Developer pitches TIF-free plan for South Loop megaproject

Posted: May 7, 2019
better construction

A Wisconsin developer that wants to build a huge mixed-use complex across from Soldier Field wants to create an unusual partnership with the state of Illinois to finance construction of a $3.8 billion transit center and infrastructure within the South Loop project.

Linking Metra, CTA and Amtrak rail lines, the transit center would be the centerpiece of One Central, a 34-acre project that Landmark Development plans to build over train tracks just west of the football stadium. Landmark unveiled preliminary plans for the project in March but offered no specifics then on how it would pay for the transit center or the public infrastructure needed to support the project.

Rather than asking the city of Chicago for tax-increment financing, a controversial funding tool recently approved for big projects like Lincoln Yards and the 78, Landmark wants to cut a deal with the state. Under its plan, Landmark would finance the $3.8 billion transit hub and infrastructure cost itself, said Robert Dunn, president of Madison, Wis.-based Landmark.

The state would make equity payments over a period of 20 or more years to cover the full cost of the property, which it would then own. “You’re investing in an asset that creates massive economic lift and appreciates over time,” Dunn said.

Dunn is in the early phases of trying to sell state and city officials on his bold vision for the South Loop property, which could cost more than $20 billion and include multiple skyscrapers with apartments, condos, hotel rooms and office space rising along South Lake Shore Drive. Dunn, who has expertise in stadiums, sees an opportunity to create a thriving entertainment district next to Soldier Field and build a stronger connection between the South Loop and the lakefront.

Still, asking Gov. J.B. Pritzker or other Illinois leaders for anything these days seems like a long shot given the state’s precarious fiscal condition. They are more interested these days in selling properties, like the Thompson Center in the Loop, so they can raise money to balance the state budget.

But Dunn’s plan may have a chance because it doesn’t require any payment from the state until the transit hub is operating, which could be several years from now. Once it opens, the state would receive payments from retail and other commercial tenants, sponsorships and parking, he said.

Though Dunn said he has not presented his plan directly to Pritzker, he said he has discussed it with staff and with other state leaders, including House Speaker Michael Madigan. Landmark is working on drafting legislation for its proposal and aims for state approval this year. The project would be eligible to receive federal funding for transit-oriented development, but that money dries up at the end of the year, Dunn said. “If we don’t move on this now, some of these opportunities are gone, and they will be gone forever,” he said.

Dunn’s plan would need the approval of multiple other parties, including Metra, the CTA and the City Council, which would need to sign off on a zoning change for the project. Dunn said he has yet to present his plan to Mayor-elect Lori Lightfoot.

Dunn highlights the public benefits that would flow from the One Central, especially with regard to transit. The transit hub, for example, would allow commuters from Indiana to transfer from Metra trains to the CTA’s Orange Line, which would be extended. Dunn also wants to extend Metra’s BNSF line to the transit center and create a CHI-Line bus circulator that would connect Navy Pier, lakefront parks, museums and other attractions to the hub.

Dunn contends One Central would be a big winner for the city and state, citing a recent report commissioned by the Chicagoland Chamber of Commerce finding that it would create $120 billion in jobs other economic benefits over four decades.

Of that, the state would receive $57.1 billion in extra tax revenue as a result of the project, one reason Dunn believes the transit center would be a smart investment for the state.

The Illinois General Assembly is expected to hold a subject matter hearing on the proposal next week in Springfield, the developer said.

Dunn’s firm has worked on the construction or redevelopment of the home stadiums of the Detroit Lions, Minnesota Vikings and Green Bay Packers.

He was part of the team that oversaw the creation of the Atrium, a dining and entertainment complex attached to Lambeau Field in Green Bay.