Landmark Development Company promised not to seek tax increment financing funds from the city of Chicago for its ambitious ONE Central development in the city’s South Loop. Instead, they hope to partner with the state of Illinois in an unusual $3.8 billion buyback scheme.
The project would place a mixture of both civic and commercial uses—including hotels, multifamily properties, office, retail and a massive transit hub—over railway land along Lake Shore Drive. The economic model that Landmark proposes would see the state acquire the “Civic Build” transit portion of the project, estimated to cost $3.8 billion, with a series of equity payments over 20 years, at which time the Civic Build will be under state control and have an estimated value of $10 billion.
“The fundamental objective of this proposal to the state is to drive major economic growth through private investment in transit-oriented development unlike anything we’ve seen in this country to date,” said Robert Dunn, president of Landmark Development Company. “We have the opportunity to create a world-class transit and mobility hub that connects Chicago’s most significant civic and cultural attractions to transit, as well as the types of amenities that will strengthen the Chicago Lakefront as a global destination for visitors, residents and workers.”
Under the proposed model, Landmark would assume the entire risk to develop, finance, construct and operate the Civic Build components of the project, as well as the mixed-use commercial development on the site. Once the Civic Build phase is operational several years from now, the state of Illinois would begin making payments, partly from the tax revenues that the site will generate, which AECOM estimates to total $57.1 billion over 30 to 40 years. Landmark will also contribute private revenues from the project to help the state acquire the asset.
The main feature of the Civic Build is an integrated transit hub that would combine Metra, CTA and Amtrak rail service with bus service and pedestrian ways. Plans call for a local circulator system dubbed the “CHI-Line” that will take visitors on a circuit from McCormick Place to Soldier Field, the museum campus, Navy Pier and back. Landmark also allowed for an anticipated 6,000 parking stalls, new parks and green space, public gathering and event venues, plus millions of square feet of destination retail, dining and entertainment amenities.
The Illinois General Assembly is expected to hold a subject matter hearing on the funding proposal next week. If Springfield acts on the proposal before May 31, 2019, it has the opportunity to recoup up to $1 billion in its equity investment through a federal funding program that will otherwise be eliminated at the end of the year.
Undeveloped due to active Metra rail lines and maintenance operations that run through it, the proposed site for ONE Central has remained a void in the urban landscape. Landmark’s proposal to build a structural platform over the Metra facilities to realize the full potential of the site will accommodate necessary parking, the transit hub and new public green spaces, while improving walkability and direct transit to the museum campus, Soldier Field, Lake Michigan, McCormick Place and Wintrust Arena.
This would be the first Chicago development for Dunn, a Wisconsin-based developer who was behind projects such as Detroit’s Ford Field and the redevelopment of Green Bay’s Lambeau Field. He’ll be working with Gerald Fogelson—the developer behind Central Station, a 72-acre development to the north that includes properties such as One Museum Park—as he owns the air rights over the tracks.