City launches plan to revive LaSalle Street corridor by developing 1,000 new apartments, including affordable units

Mayor Lori Lightfoot unveiled a plan Monday to revive the LaSalle Street corridor, a key downtown office district that has suffered the double whammy of COVID-19 and the loss of several large businesses due to new towers rising higher. west along Wacker Drive and at Fulton Market.

The mayor said it’s time to take advantage of the Loop’s apartment boom and fill the corridor’s empty offices with new tenants, including hundreds of low- and moderate-income workers who are typically excluded from downtown life.

“We must restore this area to its full potential,” the mayor said. “But do it with an eye to fairness.”

The street’s road to recovery could be a long one. This year’s loss of major LaSalle Street office tenants, such as BMO Harris and the law firm Chapman & Cutler, to the new West Loop BMO Tower, was just the latest of many departures, and the mayor estimated during an afternoon news conference that about 5 million square feet of retail space in the surrounding blocks is empty.

But city officials expect developers to use a variety of government financing tools to create about 1,000 new apartments over five years on several blocks of LaSalle Street between Washington Street and the Chicago Board of Trade building, as well as in the nearby streets. They also plan to fill the many empty storefronts by bolstering local restaurateurs and retailers, who started drowned in red ink when the pandemic came and the clients disappeared.

The center’s prospects improved when Google agreed this summer to buy the James R. Thompson Center for $105 million and announced plans to use the entire 17-story structure as office space. The company helped fuel the transformation of Fulton Market, a former industrial neighborhood, into a gleaming office center and upscale residential neighborhood when it established its Midwest headquarters there in 2015.

But as Lightfoot gears up for next year’s re-election campaign, he wants to avoid any criticism that he places too much emphasis on downtown development, a charge often leveled at predecessors such as former Mayor Rahm Emanuel.

During the press conference, he discussed the administration’s Invest South/West program, which provides financial incentives to developers who launch projects in underutilized commercial corridors on the South and West Sides, and the 2021 reform of the Affordability Requirements Ordinance. of the city, which increased the number of affordable housing units required for many new residential projects.

The center’s new initiative will follow that path, he added. Thirty percent of the 1,000 units created will be set aside for affordable housing, currently a rare commodity in the central business district.

“Today, there are only two full ARO units in the central business district and none on LaSalle Street,” he said.

That part of the initiative should find favor with the thousands of janitors and service workers who clean and maintain downtown office buildings, according to Genie Kastrup, president of Service Employees International Union Local 1, which represents about 50,000 workers.

“This will be the first time our Local 1 members will be able to reside where they clean buildings,” he said.

The Loop’s population stood at more than 42,000 in 2020, up 44% from 10 years earlier, the fastest growth rate for any Chicago neighborhood, according to the Chicago Loop Alliance, an advocacy group.

Many historic buildings along LaSalle Street could also be converted into attractive apartment buildings, said Department of Planning and Development Commissioner Maurice Cox. But city officials frequently sat down with LaSalle Street owners during a two-year planning effort and heard a clear message: The cost of transforming old office buildings on LaSalle Street into residences makes it difficult to include affordable units. .

The market has shown that the only things that are financially viable are luxury units, Cox said.

Cox said officials can make affordable units on LaSalle Street viable with a variety of financial incentives available to developers who hit the 30% benchmark mark. Incentives include tax credits for the rehabilitation of historic buildings, new property tax relief measures for homeowners who create affordable housing, tax credits for low-income housing, and financing from the LaSalle Central tax increment financial district, created in 2006 but archived by then Mayor Emanuel in 2015.

The planning department will accept proposals through Dec. 23 to convert the historic LaSalle Street buildings into affordable, market-rate residences and revive their storefronts, Cox added, and in January will shortlist the best proposals. All the conversations between developers and property owners make him confident that they will be getting a lot of pitches soon.

“They told us that if the city can put together enough incentives, they would be ready,” he said.

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