Chicago Moves Forward with $98M TIF Plan to Transform 135 S. LaSalle into Mixed-Use Hub

Chicago. Photo by Fineas Anton on Unsplash

18 November 2024 | Chicago, United States

Chicago is advancing a plan to provide $98 million USD in tax-increment financing (TIF) to transform the landmark 135 S. LaSalle St. building into a mixed-use development with 386 apartments, a grocer, and a parking garage. The $241 million USD project, led by Riverside Investment & Development, DL3 Realty, and AmTrust RE, is the largest initiative under the LaSalle Street Reimagined program, which aims to repurpose vacant office buildings.

The redevelopment would convert 624,000 square feet (57,971 square meters) of the 45-story art deco tower, built in 1934, into residential and commercial space. Of the planned apartments, 116 units would be affordable, meeting city requirements for public subsidies. Proposed market-rate rents range from $3.25 to $3.73 USD per square foot, (approximately $35 to $40 USD per square meter) while affordable units range from $0.83 to $2.59 USD per square foot (approximately $8.93 to $27.88 USD per square meter).

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City officials are optimistic the project will revitalize LaSalle Street by attracting foot traffic with amenities like a small-format grocer, health club, and medical offices. The redevelopment also includes a 177-space parking garage, partially reserved for residents, and shared indoor and outdoor amenities on multiple floors.

The TIF grant would cover 40% of the project’s costs, with the remaining funding sourced from loans, equity, and historic tax credits. Construction is slated to begin in July 2025, pending final approvals, with completion expected by April 2027.

This initiative is part of broader efforts to address the Loop’s post-pandemic challenges by repurposing underutilized office spaces. Alongside four other TIF-supported projects, the redevelopment aims to add over 1,400 apartments and repurpose 1.6 million square feet (148,644 square meters) of office space, potentially generating $5.8 million USD annually in property tax revenue, a 49% increase.

Once home to Bank of America’s Chicago offices, 135 S. LaSalle has faced over 80% vacancy since the bank's 2021 departure. The building, appraised at $330 million USD in 2015, is now valued at just $68 million USD, highlighting the economic pressures driving these redevelopment efforts.

Learn more about this story at Crain's Chicago Business.