May 16,
2012, Mayor Rahm Emanuel announced a tax increment financing grant of $29 million
to Hines Interests Limited Partnership for construction of a 45 story, 850,000
square foot, $300 million office tower to be called River Point, at 444 West
Lake Street. The proposed office building qualifies for TIF financing because
it is a “redevelopment” of blighted riverfront land west of the banks of the
Chicago River where the main branch splits into the South Branch and the North
Branch. The property Hines owns lies east of Canal Street and west of the
Milwaukee Road commuter tracks leading north from Union Station to Elgin and
Big Timber, Antioch, and Fox Lake, directly along the riverbank. Views from the
proposed tower would look west across the cityscape and east at the Apparel
Mart and Merchandise Mart.
Hines
has previously announced construction of a 50 story office tower on this site,
and when two major tenants withdrew from that project, scaled back the concept
to a 40 story building. The current 45 story proposal is designed to have
26,000 square foot floor plates, a 170 car parking garage, white tablecloth
restaurant, fitness center, conference center, and a 3,600 square foot pavilion
on the east side of the Hines property. The TIF money, plus another $30 million
from Hines, will go toward construction of a grassy park to be located on air
rights above the Milwaukee Road commuter tracks.
In
announcing the new concept, Mayor Emanuel touted tax revenues from the to be
developed property, plus creation of 1,000 construction jobs. He says the Hines
determination to proceed with new office construction in the West Loop
neighborhood signals business confidence in the competency of his administration
to meet the city’s financial problems head on. “Of you do the fundamentals
right people will bet on the leadership that a city is showing, not running
away from its future. Denial, as I’ve always said, is not a long term strategy,
but meeting its challenges head on. Confidence is the cheapest stimulus you can
but. It’s free.”
Before
the new mayor gets too big for his britches in the confidence department, he
should look back over the city’s history in redeveloping blighted loop property
and building grassy parks above commuter rail lines. It took decades and a baker’s dozen failed
redevelopment proposals before Block 37, directly across from the Daley Center
in the heart of the loop, could be redeveloped with anything economically
viable, and even now parts of that commercial redevelopment are struggling to
make a profit. And the now complete Millennium Park, which started out as a
grassy field on top of lakefront METRA Electric commuter tracks, could be made
into what it is today, there was an infusion of $250 million donated by then
cash flush Chicago businesses and rich citizens. Even so, Millennium Park went
more than $33 million over budget, even without counting the millions in legal
fees consumed in litigation over design, engineering and fabrication errors on
the project.
Finally,
Mayor Emanuel needs only look eastward down the main branch of the Chicago
River from the proposed development site to see the concrete skeleton of the
incomplete Shangri La Hotel standing 27 stories above the south riverbank where
work stopped altogether three years ago because the project could not be
financed. How many unfinished high rise
towers does Chicago’s skyline need?
