DEC 15, 2021
Thompson Center in line for $70M sale to developer who plans ‘total gut renovation’
A rendering of The Prime Group’s $280 million plan to renovate the Thompson Center [JAHN Architecture, Inc.]
State leaders are closing in on a deal to sell the James R. Thompson Center to a private developer who plans to renovate the controversial downtown building while keeping its iconic exterior intact, Gov. JB Pritzker announced Wednesday.
Officials in the state’s Department of Central Management Services picked the Chicago-based Prime Group as the winning bidder to buy the block-sized property at 100 W. Randolph St. Prime Group principal Michael Reschke said he hopes in “the next six months” to seal a $70 million deal to buy the building from the state and get underway on a two-year “total gut renovation” by the end of 2022.
The result will be 425,000-square-feet of renovated office space and a hotel, with the existing light-drenched 17-story atrium mostly intact, Reschke said.
“The only thing we’re saving is the steel structure,” the developer said. “It’ll have all new mechanical systems, a new curtain wall…it’ll be a brand-new, high-tech building with unique massing and a phenomenal location.”
Pritzker praised the new glassy design as “truly stunning,” saying the pending sale “marks the advancement in the fiscal comeback in the state of Illinois.”
“There’s been a lot of talk…for about 20 years from governors about selling the Thompson Center from governors, knowing that operationally it was the right thing to do,” Pritzker said. “It’s a longtime in coming, but well worth it.”
State asset management officials have been working for at least two years on finding a new owner for the 36-year-old Helmut Jahn-designed building, Pritzker said.
His administration released a Request for Proposals to redevelop the property in May with an open-ended call for plans, as long as they kept the busy Clark & Lake CTA station fully intact.
By fall, officials had narrowed their search to two pitches: Prime’s adaptive reuse plan and a competing bid from developer Bob Dunn to “demolish the building and build a high-rise mixed-use development,” according to Ayse Kalaycioglu, COO of the department of central management services.
Saving the Thompson Center has become a cause celebre among Chicago historic preservationists since at least 2019, when the National Trust for Historic Preservation placed the building on its list of the 11 “most endangered historic places” in the country.
But Kalaycioglu said Wednesday that her team was agnostic as to whether the building would be preserved or razed.
“At the end, [Prime Group] was the highest bidder, provided easier [and] lower-risk transactions that were financially and operationally a better option for us,” Kalaycioglu said. Critically, their plan would also allow the state to keep its offices on the site, she added.
“Ultimately, for us, it really was about the numbers,” she said. “How much money do we get, how much money do we spend?”
Pritzker said the deal could ultimately save state taxpayers as much as $800 million during the next 30 years — mostly thanks to the $500 million-plus the state will not have to spend itself on renovation costs, he said. Officials also estimated that the revamped building could reap up to $15 million in additional annual property taxes.
“When it’s completed, we’ll own roughly a third of the renovated building, which more than pays for itself with savings on deferred maintenance,” Pritzker said. “By maintaining hundreds of permanent jobs in the LaSalle Street Corridor, state employees will be there to support the Loop’s continued economic revitalization for years to come.”
The renovation is projected to cost “more or less” $280 million, Reschke said.
“When this opportunity came before us, we were a bit cynical because of the reputation of the building,” Reschke said. “But we took a look at the problems that have plagued this building since 1985, when it opened. And those problems we found were very manageable.”
Reschke added that his firm never considered demolishing the building, which he said would be “an absolute travesty.”
Chicago Ald. Brendan Reilly (42), who represents the area, wrote in a statement Wednesday that he is “pleased” at the state’s efforts to redevelop the property, which “has sat fallow for far too long” and is “costing Illinois taxpayers a lot of money in unnecessary maintenance costs.”
He added that “any future redevelopment proposal for this site will be subject to a robust and transparent community review process prior to consideration by the full City Council” — a subtle reminder that Reilly remains the gatekeeper for any redevelopment plan.
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