DOWNTOWN — Downtown aldermen are concerned about the future of a Lightfoot-era initiative to bring mixed-income housing to LaSalle Street, saying the plan could be delayed as the city redirects TIF funding that would have largely bankrolled the projects.
Announced last fall, the LaSalle Reimagined initiative was created by former Mayor Lori Lightfoot to add more than 1,600 residential units, 600 of them affordable, to the financial district. The city offered developers tax-increment financing and other incentives to repurpose historical buildings along LaSalle Street.
Six proposals for redevelopments were made, and the city picked five finalists earlier this year to continue the vetting process. Combined, the developers behind the projects are asking for $307 million from the LaSalle Central TIF district to subsidize the conversions.
Each of the proposals would convert vacant office space along LaSalle Street into apartments. Some proposals also include plans for grocery stores, restaurants and terrace green space for residents.
But Mayor Brandon Johnson plans to declare a $434 million surplus from the city’s tax-increment financing districts in his 2024 budget.
That move would return unallocated money from the city’s TIF districts to their taxing bodies. About $111 million of that funding would come out of the LaSalle Central TIF District.
Downtown alds. Brendan Reilly (42nd) and Bill Conway (34th) are none too pleased about that, and they grilled city officials about the future of the LaSalle Street program during a Department of Planning and Development budget hearing Wednesday.
There is no TIF allocation for any of the five projects in the planning department’s proposed budget for 2024, city officials said at the budget hearing.
“Those developers who initially decided to opt into this LaSalle street program, they’ve been laying out a lot of costs on the front end for architecture, design, consultants … yet they’re not really sure whether this program is going to be there intact 100 percent or even 50 percent,” Reilly said.
The lack of available TIF funding next year means developers behind LaSalle Street projects will have to wait until at least 2025 to be allocated any of that money. Before that can happen, the proposals would have to make it through a rigorous vetting process before being voted on by City Council.
Planning department officials assured the aldermen allocating the surplus in this year’s budget would not hurt the LaSalle Street proposals. The projects depend on TIF funding to subsidize construction.
“We would not obligate an applicant to a project that the city was going to commit themselves as being a financial partner and not be able to support our commitments,” said Patrick Murphey, the planning department’s acting commissioner.
Still, Conway said “pillaging” the LaSalle Street TIF not only would delay the projects at least a year but deny incoming and current residents much-needed affordable housing.
“I think that’s a problem,” Conway told Block Club.
A large majority of the 1,600 units was predicted to serve the “thousands” of Google employees who are expected to move Downtown after the tech giant redevelops the Thompson Center.
Google announced in July 2022 it would take over the Thompson Center, saying it’d buy the building for $105 million after it is renovated. Google is expected to turn the building into offices for its workers.
Google got the city’s OK last week to demolish the Thompson Center’s glass facade, a sign things are moving along with the building’s conversion, which is expected to be completed in 2026.
Pushing back the timeline for funding would make it less likely any of the five proposals would be ready in time for Google’s move-in date. Most of the proposals had predicted being able to break ground in 2024 and opening in mid- to late 2026.
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