DOWNTOWN — The city is trying to revitalize Chicago’s iconic LaSalle Street corridor by offering up incentives to convert vacant office buildings into apartments and condos.
The program, announced Monday, aims to add more than 1,000 new residential units to the immediate area by offering developers tax-increment financing (TIF) dollars and other incentives repurpose historic buildings along LaSalle Street, with 300 of the units being affordable, officials announced.
“There is nearly 5 million square feet of vacant commercial space on the LaSalle Street corridor, but not a single unit of affordable housing,” Mayor Lori Lightfoot said in a statement Monday. “Diversifying this corridor is an essential component in our strategy to restore LaSalle’s vitality, create more neighborhood-serving retail, and foster a more inviting pedestrian environment in the heart of the Loop that will benefit all Chicagoans.”
Properties located on LaSalle from Wacker Drive south to Jackson Boulevard would be eligible to apply for TIF money, which would help cover some of the costs of conversion.
Deputy Mayor Samir Mayekar told Block Club it’s tough to speculate how many property owners will apply but he’s seen a “significant amount of interest” from developers. The LaSalle/Central TIF District had about $197 million in its coffers at the end of 2021, according to an annual report.
Proposals are due Dec. 23 with priority consideration given to Chicago Landmark buildings, a building rated “orange” by the Chicago Historic Resources Survey, or a contributing building in the West Loop-LaSalle Street National Register District, according to city documents.
About 19 buildings located inside the project’s boundaries qualify for priority consideration, according to a city map of the corridor. Historic buildings would also be eligible for additional city, state and federal subsidies for redevelopment, Mayekar said.
Applicants must dedicate 30 percent of all planned residential units for affordable housing; have plans to reactivate building lobbies and other spaces for cultural or entertainment purposes; and include storefront improvements to attract neighborhood amenities like grocery stores and locally-owned restaurants.
The announcement is in line with the recommendations the Urban Land Institute panel made in a July report the city commissioned to tackle high vacancy rates in the area.
Vacancy rates for on and near LaSalle Street are higher than any other part of Downtown with 25 percent vacancy for office space and 36 percent for retail space, according to market studies prepared by the city.
The $105 million sale of the Thompson Center to Google has already sparked interest with developers interested in converting buildings across the Loop.
Real estate and construction experts previously told Block Club they expect to see large numbers of people moving downtown as a result of Google’s purchase, therefore residential conversions will be high priority for developers.
RELATED: The Google Effect? Experts Say Tech Giant’s Thompson Center Move Could Bring More Residents Downtown
The La Salle TIF initiative is the city’s effort to make sure that revitalization includes affordable housing, Mayekar said.
“I’m a firm believer in the free market. However, the free market is not equitable. And in order for us to have affordable housing Downtown … that’s when the public subsidy is going to come to play,” Mayekar said.
The revitalization plan has received support from Downtown Ald. Brendan Reilly (42nd) who called it “a major step in helping revitalize an important corridor in Chicago’s Central Business District.”
There is no set timeline for completion of these projects, but Mayekar said he hopes to some will start conversion in 2023 and open ahead of Google’s move into the Thompson Center in 2026.
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