The recent splashy opening of the Obama Presidential Center was a welcome reminder that big new things still can happen in Chicago. Eventually.
Barack Obama still was president in late July 2016 when his foundation first announced the selection of Jackson Park for the project. The passage of time is instructive. It takes a long time to make big things happen.
In the intervening years, Chicago has struggled to realize other similarly large-scale plans due to external causes (such as COVID) and plenty of self-inflicted damage. Look no further than Mayor Brandon Johnson’s incessant push for new taxes on businesses, including a mind-boggling effort to tax the largest corporations based on the number of people they employ in the city, over the past three years to get a sense of why it’s so hard to finance major deals in a city even as there’s no shortage of proposals for them.
Thanks in large part to the mayor, Chicago now is viewed as unfriendly to business. Especially among the financiers who, whether progressives like it or not, are indispensable to getting things built.
So count us as pleased that the City Council on Wednesday approved
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$425 million in infrastructure investment to support the privately financed Chicago Fire stadium at the long-fallow 78 site in the South Loop.Some difficult compromises were necessary to win the tax-increment financing approval, particularly “raiding” $287 million from a neighboring TIF district in order to come up with the money. But at the end of the day, the West Loop will be fine and all of Chicago benefits by leaping this crucial hurdle to developing one of the city’s choicest pieces of real estate.
We don’t blame Ald. William Conway, whose 34th Ward makes up most of the Canal/Congress TIF district that supplied the bulk of the cash for the project, for being among the five aldermen to vote no. Conway’s argument that TIF money for road improvements and the like was appropriate, but not for a city-owned underground parking garage, was defensible. A little more than half the subsidy — $216 million — is going just for the garage.
The bottom line for the TIF district supporting the West Loop portion of his ward is that its coffers will be depleted for the next eight or nine years, Conway said.
It is Conway’s job to represent his constituents, and we respect that. But the 62-acre site bordering the Chicago River south of Roosevelt Road — lying between downtown to the North and growing neighborhoods to the South like Chinatown and Bronzeville — is too important not to do what it takes to jump-start development there at long last.
As 3rd Ward Ald. Pat Dowell said during Monday’s hearing before her Finance Committee on the TIF deal, “This project is one for the entire city. Not just for the South Loop, not just for the 3rd Ward. It serves as a connector for the city.”
She also fiercely defended the parking garage, saying that the podium atop the garage bringing the site up to grade level with Roosevelt Road and serving as a base for future development was critical to “unlocking” the site’s potential. The garage, she said, simply was a way to make productive use of the area below the podium.
On the garage and podium, we bought what Dowell was selling up to a point. But the key to justifying this substantial taxpayer expenditure will be out of her hands and instead will rest with developer Related Midwest, which controls most of the site. Major residential, retail and similar development must quickly follow the construction of the soccer stadium or this will have proven to be exorbitant spending.
If Related comes through, that will generate substantial new tax revenues for the city and could make a desirable CTA Red Line station on the tract possible in the future. When Related laid out its initial plans for The 78, approved by the City Council in 2019, a CTA station was part of the mix of what was supposed to be a new mixed-use neighborhood encompassing offices, a research facility and thousands of new housing units. The pandemic killed the need for new office towers on that scale, and financing for Chicago development has become far more difficult to obtain in the years since.
Related is asking for a lot with this $425 million taxpayer subsidy. It should provide a lot in return. It should expect to be held accountable.
Still, at this moment, with a city in urgent need of a shot in the arm, we believe this is a $425 million risk worth taking.
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