
When completed, the Bronzeville Lakefront campus is planned to include nearly 7,000 units of new homes among 8 million square feet of “mixed-use space” including office, retail and research facilities. Most of it will materialize in a still-murky second phase of the project, which won’t get underway for at least another two years, according to representatives of the development team.
Before that, the firms plan to build a “Bronzeville Welcoming Center,” a medical research facility known as the ARC Innovation Center, an approximately 300-unit senior housing complex and a redevelopment of the existing Singer Pavilion.
The developers have also signaled an intention to someday buy and redevelop the McCormick Place “marshalling yards” east of the Metra Electric tracks, but they so far have not submitted plans to do so.
Terms of public sale
The city paid $91 million to buy the Michael Reese property in 2009 so it could be used as a base for the 2016 Olympic Games, and taxpayers have since paid about $13 million each year to pay down the city’s debt on the site.
The development team has predicted the project will reap $2 billion in property taxes for the city during the next 20 years.
The development group will “make an initial payment of $20,000,000, which will serve as an option for the purchase of the Reese Property over 14 years,” according to a planning department document shared with The Daily Line.
GRIT wrote in its 2016 Request for Proposals application that it plans to tap a range of federal and local tax benefits, including tax-increment financing and New Market Tax Credits. The developers also plan to take advantage of the federal Opportunity Zone program after state leaders selected the Reese site in 2018 to receive the federal tax benefits.
The site is located inside the Bronzeville tax-increment financing district, which has generated about $5 million in annual revenue but is scheduled to expire next year, according to the database maintained by Cook County Clerk Karen Yarbrough.
But the “city’s infrastructure and/or federal funds will be used to fund public infrastructure costs only and will not be used for any component of the private or vertical construction,” according to the planning department document.
Because the project is planned on city-owned land, it must charge reduced rents on at least 20 percent of housing units built, per the city’s Affordable Requirements Ordinance. That will translate to 1,357 affordable units built on the site during the course of the project timeline, according to the developers.
The city plans to build new public streets to crisscross the site, including by extending Vernon Avenue to 31st Street and widening Cottage Grove Avenue. The “existing, underutilized METRA station at 27th Street may be relocated and gain accessible entrances,” according to the planning department document.
GRIT leaders have also said they plan to charge reduced rents on 10 percent of retail space built on the site.
“We are very committed to making sure that the folks in the immediate area can live here, as well as be a part of the site, as well as work on the site, and have their businesses located at the site,” Farpoint director of development Morgan Malone told the commission earlier this year.
The planned development application approved in February is awaiting consideration by the City Council Committee on Zoning, Landmarks and Building Standards.
Separately on Tuesday, the Community Development Commission is scheduled to consider the following items:
- An agreement to sell 10 city-owned parcels near the intersection of Troy Street and Roosevelt Road in the 24th Ward to GMP Labs through the City Lots for Working Families program.
- An agreement to sell nine city-owned parcels near the intersection of Ohio Street and Central Park Avenue in the 27th and 28th Wards to Pashupati Nath and Neelam Dwivedi of Nath Construction LLC through the City Lots for Working Families program.
- • Sale of a city-owned property at the intersection of 61st Street and Halsted Street in the 16th Ward to Keith B. Key of Keith B. Key Enterprises LLC.
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