Tall & Urban News

The developers planning to turn the former Michael Reese Hospital site in Bronzeville into a 49-acre (19.8-hectare) mixed-use campus over the next two decades took a key step toward winning city approval for the project. But it remains unclear how and how much taxpayers will chip in to help turn the ambitious vision into reality.

The Chicago Plan Commission today approved the redevelopment plan for the sprawling city-owned property just south of McCormick Place, including an initial phase that could begin later this year featuring 1.1 million square feet (92,903 square meters) of new and renovated buildings.

The US$3.8 billion proposal from the group led by Chicago-based Farpoint Development now heads to the City Council's zoning committee for consideration and will require approval from the full City Council, which could come as soon as next week.

Those signoffs would help clear the way for a project that could eventually redraw a high-profile swath of the Near South Side lakefront with nearly 8 million square feet (743,224 square meters) of new development.

The developers aim "to make sure that this long-vacant site really becomes an ecosystem for growth and something (that) attracts investment in what has been a highly underinvested area for so long," Farpoint CEO Scott Goodman said of the plan during the virtual Plan Commission meeting. Farpoint leads a coalition of city-selected developers collectively dubbed GRIT.

Another hurdle to clear before the megaproject can kick off is the city's Community Development Commission, which oversees the sale of city-owned land being redeveloped. The city, which bought the land in 2009 as a potential future Olympic Village had Chicago won the 2016 Summer Games, has yet to announce how it will help pay for new and refurbished roads running through the property.

GRIT said last year it expected such infrastructure improvements to be funded with money from a tax-increment financing district that encompasses the site, but the developers now say that TIF is no longer being discussed for that purpose. Department of Planning & Development Assistant Commissioner Cindy Chan Roubik said the city and the developers are negotiating a redevelopment agreement to address public financial aspects of the project "in the coming months."

The use of TIF to fund infrastructure improvements was a crucial but controversial aspect of two other planned megaprojects outside of the central business district: developer Sterling Bay's Lincoln Yards campus on the North Side and Related Midwest's plan for the 78 in the South Loop. But unlike those privately owned properties, the Michael Reese site is owned by the city, which is motivated to get it off its books. The city pays about $13 million a year to cover its debt on the property, according to the planning department.

Among other projects that would improve access to the site and revive its street grid, the developers plan to extend Cottage Grove Avenue as a main thoroughfare running through the project, extend Lake Park and Vernon avenues and add new streets running east-west across the property. It's unclear how much those initial infrastructure projects would cost.

A land remediation project is already underway along the north end of the Michael Reese site using US$31 million in TIF money from two TIF districts.

The first phase of the redevelopment would cost an estimated US$600 million and cover about 16 acres (6.5 hectares) along 31st Street between Metra Electric tracks and Vernon Avenue. The centerpiece would be a 500,000-square-foot (46,451-square-meter) building at 31st and Cottage Grove Avenue anchored by the ARC Innovation Center, a medical research facility affiliated with the Sheba Medical Center, Israel's largest hospital.

That building would include retail space and a Bronzeville community center, while other projects in the initial phase would include a mixed-income senior housing project with about 300 units, a new park and renovation of the Singer Pavilion, the only remaining building from the original Michael Reese complex.

GRIT envisions completing all of those projects by 2026. The US$3 billion second phase is projected to occur over the next 20 years on the central and northern portions of the property. Projects would include a data center, a range of housing types as well as offices catering to the life sciences sector, a move to help cultivate the deep pool of biotechnology and medical startups that are hatched at local universities but often grown in more mature life sciences markets.

The project would allow up to 6,786 residential units, with 20 percent of them offered at affordable rates in accordance with the city's affordable-housing requirement.

Not included in the proposal the Plan Commission approved today is a separate GRIT plan for a development site east of the Metra tracks on truck marshalling yards used by McCormick Place. The developers said last year that project could include 5.5 million square feet (510,966 square meters) of buildings, including apartment towers rising as high as 800 feet (243 meters). That project wouldn't begin until 2028, but would bring the combined estimated cost of the total redevelopment to around US$6 billion and 15 million square feet (1,393,545 square meters).

The developers cited an economic impact analysis done last year estimating that the two-phase project over 20 years would create more than 17,000 direct construction jobs and more than 30,000 full-time jobs.

The development group behind GRIT, which stands for Global Research Innovation & Tourism district, includes Chicago-based Draper & Kramer and McLaurin Development Partners, Chicago investment firm Loop Capital and two nonprofits: Chicago Neighborhood Initiatives and the Bronzeville Community Development Partnership.

For more on this story, go to Crain's.