Empty offices along the LaSalle Street corridor in the Loop may soon be revived into apartments and other uses after sitting vacant due to COVID-19 and the exodus of large firms to newer buildings.
Three developments were chosen to receive financial support from the city on Tuesday through the LaSalle Reimagined initiative, which aims to convert some of LaSalle’s five million square feet of vacant space into residential and retail use. The city invited developers to submit proposals for redevelopment in September, and nine developers originally submitted proposals.
The redevelopment plans are part of a city effort to bring more housing, 30% of it affordable, to the Loop, an area that has historically been out of reach for lower-income individuals, with the city calling the project the largest affordable housing commitment downtown and one of the largest office-to-residential conversions in the entire country in Tuesday’s press conference.
The office-to-residential conversions will invest $550 million downtown and are expected to bring more than 1,000 new apartments to the central business district, including 318 affordable units. The sites to receive financial support are located at 111 W. Monroe St., 135 S. LaSalle St. and 208 S. LaSalle St.
“The LaSalle Street corridor is a vital economic engine for our entire city, and we must ensure it remains that way by transforming it from a homogenous office district into a thriving, mixed-use community,” said Mayor Lori Lightfoot in a news release Tuesday. “By converting underutilized office space to residential units, we will make the Loop a safer, more dynamic and vibrant place to live and work.”
The Loop’s estimated population stood at 46,000 in 2022, up nearly 10% from 2020, according to the Chicago Loop Alliance, an advocacy group. A study conducted by the alliance in 2022 found that housing in the Loop is unattainable for many households earning $75,000 or below, with less than 1% of total units, or 239 units, in the Loop designated as affordable and only 23 affordable units currently under construction. There are no affordable apartments on or near LaSalle in the Loop currently, according to the news release.
The redevelopments will receive a range of financial incentives — including tax increment financing dollars (TIF), funds that developers can access to make infrastructure and other community improvements by tapping into funds pooled together by neighborhood property taxes — to help make units affordable. The affordable units are for tenants earning an average of 60% of the area median income or $50,040 for a two-person household, according to the news release.
Some of the goals for each project are to “revitalize an underperforming historic property, provide 30% of the total housing units at affordable levels, and create neighborhood-oriented building amenities that contribute to a dynamic, mixed-use, downtown environment,” while meeting minimum diversity requirements for construction teams, according to the news release. This is around 10% more affordable housing per project than would have been required under regular city ordinances.
“As the Loop population continues to grow and the market leverages new housing opportunities in underutilized commercial spaces, these projects are laying a foundation for a dynamic, mixed-use corridor that serves all Chicagoans, regardless of their incomes,” said Maurice Cox, department of planning and development commissioner, in the news release.
Built in 1910, 111 W. Monroe St. will be “The Monroe Residences & Hotel,” developed by the Prime Group Inc. and Capri Interests LLC. The $180 million building proposal includes 349 apartments on its upper floors and a 226-room hotel on its lower floors with a bar and restaurant and basement parking included.
Built in 1934, 135 S. LaSalle St., known as the Field Building, will be developed by Riverside Investment & Development and AmTrust Properties. The $258 million building proposal includes 430 apartments and plans for a grocery store in some of the retail space.
Built in 1914, 208 S. LaSalle St. will be “The LaSalle Residences,” which will also be developed by the Prime Group. The $130 million building proposal includes 280 apartments with amenities for tenants, as well as a restaurant.
The three finalists will move on to the next phase in the city’s development processes, including evaluations by the Community Development Commission, Commission on Chicago Landmarks and City Council, according to the news release. The Department of Planning and Development said the projects are expected to break ground at the end of this year or early next year.
The city will also make additional TIF funding available for projects that meet requirements similar to the ones for the LaSalle Reimagined projects, as well as accept applications in September for private projects that seek to revitalize ground-floor commercial spaces for “neighborhood-oriented uses” with the available $300,000 from the Small Business Improvement Fund, according to the news release. An additional $50,000 will be available for South and West side businesses looking to expand to the Loop, Cox said at the news conference.
The city narrowed the nine proposals down to six in January. One of the six projects that did not receive city financing was one of the two proposals for 105 W. Adams St, which was a plan proposed by Celadon Partners and Blackwood Group LLC to bring 185 affordable units, or 75% of its units, downtown.
Jose Duarte, principal for Blackwood Group, said his team is not giving up on its project.
“It’s right up the alley in terms of what the city is looking to do in the downtown area,” Duarte said. “We will continue to work on any open questions that the city might have on the building and see if we can get it across the finish line.”
Nick Peterson, principal for and founder of Maven Development Group — the other developer whose proposal for 105 W. Adams did not receive funding — said his team will likely also pursue the additional TIF funding
“The deterioration of this building is going to continue … and I think that our project is the most straightforward solution for this building,” Peterson said. “We could really make something awesome.”
Chicago Tribune’s Brian Rogal contributed.