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Chicago Mayor Brandon Johnson is proceeding with a revamp of empty downtown buildings initially estimated at $1 billion in an effort to counter a commercial real estate crisis that\u2019s cut sale prices by more than 50%.\u00a0<\/p>\n
The city, run by a progressive Democrat who\u2019s been in power for less than a year, has been working with developers to refine plans to repurpose buildings along and near LaSalle Street, once known as the Wall Street of Chicago, according to the city\u2019s Chief Financial Officer Jill Jaworski. An announcement is expected by the summer after high interest rates delayed the project, she said.<\/p>\n
Chicago, like many other cities in the US, has been struggling to fill empty offices after the pandemic hollowed out downtowns. Johnson\u2019s move to keep an initiative kick-started by his predecessor Lori Lightfoot will help combat vacancy rates in the city\u2019s central business district, which climbed to a record in the fourth quarter, according to real estate brokerage Jones Lang LaSalle<\/a>.<\/p>\n \u201cIt\u2019s taken a little bit longer to get things going but we are working closely with those projects and doing what we can to move them forward,\u201d Jaworski said in an interview on Friday. \u201cWe expect that we will see projects get announced and get off the ground in the near future.\u201d<\/p>\n Lightfoot, the first Chicago mayor to lose a reelection bid since 1983, first announced plans to repurpose almost 2.3 million square feet of vacant space\u2014the equivalent of almost 40 football fields\u2014in September 2022. The future of the so-called LaSalle Street Reimagined initiative had been in question since Johnson took over in May.\u00a0<\/p>\n The mayor has been trying to appease the business community after a rocky start fueled by a series of plans to tax the rich. Just last week he announced plans to boost the Loop, as Chicago\u2019s central business district is known, that include a Chicago Board of Trade museum. He also gave more than $1 million in grants to six downtown restaurants including the storied Ceres Cafe, where dealers used to flock in the heydays of the city\u2019s trading floors.<\/p>\n \u201cThe mayor is committed to rejuvenating and encouraging the development of housing in the LaSalle Street corridor,\u201d Quintin Primo III, founder of Capri Investment Group, said in an interview last month. His company proposed to redevelop 111 West Monroe Street with housing and a hotel as part of the initiative.\u00a0<\/p>\n Before Lightfoot left office, the city had picked proposals from a group of developers to convert five buildings along LaSalle, Adams and Monroe streets. Jaworski declined to comment on whether all five projects will move forward.\u00a0<\/p>\n High interest rates have hurt the property market across the country. In Chicago, fewer than five large office buildings sold last year, with deals struck at losses ranging from 50% to 90%, according to the Building Owners and Managers Association of Chicago. LaSalle Street Reimagined projects weren\u2019t immune.\u00a0<\/p>\n \u201cThe borrowing environment has changed a lot since they made those proposals and it\u2019s a challenge right now for all real estate developers,\u201d Jaworski said.\u00a0<\/p>\n It\u2019s not all bad news for Chicago. Distressed buildings have finally started to change hands and the transformation of the iconic Thompson Center \u2014 which takes up a whole city block \u2014 into Google\u2019s new office is set to start soon.<\/p>\n Scott Henry, chief executive officer of Celadon Partners, a Chicago-based affordable housing developer selected to renovate 105 West Adams Street, said he has been advised to \u201ckeep pressing forward\u201d and \u201cbe ready to go.\u201d The LaSalle Street Reimagined project initially included more than 600 affordable homes.\u00a0<\/p>\n Prime Group, which had proposed renovations of two buildings, is advancing its projects, said founder Michael Reschke. Final drawings for permits are about to start and the firm has \u201cadjusted capital requirements to provide for slightly higher construction costs and higher interest rates,\u201d he said.<\/p>\n Jaworski said plans to revitalize downtown can\u2019t solely rest on traditional office space even if companies are amping up pressure for workers to return. Chicago also wants to draw people to its Loop theaters, restaurants and other amenities, she said.\u00a0<\/p>\n \u201cWe are very supportive of plans to transition some office buildings into residential to provide affordable housing,\u201d Jaworski said. \u201cWe obviously want the downtown of Chicago to continue to be a vibrant place.\u201d<\/p>\n<\/div>\nDowntown revamp<\/h2>\n
Vibrant place<\/h2>\n
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