State officials expect to be in negotiations with a buyer for the James R. Thompson Center by this time next year and have no preferences whether the new owner preserves or tears down the iconic but controversial Loop office building, officials said Thursday.
As part of a large-scale plan to move state workers out of the 1.2 million-square-foot glass-and-steel structure, the state Department of Central Management Services also is weighing whether to sell other downtown real estate and move some employees out of the Loop.
“We are very open to whatever combination of ideas will lead to the best deal for taxpayers,” CMS Chief Operating Officer Ayse Kalaycioglu said Thursday.
The state is finalizing a three-year, $3.8 million project management contract with Ernst & Young Infrastructure Advisors, which was selected earlier this month to help guide the Thompson Center sale and the relocation of the state’s downtown workforce. The goal is for a request for development proposals to go out sometime this summer and for the state to be under contract with a buyer by the end of 2020.
Former Gov. Bruce Rauner said the Thompson Center could fetch $300 million — and counted on that revenue in his budget proposals — but acting CMS Director Janel Forde said it would be “more than premature” to discuss a possible sale price.
“This is a great piece of land with great opportunities,” Forde said, noting that the Thompson Center site is a square block in the heart of the Loop.
But that prime location comes with some drawbacks and potential obstacles.
The state has estimated the existing building needs $325 million in repairs, and whoever buys the building will have to negotiate with the city and the CTA over maintaining operation of the Clark/Lake station that occupies part of the building. City approval also will be needed for any zoning changes a developer might seek for the site.
There’s also a master lease for the retail space in the building’s glass-enclosed atrium and lower-level food court that doesn’t expire until 2034.
The state is in discussions with the city and the CTA and is evaluating its legal options with regard to the master lease, currently held by Boston’s Winthrop Realty Trust and Chicago’s Marc Realty, the officials said. Some of those issues may be left up to the buyer to resolve.
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Gov. J.B. Pritzker’s administration also is exploring the possibility of the state taking an ownership stake in either the redeveloped Thompson Center site or whatever new office space is secured for state workers.
CMS officials are looking for “interesting, innovative ideas” that could encompass some combination of the property sale, office relocation and ownership stake. They said they will consider the overall value of the proposals rather than deciding based solely on the highest bid to own the Thompson Center.
“Everything will be on the table,” Kalaycioglu said.
The state is evaluating its entire Chicago real estate portfolio, including the state-owned Michael A. Bilandic Building and leases in seven other buildings in the Loop.
While the Pritzker administration is keeping its options open, the state is looking to shrink its office footprint. About a third of the Thompson Center is “literally a void,” Kalaycioglu said, pointing to the Helmut Jahn-designed building’s vast atrium and “very spacious common areas.”
Whatever complaints state workers might have about the building’s poor climate control and other issues, any plan that involves demolition will face pushback from preservationists.
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The National Trust for Historic Preservation in May added the Thompson Center to its list of the nation’s most endangered historic places, calling it “Chicago’s foremost example of grandly scaled postmodernism.” Local preservation groups also want to save the building, which opened in 1985 and was later renamed in honor of former Gov. James R. “Big Jim” Thompson.