A wave of mega-developments represent billions of dollars of new investment in Chicago, but how much say does the public really have in these plans?
The year: 2019. The city: Chicago.
A former industrial giant overshadowed by its coastal peers and emerging metropolises abroad. Mega-developers step up to the plate to clear entire swaths of the city and populate vast corridors with anonymous glass skyscrapers and attractions that symbolize Chicago’s metamorphosis from a waning post-industrial might to an idyllic 21st-century mega-metropolis.
Massive sections of the city are divvied, planned, developed, and owned outright by a handful of powerful interests. And by the vote of a 50-seat city council, decisions that will forever reshape Chicago’s neighborhoods are swiftly made. A sweeping zoning change or vote on a new tax increment financing district can mean hundreds of millions — if not billions—in value for developers.
Meanwhile, public outcry turns into outrage, leading to a deepening distrust in the democratic process and the entities—from developers, to elected leaders, to the Department of Planning and Development—that plan and approve these massively transformative and massively expensive projects.
Sound like some sort of ’80s sci-fi blockbuster? There are at least a few that should immediately come to mind. Postmodern stories of greed, corruption, displacement, clout and unbridled capitalism in the 21st century. A tale of two cities stuck between two centuries. And in many ways, the truth is stranger than fiction.
Sterling Bay’s Lincoln Yards always reminded me so much of the Delta City proposal in Robocop where “old Detroit” was to be demolished and rebuilt. Also, the fact that Rahm Emanuel vaguely looks like Bob Morton (Miguel Ferrer’s character). pic.twitter.com/1odFKniBuR
— AJ LaTrace (@ajlatrace) March 13, 2019
We’re told by the mayor’s office and some editorial boards that slowing things down or forcing these sprawling parcels to be developed organically—allowing these areas to be built-up piecemeal—puts the city’s economic health and ability to compete in a globalizing world at risk, despite numerous economic indicators that would suggest otherwise.
Tourism is thriving, Chicago continues to lead the country in attracting new corporate expansions and headquarters, a downtown construction boom has seen numerous new hotels, apartment, and office towers fill the skyline, and a major expansion at O’Hare will ensure Chicago’s historic role as a transportation hub will continue for decades to come.
But does slowing these mega-developments down really pose more risk to the public than giving developers consolidated control over such large spans of valuable riverfront land? And how do we guarantee equity to a public that is on the hook for billions in reimbursements via TIF districts?
There are many more questions that need honest, fleshed-out answers.
Who are these developments for? Do these developments look like Chicago communities? What happens in the case of another economic downturn that halts the construction of these massive undertakings? What does it mean to be a global city in 2019? What should a 21st century Chicago look like?
Chicago’s next mayor—Lori Lightfoot, who won in a landslide on April 2—will have to answer these questions, and many more, to help repair the relationship with a fatigued and deeply mistrusting public. Chicago’s new mayor and city council will have to decide how to lead on these plans, start a new conversation on TIF reform, and help create a roadmap for investment beyond the city’s already thriving downtown and North Side.
Making a mega-development
One only need to review the final series of votes on Sterling Bay’s Lincoln Yards to get a sense of the unnerving atmosphere surrounding Chicago’s corrupt political culture and the recent passage of the major proposal.
The plan, which is anticipated to cost somewhere in the neighborhood of $6 billion, will reshape more than 50-acres of prime riverfront property in the heart of the North Side.
The main underpinnings for the Lincoln Yards plan were acquiring the numerous properties (Gutmann Leather and Lakin General in 2015, Finkl steel in 2016, and city’s Fleet and Facilities Management site in 2017) and easing the constraints of the North Branch Planned Manufacturing District, a zoning relic of the Harold Washington administration that sought to protect industrial businesses and the stable jobs they provided.
The March votes to approve of the proposal happened in the wake of major scandals affecting the Chicago City Council, most relevant, the FBI probe that took down 25th Ward Alderman and former chair of the city council’s zoning committee, Danny Solis (who hasn’t been seen since).
14th Ward Alderman Ed Burke, who was met with an extortion charge and subsequent office raid by the FBI, shocked the city by winning the reelection of his seat a month ago. Coincidentally, Burke acted as Sterling Bay’s property tax attorney up until the indictment.
A summary of the March 7 City Council Zoning Committee vote by Fran Spielman of the Chicago Sun-Times illustrates the dysfunction at City Hall and the precariousness of the plan, which had seen numerous changes in the lead up to the March votes.
Fighting for survival in the April 2 runoff, Cappleman opened the meeting by moving to defer consideration of the $6 billion project.
“A lot of new information has come in recently. And there’s still so much to digest — especially for a project that is this broad,” Cappleman said, his voice almost trembling.
“And so, as acting chair, I will defer these two items.”
At that point, the stunned crowd of protesters gathered in the City Council chambers burst into applause.
Ald. Walter Burnett (27th), one of Mayor Rahm Emanuel’s staunchest City Council supporters, pounced on Cappleman, the Zoning Committee vice-chair occupying the chairman’s hot seat only because disgraced Ald. Danny Solis (25th) was forced to relinquish it.
“They put you here to run the meetings, but you’re not the chairman. … This is not your ward,” Burnett said.
“I move that we vote on this item.”
When Cappleman disagreed, a city attorney argued otherwise. That forced a “vote to vote.” It was was 9-to-4 to go ahead.
Burnett, who is not only an important ally of Rahm’s but also a recipient of campaign funds from the mayor, is also the alderman of the 27th Ward, Sterling Bay’s home turf and focus of many projects from the developer in recent years. At the vote, Burnett’s role seemed to be that of an enforcer, seeing that the mayor’s agenda would be realized before the end of his term.
But the pushback on the vote at City Hall was unprecedented. It’s almost as if the glue that was the mayor’s unchecked power over City Council was finally peeling away. It’s almost as if Chicago’s well-documented culture of corruption and graft and its effects on the flawed democratic process was playing out like a bizarre dystopian film.
Roll now being taken on a "vote to vote" on Lincoln Yards. The vote is 9 to 4 to go ahead. So Cappleman gets political cover and Emanuel gets his way anyway. What a charade.
— Fran Spielman (@fspielman) March 7, 2019
But there’s more. Enter the speakers who stood before the city council in favor of the plan. It turns out that some of these attendees were provided with paid parking, breakfast at the Hotel Allegro, and talking points. Later on, in an ironic self-own, 2nd Ward Alderman Brian Hopkins gloated on Twitter about the number of speakers who turned out in support for the plan.
It was déjà vu — in January, another group of “volunteers” were passing out t-shirts that read “This taxpayer supports Lincoln Yards.”
And this isn’t the first time this sort of thing has happened. During the Plan Commission vote on the controversial proposal to privatize and redevelop the Lathrop Homes—a former public housing complex along the river’s North Branch—some attendees were seen wearing shirts that showed support for the plan, along with the logos of developers Bickerdike Redevelopment Corporation and Related Midwest.
They also got breakfast & parking courtesy of SB! pic.twitter.com/61UnaOZ74I
— Amy Abramson (@AbramsonAmy) March 8, 2019
The drama continued during the March 13 vote by the full city council. The Daily Line’s Heather Cherone and A.D. Quig offered a sobering account of the situation:
Ald. Harry Osterman (48th) mocked the project’s 600-foot tall towers and suburban-style shopping centers as “Schaumburg Yards.”
“This is the rich getting richer,” Osterman said. “The North Side getting north-er.”
Osterman said the next time someone asks him why the North Side is so much more affluent than the South Side, he will point to this vote as the driving force behind the disparity.
“It happens on days like today, with votes like this,” Osterman said. “This is the tale of two cities.”
And here’s how the vote finally played out:
In addition to Osterman, the development’s neighboring aldermen — Michele Smith (43rd) and Scott Waguespack (32nd) voted no, as did Ald. Sophia King (4th); Ald. Leslie Hairston (5th); Ald. Susan Sadlowski-Garza (10th), Ald. Roberto Maldonado (26th), Ald. Ariel Reboyras (30th); Ald. Milly Santiago (31st); Ald. Deb Mell (33rd); Ald. Carlos Ramirez-Rosa (35th); Ald. John Arena (45th); Ald. James Cappleman (46th) and Ald. Ameya Pawar (47th).
Ald. Ed Burke (14) — who represented Sterling Bay as a private property tax attorney until being charged with attempted extortion — abstained.
Even though Ald. Tom Tunney (44th), Ald. Proco Joe Moreno (1st) and Ald. George Cardenas (12th) told The Daily Line before the Feb. 26 election they would vote no on the project, all voted yes.
Additionally, the final vote on a controversial $95 million plan to construct a new police and firefighter training complex on the the West Side took place on the same day. Despite a mobilized effort and campaign by activists to stop the proposal, it sailed through the city council.
The passage of other proposed mega-developments hasn’t been as dramatic nor mired in political upheaval as the Lincoln Yards vote, but the events surrounding the lead-up, and the political maneuvering during the days of these votes, was uniquely Chicago.
Had a reader send me this over the weekend.
?@sterlingbay spotted in Sanibel, Flordia, in a Rolls Royce Phantom from Perillo motors in Chicago.
— Jonathan Ballew (@JCB_Journo) March 18, 2019
[Does this new Rolls Royce belong to a Sterling Bay boss? Does the custom license plate suggest a connection to the developer or is it a mere coincidence?]
A tale of too many cities
The reality is that Chicago is moving into a direction where major real estate players are not only getting bigger, but these developers and their architects seem to have more influence than ever on the city’s built environment. And it’s not just Lincoln Yards. There’s at least a handful of these multi-billion dollar proposals that will not just transform adjacent neighborhoods, but will also occupy and reshape long stretches of riverfront.
Chicago allows developers to act as planners, with the power to redesign communities and establish the value of the existing built environment. The problem is at every scale, from Sterling Bay to Related Midwest to the smaller developer who “will put this neighborhood on the map”
— Elizabeth Blasius (@blaservations) March 27, 2019
For example, just Lincoln Yards and Related Midwest’s 78 represent $13 billion in investment—with $2 billion in TIF subsidies for the plans (this blog post by Daniel Kay Hertz and Amanda Kass is a good explainer on TIF in Chicago). And at nearly 115 acres combined, these two developments have the potential to completely transform numerous communities along the north and south branches of the Chicago River. Both plans also share the same architect in SOM.
There are also a number of other major skyscraper plans that in their own right constitute mega-development status. For instance, the One Chicago Square project in River North, a full-block two-tower behemoth that will deliver nearly 800 apartments, is anticipated to cost $850 million. A redevelopment of the Tribune Tower with a soaring supertall addition will easily cost $1 billion, as will Related Midwest’s plan to deliver a two-tower development at 400 N. Lake Shore Drive, the site the failed Chicago Spire tower.
Here’s a rundown of the biggest mega-development plans currently in the pipeline, including the developers, architects, total land area, and estimated costs (as well as TIF districts, if relevant):
Lincoln Yards: Sterling’s Bay plan to transform 50 acres of former industrial land along the North Branch is estimated to cost $6 billion and will deliver 15 million square feet of mixed-use space, including 6,000 residences. One of the more controversial aspects of the proposal is the passage of a new TIF district which could reimburse Sterling Bay well over $1 billion for infrastructure improvements. There’s also been scrutiny towards the transit plan for the development. Global architecture firm SOM is spearheading the master plan.
The 78: The name 78 is a nod to Chicago’s neighborhoods, of which there are 77 designated community areas recognized by city planners and census takers. Developer Related Midwest is pitching the proposal as the city’s 78th community, or “Chicago’s next great neighborhood,” according to marketing materials. SOM is also the master planner for this 62-acre project, which is estimated to cost $7 billion. The new Roosevelt/Clark TIF district earmarks $550 million for reimbursements.
The River District: Currently the site of the Chicago Tribune’s printing operations (aka the Freedom Center), this 37-acre riverfront stretch (30 acres at 777 W. Chicago Avenue and seven acres at 700 W. Chicago) is being developed in a partnership between Tribune Media and Riverside Investment & Development. Chicago’s Solomon Cordwell Buenz (SCB) is leading design and master planning duties. Nearly 6,000 new residences and hundreds of thousands of square feet of office space will fill out a series of new towers. The cost estimate is unknown, though it’s almost certain to be in the billions.
Riverline: What started out as a 14-acre, 2,700-unit, $2 billion venture between Chicago’s CMK Companies and the Australia-based Lendlease ultimately turned into two separate developments last April: Riverline and Southbank. The eight-acre Riverline project, which fits in a parcel between Polk Street and Roosevelt Road, is planned by Perkins + Will and is estimated to cost somewhere in the neighborhood of $800 million to complete. Both Riverline and Southbank developments fall into the recently approved Roosevelt/Clark TIF district.
Southbank: Riverline’s sibling development, Southbank will see the delivery of a handful of new high-rises on a seven-acre stretch north of Bertrand Goldberg’s River City along the South Branch. The first tower at the $1.2 billion mega-development, the 452-unit Cooper at Southbank, has already been delivered. A total of 2,000 new residences are planned for the site.
One Central: The latest entry in Chicago’s new wave of mega-developments, the One Central plan from Landmark Development has the benefit of watching and waiting to see how other major proposals have unfolded and the public’s reaction to them. Master planned by Perkins + Will, the proposed 34-acre development will be built on top of what is currently open air rail tracks between Soldier Field and McCormick Place. The total cost and unit count has not been made public, though such a plan would easily cross into the multi-billion threshold. The developer says that it does not plan to pursue TIF dollars.
Obama Presidential Center: Estimated to cost roughly half a billion dollars to fully construct, the Obama Presidential Center (OPC) seems to pale in comparison when considering the other mega-developments in the pipeline. However, the proposal has a major symbolic weight as the future home base of the Obama Foundation and repository of relics from the Obama presidency.
And similar to other proposed mega-developments, the OPC plan has not been free from controversy. The plan to use 20 acres of publicly-owned park space in Jackson Park has been viewed as a massive taking, especially when considering the Obama Foundation has not been receptive to the idea of a community benefits agreement, something which activists have long fought for.
A “new” new urbanism
Beyond the polished renderings, what will these new mega-developments ultimately look like? Will they feel like Chicago neighborhoods or become closed-off communities gated by glass curtain walls? Will they represent a new era of urban renewal or a real estate rush where developers divide and conquer? Maybe some combination or all of the above?
We have a couple of examples here in Chicago to look to for reference: Lakeshore East and Wolf Point. Similar to the new wave of mega-developments, both of these downtown developments represent billions in investment through the form of tall, glassy skyscrapers. And also similar to the mega-developments that will come well after, both Lakeshore East and Wolf Point were built in phases and stages.
But Lincoln Yards, the 78, the River District, and One Central are really on another level in terms of size and scale.
Maybe we should look east to the Hudson Yards mega-development in New York, a $20 billion collection of skyscrapers built over a large rail yard, for some context. Opinions are out on the recently completed first phase at Hudson Yards—it’s been called “an ultra capitalist forbidden city,” a “billionaire fantasy city,” a “vast neoliberal Zion,” and a “gated community.”
Then there’s a review by McMansion Hell author Kate Wagner that’s simply titled “Fuck the Vessel,” which skewers the ominous-looking interactive sculpture attraction at Hudson Yards through a cynical lens of architecture and design in the age of Instagram.
Perhaps the most inviting place to sit in Hudson Yards, on the stone banks right under the Shawarma, is being patrolled by a guy who tells you it’s “not a rest area.” pic.twitter.com/hQCVaUqxAr
— Henry Grabar (@henrygrabar) March 30, 2019
The takes touch on architectural merits and demerits of the Hudson Yards towers, the shopping mall component, and of course, the Vessel. Are these just superficial critiques from overzealous writers seeking to one-up each other while failing to take into context Hudson Yards’ place in the already incredible densely built-up Manhattan?
It’s a mega-development for a mega-city, right?
The architecture critics are trying to outdo each other with these overwrought Hudson Yards takes. It's a bunch of office towers and apartment buildings next to Midtown Manhattan, get a grip https://t.co/qEayTK1nE2 pic.twitter.com/zliFnFG7JW
— Market Urbanism (@MarketUrbanism) March 14, 2019
Maybe it’s no coincidence that the conversation surrounding Hudson Yards and the mega-projects in Chicago has moved towards the language of detailing a present-day dystopia. It seems to have become a common trope that the inhabitants of major cities have picked up on simultaneously, though totally independently of one another. And it’s not just about aesthetics either.
Last year, Chicago Tribune architecture critic Blair Kamin looked back to Cityfront Center as a cautionary tale for a bad trade between developer and city. Kamin also highlighted the flaws in the Lincoln Yards plan, including building heights, the public park programming, and the development’s place in an existing community, and asked his influential city leader readers to slow the plan down in order to address these changes.
In Chicago, these proposals, and specifically the votes on TIF districts, conjure up not-so-distant memories of previous fiascos like the disastrous parking meter deal, the failed 2016 Olympics bid, and other top-down plans which were pushed through the city council benefiting a select few while leaving the public on the hook.
In Chicago, it’s about how the public’s voice is continually overlooked in favor of the rushed approach to planning and approving major proposals. It’s the kind of planning that is saturated in the jaded irony that not only results in an an increasingly skeptical public, but a public that has become so disillusioned in the process that it almost always assumes that the fix is in.
In Chicago, it’s the same false dichotomy that we have to take it as-is or leave it—with the “leave it” option translating to deliberately choosing to fail.
… We've gone from Kraft getting a $6 million TIF payout, to Sterling Bay shaking down the city for over $1 billion dollars in TIF money for Lincoln Yards, as Sterling Bay's business has become turning historic neighborhoods into canyons of skyscrapers. pic.twitter.com/I9HSEBwchV
— Lynn Becker (@LynnBecker) March 14, 2019
Perhaps it’s the vast transformations underway in both the West Loop and on Goose Island that might be a better comparison of what a 21st century mega-development looks like in Chicago. There’s a big parallel between these areas and at least a couple of the currently proposed mega-developments, and that is the theme of developing longstanding industrial sites for post-industrial use.
The West Loop has taken on a mega-development quality on its own with dozens of new office, retail, and residential projects having been delivered in the neighborhood since the post-recession boom really took off around five years ago. Except, a big difference is that in the West Loop, a litany of developers are both competing with one another and reinforcing new investment by their presence.
Meanwhile, on Goose Island, aging warehouses are being repositioned as tech-friendly offices. Developer R2 Companies staked out the man-made island several years ago, quickly acquiring numerous sites, including the Goose Island boat yard. The developer’s presence—and portfolio of properties—has only grown over the years, having also taken control of the coveted Morton Salt shed for a future adaptive reuse.
There was even an urban planning vision for the island drafted by the developer and partner Port Urbanism which highlights the need for extensive infrastructure improvements and new developments to be planned in tandem—going beyond an aesthetic connection, but a redevelopment that feels and functions as one.
In many ways, the redevelopment of Goose Island takes advantage of the same sweeping zoning change that allows for the creation of Lincoln Yards, but yet, these two neighboring sections of the North Branch seem to be moving forward in very different directions.
But of course, such extensive overhauls of these territories means the erasure of existing structures and their histories. If the gritty-yet-busy vibe of the old Fulton Market was one of the major elements that sealed the deal for Google’s office selection in Chicago, what does it mean when the legacy food distribution businesses are pushed out or sell out for redevelopment?
Do these places lose the authenticity that was such a major attraction for investment in the first place? What comes next for areas like the West Loop? New office buildings that speak the same brick and glass design language of the former industrial corridor, except the connection is purely a derivative one?
What about the Lincoln Yards site? Will its developer be able to recreate the same success it had in the West Loop? Or is this a totally different beast? Was there anything left worth saving along the North Branch sites? When you methodically clear 50 acres for redevelopment, is it possible to produce something that looks and feels and functions like an organic community?
What if you package and sell your new vision for an overhauled industrial site using the Chicago municipal device—the Y-shaped symbol seen on older structures throughout the city—as a branding and marketing tool? Does that make it more authentic? Or is it just one more thing that makes these plans beyond derivative to the point of becoming a caricature of a developer-devised urban utopia?
Mega-developments and inequity
In a classic gold rush atmosphere, early prospectors quickly move in to stake their claims in hopes of striking it rich while the latecomers are left out. But in the contemporary real estate gold rush of top-down mega-planning for mega-developments, it appears to be a strategy of winner takes all (this theme was also highlighted recently by Ryan Smith for Belt magazine).
The stakes are high, but when the city puts a thumb (and a hefty TIF bounty) on the scale, the risk is shared with taxpayers.
So why aren’t we seeing major investment at high-profile sites along the south lakefront? The answer might be incredibly simple and equally, incredibly cynical: There isn’t enough value for mega-developers to extract from these communities.
One thing the debate over LY has focused for me is that under Chicago's current TIF-led econ development funding system, we can't even have a debate about whether to spend $900m in Austin or Roseland or Brighton Park bc the property value increments there will never be that big https://t.co/iz8s4L37vD
— Daniel Kay Hertz (@DanielKayHertz) March 13, 2019
Spending $6 billion along the river in the heart of the North Side is likely to return a much larger reward than say redeveloping the former Michael Reese Hospital site or former U.S. Steel South Works campus. And then there’s the role of financing and sheer amount of hard capital required to see a mega-development fully realized.
And it’s not just about inequity in terms of where money is and isn’t being spent, but it could also be seen as an inequity in investment. If tax increment financing is supposed to be used to help kickstart private investment for revitalizing buildings or places that are considered to be blighted, then why is it that major developers are getting equally major TIF deals from the city?
This is a question that countless Chicago neighborhood residents continue to ask as these proposals push through the various votes at City Hall.
City leaders might respond by saying that we need to spend money to make money and that the upside for future property tax generation and office jobs are more than worth the price. Some aldermen might say—and did say during the Lincoln Yards vote in March—that we can’t pass up the opportunity for the thousands of construction jobs that these mega-developments are expected to provide.
During the March 15 vote, the Daily Line reported 15th Ward Ald. Raymond Lopez as suggesting that slowing down or rejecting the Lincoln Yards plan was an example of privileged thinking.
…As I say all the time: The South Side alone, in landmass, is the size of Philadelphia. I want a mayor who sees it that way and understands that it’s not “neighborhood redevelopment” that’s needed, but urban planning at a city-sized scale for the South Side. West Side too…
— Lee Bey? (@LEEBEY) March 22, 2019
But what does it say when a developer shows up with a plan, asks for a TIF district, and then gets it every time? A developer might say that the future property tax dollars at these sites wouldn’t be there if it weren’t for their intervention, so that entitles them to recapture much of that value on the backend. But as an economic tool, the use of TIF has hit a ubiquity throughout the city, leading to evermore questions and concerns about transparency.
Coincidentally, developer Sterling Bay announced plans for its first South Side venture less than two weeks before the final City Council vote on the North Branch TIF. The project, which is being developed in tandem with DL3 Realty, will overhaul a five-acre section of the former Kennedy-King College site near 67th Street and Wentworth Avenue, Block Club reported.
Should we fear the new wave of Chicago mega-developments? Not necessarily. But if the public is on the hook for billions, Chicago taxpayers deserve a seat at the table. And before plans are sent to City Hall for a rubber stamp, there are a few things that developers should always agree to as a show of good faith to a weary public.
- Meet (or exceed) affordable housing requirements — This really should be a no-brainer for developers, especially those who are benefitting from newly formed TIF districts that they specifically requested. It’s called the Affordable Requirements Ordinance for a reason—it’s in the name.
- Give neighbors and preservationists a sufficient heads up—Residents shouldn’t have to feel that they’re being duped or that information is being withheld. And in the case of vast stretches of city that are being razed in order to clear the path for new development, preservationists and planners need time to do research and understand what is being lost.
- Deliver a real transit plan—If it looks like a grid, feels like a grid, and functions like a grid, it’s probably a Chicago neighborhood. The city was planned this way for a reason. Beyond being an efficient method for planning and transit, following the lines of the existing grid helps to ensure neighborhood integration and promote accessibility.
- Stop overselling your vision—In essence, developers are salespeople. But instead of pitching a community, most developers are creating “product” that is to be constructed and sold (or leased). Address the questions and concerns people have with these plans instead of selling residents on amenities. Just because a developer says that their plan is “authentic” doesn’t mean that it is. Paying lip service to Chicago history and communities isn’t authenticity. If it feels authentic, it’ll be obvious.
While decisions have been made on many of these plans, there’s still an opportunity for a continued dialogue and push to see better terms and outcomes for Chicago residents. The tidal shift at City Hall may also mean that there’s a new opportunity for a new leaders to wrangle control over these projects and their developers while rebuilding trust with the public.
And perhaps most importantly, the new mayor and city council need to deliver a cohesive strategy that integrates all of these projects in with the city while also a leading to a roadmap for new investment in the south and west sides.
What does a 21st century Chicago look like? It all depends on what happens in 2019.
AJ LaTrace is a freelance writer covering Chicago real estate, development, and preservation.