Greising: The Win-win of Chicago's High-rise Mania
BGA President David Greising writes a regular column for Crain's Chicago Business.
Armchair architecture critics have had a field day with the proposed redevelopment of Union Station. Prompted by initial, disappointed reviews by trained critics, a Twitterverse of opinionators has poured in. Some have created memes that offer alternatives to the proposed design. One plops a corner of the Thompson Center atop the historic train station; another bolts a multistory Binny’s Beverage Depot sign to the glass-and-steel sheath of the proposed addition.
The critics and commentariat have had their say. But on one point, many people can agree: Whatever the merits of the design, it’s good to see the Union Station modernization almost underway. Like the Old Main Post Office before it, Union Station has been the relatively little project that just couldn’t get going.
The pending startup at Union Station is a sign of the get-it-built times in Chicago. By one count, more than 50 high-rise buildings were under construction as the year began. The pace of construction starts has slowed lately, but the booming redevelopment of downtown will be creating jobs in Chicago for years.
To civic boosters, this is good news. But for Mayor Rahm Emanuel, facing a tough re-election battle, the downtown construction boom is a political mixed bag. When construction cranes spring up like midsummer weeds in the 312 area code, a mayor with a reputation for favoring downtown at the expense of the neighborhoods will have some explaining to do. Lori Lightfoot, Paul Vallas and other mayoral contenders no doubt are laying plans to use the construction boom against the mayor. Even Emanuel’s energetic pitch for Amazon’s HQ2 and its bounty of 50,000 jobs has been criticized by opponents.
When the critique comes in, Emanuel will be ready to strike back, and one of his favorite counterpunches likely will be the Neighborhood Opportunity Fund. It’s a program that takes the downtown boom and turns it into cash for businesses on the South and West sides. Chicago’s building codes limit the density of construction projects. But under the program, developers can “purchase” the right to ignore the density caps downtown.
What impact the carve-out has on quality of life in Chicago remains to be seen, but on a purely financial basis this much is clear: The program has broadly exceeded expectations. Launched in 2016, it was expected to generate about $50 million in payments from developers over the first three years. But the construction boom, and developers’ appetites for high-rises, means that more than $50 million in fees will be generated in 2018 alone.
David Reifman, Chicago’s planning commissioner, in an interview says fees from the program could amount to “hundreds of millions” over the next few years. In fact, the city could take in more than $100 million from development of a single 62-acre parcel south of the Loop, he says.
The spigot of funds into the neighborhoods, along eight preapproved commercial corridors on the South and West sides, has just barely begun to open. Emanuel so far has awarded $6.4 million to 57 small businesses in two rounds of grants. Applications are open for a third round.
With 80 percent of the funds earmarked to those South and West Side neighborhoods, Emanuel will be able to use the program to parry thrusts from mayoral contenders claiming he has ignored the neighborhoods. He’ll also surely mention major investment in the Red Line and in CTA stations throughout those neighborhoods, while his opponents will wonder—with good reason—why he has not made more progress addressing crime or fixing the crises in Chicago Public Schools.
The Neighborhood Opportunity Fund program is subject to complaints that Emanuel is distributing pork to buy votes, or that grants will be used to award political friends or withheld to punish foes. But the program requires City Council approval for grants of $250,000 or more. The council is almost wholly under Emanuel’s control these days, so the money won’t go anywhere Emanuel doesn’t want it to. But the formality of a council vote gives the mayor cover against charges that the program is just a political pork barrel.
Reifman says the program serves both downtown and the neighborhoods. “We have a plan to leverage our market strengths and make them work for the city as a whole,” he says.
And, as it turns out, the plan works for Emanuel’s political interests, too.