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Bronzeville, Near South Side

City Officials Blocked Land Sale To Help Michael Reese Megadevelopment, Lawsuit Says

King Sykes LLC said city leaders thwarted a $30 million deal to sell the land to a data center operator, then offered a lowball deal to scoop up the land for the megadevelopment.

A rendering of the proposed Bronzeville Lakefront development at the former Michael Reese Hospital site.
Farpoint Development
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BRONZEVILLE — The owner of a plot of land across the street from the Michael Reese megadevelopment says city leaders and developers blocked attempts to sell that land because officials want to incorporate it into the $3.8 billion project, according to a lawsuit filed last week.

King Sykes, LLC filed the lawsuit in federal court March 15 in Chicago.

King Sykes, LLC has owned a 6.5-acre plot of land at 2545-55 S. King Drive since 2007, according to the suit. The company demolished an outpatient health care facility there with the intent to sell the land to Equinix, a data center operator, according to the lawsuit.

The suit alleges city officials wanted to gain control of the King Sykes land in 2016, when officials sought proposals to redevelop the Michael Reese Hospital site across the street along King Drive between 26th and 31st street.

In the request for proposals, officials said they’d consider pitches for the city-owned Michael Reese land, as well as proposals that included the Marshaling Yards — another nearby land parcel owned by the Metropolitan Pier and Exposition Authority — and the land partially owned by King Sykes, according to the lawsuit.

All three sites sit in Ald. Sophia King’s 4th Ward.

Credit: Provided
A rendering of the 48-acre Michael Reese site for the $4 billion “Bronzeville Lakefront” project.

The city chose GRIT Chicago, a coalition of developers led by Farpoint Development, to overhaul the Michael Reese site in 2017. The project has been branded as the Bronzeville Lakefront.

In August 2017, King Sykes representative Brett Walrod met with Farpoint manager Scott Goodman and another representative from the development team, according to the lawsuit. At that meeting, Goodman told Walrod that then-city planning Commissioner David Riefman encouraged him to include the King Sykes land in the plans for the megadevelopment, according to the lawsuit.

Goodman told Walrod he “needed the site, but not for another five to 10 years,” and said King Sykes would never receive city approval to use the land for another purpose because “it wasn’t in the public’s best interest,” according to the lawsuit.

“What Goodman meant was that he and the City would prevent Plaintiff from selling or developing the KS Site because they wanted to buy it at an artificially low price in the distant future as part of their plans for all three sites,” according to the lawsuit.

In April 2020, King Sykes began talks to sell the land to Equinix for $30 million to create a state-of-the-art multi-user data center, according to the lawsuit. When Equinix officials began working to get city approval for the project, Ald. Sophia King told company leaders the city had plans for the site, according to the lawsuit.

That meant the alderperson would block any effort from Equinix to build because city officials wanted the land for the Bronzeville Lakefront project, according to the lawsuit.

In late 2020, Goodman pitched the Bronzeville Lakefront site as an alternative for the data center, even though Equinix officials made it clear they preferred the King Sykes land, according to the lawsuit.

Equinix moved forward with the deal to build on King Sykes’ land, but it bailed out of it in early 2021 after King, Goodman and Deputy Mayor Samir Mayekar told the company the city wouldn’t approve the proposal, according to the lawsuit.

Shortly after, Equinix started talks with Goodman to buy land on the Bronzeville Lakefront site, according to the lawsuit.

Credit: Google Maps
The land at 2545-55 S. King Drive. Owners say city officials thwarted their attempts to sell it for $30 million because local leaders wanted the land for the massive Bronzeville Lakefront redevelopment nearby.

With the $30 million deal off the table, developers approached King Sykes’ owners in July 2021 to discuss buying the land, according to the lawsuit.

That same month, City Council signed off on a slew of zoning changes and land sales to start the Michael Reese development project.

Tucked into those approvals was a provision allowing developers to use part of the land to build an “electronic data storage center,” according to the suit.

Last May, King again met with King Sykes’ leaders and said the company wanted too much to sell, saying she thought $15 million was a fair price, according to the lawsuit. The following month, King’s office again told company officials the city would not allow them to redevelop the land “until the City decided what its plans were for the site,” according to the lawsuit.

In November, Goodman offered King Sykes $15 million for the land. King Sykes rejected the offer, according to the lawsuit.

The suit names the city, planning department Commissioner Maurice Cox, Ald. King, Mayekar, GRIT Chicago, Farpoint LLC and Goodman as defendants.

Farpoint declined to comment. Other parties named in the suit did not respond to Block Club’s requests for comment.

King Sykes is asking for at least $15 million in damages.

Bronzeville Lakefront has been touted as a gamechanger for the South Side, making history as the first massive city project to be helmed by a team of predominantly Black developers and the first to incorporate a “social impact” program to ensure residents are engaged.

Credit: Provided
A rendering shows what the ARC Center and Bronzeville Welcoming Center planned as part of the Michael Reese Hospital redevelopment would look like.

The project is huge in size and scope, encompassing 48 acres and several phases of development.

ARC Innovation Center, a 500,000-square-foot facility, will be home to a life sciences center focused on health equity. The ground floor will feature mostly food and beverage retailers with an eye on cultivating a commercial corridor that supports Black-owned enterprises, developers said.

A mixed-income senior housing development and a renovated Singer Pavilion — the former psychiatric institute once on Landmark Illinois’ list of most endangered historic places — are also part of the development’s first phase, which is projected to cost $600 million.

A Bronzeville Welcoming Center is also in the plans. Visitors will be able to learn the history of the area and hear about cultural landmarks. It would be the first stop of the Black Metropolis National Heritage Area, a tourism district honoring the legacy of Black Chicago while creating economic opportunities to cement its future.

King and a group of advisers have been leading the development of the space, which would be a continuation of the Bronzeville Information and Tourism Center spearheaded by team member Paula Robinson in 1989.

The Black Metropolis National Heritage Area Act was signed into law in December.

Groundbreaking for the first phase of Bronzeville Lakefront is scheduled for March 29.

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