LOGAN SQUARE — After a series of setbacks, an $88 million proposal to redevelop the crumbling Congress Theater is moving forward — with some help from the city.
City Council’s Finance Committee on Monday unanimously approved dedicating $27 million in tax-increment finance dollars (TIF) to the ambitious project. Members of the committee also approved a three-year extension of the Fullerton/Milwaukee TIF district, the source of the funding that was set to expire next year.
The votes set the stage for final approval at the next full council meeting Wednesday.
Baum Revision is the latest developer to endeavor an overhaul of the 1920s movie palace-turned-music-venue, which has sat empty since it was closed by the city in 2013.
Baum plans to restore the 3,500-seat theater at 2135 N. Milwaukee Ave. with AEG Presents as the operator and inject new life into the surrounding retail space and apartments, which have also sat vacant for at least a decade. AEG runs dozens of venues across the country, but none in Illinois as of yet.
The developer’s proposal includes a total of 13,000 square feet of retail along Milwaukee Avenue and 16 apartments. Fourteen of the units would be reserved as affordable housing.
Proponents of the project have said a redeveloped Congress will give a languishing stretch of Milwaukee Avenue a much-needed economic boost. But Baum has struggled to get the project off the ground for financial reasons. Building costs have greatly increased during the pandemic. Meanwhile, the poor condition of the landmark building has only worsened.
Significant water damage caused by holes in the ceiling and other structural issues have made the theater unsafe and hiked up the cost of redevelopment, said Tim Jeffries with the city’s Department of Planning and Development.
The Congress was operational in 2013 and former developer Michael Moyer held a public meeting in the venue in 2015, “but the deterioration over the past decade has been so aggressive though that neither is possible today,” Jeffries said. “The building conditions are simply not safe enough to allow access to the general public.”
At Monday’s meeting, Jeffries said the TIF funding — and extending the life of the TIF district — is necessary to bringing the “extremely complex” project to life, in part because of how costly it is to restore the building’s historical elements.
Built in 1926 by Fridstein & Co., the Congress is one of the last remaining theaters associated with famous “moving picture theater” operators Lubliner & Trinz.
“This development will not move forward without an investment of public funds,” Jeffries said.
Tax-increment financing districts capture new property tax growth in a designated area for a set period of time, usually 20 years or more, and divert it into a special fund for projects designed to spur economic development and eradicate blight.
Baum officials have said they don’t have nearly enough time to complete the Congress project under the current terms of the Fullerton/Milwaukee TIF, which requires all projects using those dollars to be complete by the end of 2024.
In late May, the Illinois General Assembly approved an extension of the Logan Square TIF district at the request of La Spata and Baum officials. Typically, such districts are extended for 12 years, but La Spata and city officials shortened the terms so it aligns with the Congress project.
“It is the opinion of DPD that the overall market conditions of the area would likely not warrant an extension without these extenuating circumstances,” Jeffries said.
La Spata pushed the proposal through over the concerns of other community leaders, including his colleague, Ald. Carlos Ramirez-Rosa (35th), who felt the plan lacked transparency and worried an extension would siphon away resources from neighborhoods that need more investment, a common criticism of the city’s controversial TIF program.
The vote on Monday to support the Congress project with $27 million in TIF dollars comes after years of financial hurdles and delays.
Developer Michael Moyer set out to redevelop the venue a couple years later, but plans fizzled after he, too, defaulted on his loans.
Baum took the reins of the project in 2021, but quickly hit a snag. For months, the project was in limbo over a “good jobs agreement” between AEG and local union UNITE HERE Local 1. But that issue has also been resolved as an agreement between the two parties has been reached.
“We have met with the development teams and we are confident that there’s a path for both proposed developments to create good hospitality jobs for the community,” Lou Weeks, vice president of UNITE HERE, said during the public comment portion of Monday’s meeting, also referring to a proposal to redevelop a Motor Row building in the South Loop.
The city’s current redevelopment agreement with Baum, which is tied into the TIF allocation, requires at least 75 percent of retail spaces and affordable apartments to be occupied. It also stipulates that AEG operate the theater for no less than 10 years, Jeffries said.
Under the agreement, commercial rents can’t be greater than 75 percent of the neighborhood’s market-rate, which could be a first for such a project, and spaces must be leased to locally-owned businesses, community organizations and local artists
If those conditions aren’t met, the city has the right to lien the property and take back the TIF money, Jeffries said.
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