Chicago Deserves More Recognition As It Mounts Global Stage, Developers Say
Chicago's central core is set for a transformation over the next decade, with developers ready to launch major expansions of the downtown to the north, south and west. And the city's sometimes-overshadowed advantages are giving local developers reasons to be optimistic about the plans.
“In terms of both contractors and labor, we’re probably more efficient than any other market in the country,” Fulton Street Cos. Managing Principal Ross Babel said last week during Bisnow’s Chicago Mixed-Use conference. “We don’t get enough recognition for that.”
Vista Property Group Chief Development Officer Ark Latt said one of the keys to Chicago’s efficient construction is union labor. Whether it is the city’s electricians, stonemasons, plumbers or other workers, the unions train workers to high standards, which means projects get done on time.
“Do you pay more for that?” he said. “Sure.”
The city has the potential to develop an even deeper labor pool, according to Chicago Department of Planning and Development Commissioner Maurice Cox. The Lightfoot administration launched its INVEST South/West Initiative in 2019 and has already helped fund 12 projects in 10 commercial corridors in neighborhoods that suffered from disinvestment. A major focus is to make sure neighborhood residents have access to skilled-labor training programs and get hired to help rebuild their own communities.
“You have to have a pipeline that allows young folks who want to get into the construction training programs a way to do it,” Cox said.
The ground has been well-prepared for work to continue on massive mixed-use developments now rising near the city’s downtown, according to Zeb McLaurin, CEO of McLaurin Development Partners.
That includes Sterling Bay’s $6B Lincoln Yards on the North Side, Related Midwest’s The 78 just south of downtown and the Bronzeville Lakefront development planned by GRIT, a partnership of several developers, on the old site of Michael Reese Hospital.
McLaurin is part of GRIT and noted the lakefront site was the centerpiece of Richard Daley’s 2016 Summer Olympics proposal. When the Games were awarded to Rio de Janeiro, however, the city was left with a huge chunk of prime land and no plan. That changed when Amazon launched its 2018 competition for the location of its second headquarters. The developers put together a detailed proposal for the internet giant, including an analysis of the existing demand and potential users. That planning effort has paid dividends even though Amazon went elsewhere.
“That gave us the practice we needed to ready the site for the global stage,” McLaurin said.
Like the other massive mixed-use developments underway, the GRIT partners say life sciences and other research-based work is going to play a big role in the downtown’s expansion. Sterling Bay has already started construction on Ally at 1229 West Concord, a 320K SF building dedicated to life sciences, and in Bronzeville, the developers plan to create a 500K SF life sciences accelerator in partnership with Israel's Sheba Medical Center.
Attracting an institution such as Sheba is a sign Chicago has the potential to become a new center for life sciences in the U.S., McLaurin added, although the industry is still much smaller here than in metro areas such as Boston and San Francisco.
Chicago’s main obstacle to fulfilling its potential and building up its reputation as a great place to develop is essentially a public relations problem, according to Onni Group Vice President of Development Brian Brodeur.
Although it has a highly educated talent pool, national headlines emphasize the increase in crime experienced over the past two years, he said. But Brodeur splits his time between Seattle and Chicago and said he feels safer in the latter.
“But according to the national news media, Chicago is the most dangerous place in the country,” he said.
Onni Group plans to create a mixed-use community with more than 2,500 apartments on Chicago’s Goose Island, a former industrial neighborhood located between downtown and Sterling Bay’s Lincoln Yards. The Canadian firm is also spreading out to other submarkets, including the Loop, where it bought and is rehabbing 225 West Randolph St., an 853K SF office building, and Fulton Market, where late last year it bought the Ace Hotel at 322 North Morgan St. for $63M.
“Long-term, Chicago is a safe place, especially when you look at what’s going on around the country and the world,” Brodeur said.