The Real Deal Chicago

Riverfront revival: Megaprojects rise along Chicago River as waterway makes a comeback

From the North Side to the South Loop, the waterway is the focal point of development in the city right now
By John O’Brien | August 27, 2018 01:00PM

On opposite ends of the city, developers are rolling out plans for massive new projects intent on transforming underused land into new neighborhoods.

On the North Side, Sterling Bay is planning its $5 billion Lincoln Yards development, with 12 million square feet of residences and offices, hundreds of hotel rooms and a 20,000-seat soccer stadium.

On the South Side, Lendlease, CMK Companies and Related Midwest are working on adjoining complexes that will add well over 10,000 new residential units and $7 billion in investment to the South Loop.

What connects them is the Chicago River, what one developer called real estate’s “hot new amenity.” All four projects sit along branches of the river, the long-neglected waterway that from its earliest days the city treated as little more than a sewer.

Now, the river has become the focal point of major development in the city. That shift extends from the mouth of the river Downtown, where Related plans two soaring skyscrapers on the former Chicago Spire site, past Belgravia Group’s new Renelle condo tower off Wabash to where the river branches off toward the north and south beyond Hines Interests’ massive Wolf Point mixed-use development.

Industry pros say several factors led to the recent flood of development. Most notably, they point to a decades-long effort to clean up the river, along with zoning changes that opened up land to mixed-use projects and city efforts to build a grand riverwalk Downtown.

“For the longest time, the city turned its back on the river,” said Tom Kerwin, principal at bKL Architecture. “Now it’s an asset. It’s prestigious be be along the river.”

Kerwin’s firm is involved in the design of a number of projects in the works along the river, including the second phase of the GEMS World Academy campus on Wacker Drive, Renelle and Related’s Lathrop Homes redevelopment on the North Branch.

At the Lathrop site, the river was seen as a barrier to the property. Now, Related’s overhaul of the property will incorporate the riverfront, providing public access to the waterway.

“It’s going to rejuvenate the riverfront,” Kerwin siad. “Now it’s going to be a keynote to making the river accessible to everybody.”

The idea of public access to the water is a key component in many of the major development proposals, particularly the stretch on the east bank of the river between Harrison and 18th streets where Lendlease, CMK and Related all plan connected riverwalks in their projects.

The effort will “create one of America’s great places to stroll, to eat, to grab a drink,” said Curt Bailey, president of Related Midwest.

Colin Kihnke, founder and president of CMK Companies, said the firm’s Riverline project embraces the “engaging natural park” that runs along it. “Developers are realizing it’s the best natural resource we have,” he said.

Related vice president of development Michael Ellch called the riverfront “the hot new amenity.” He said part of the draw for developers is being able to create waterfront projects without the restrictions of trying to build on the lakefront.

“From a real estate perspective you can’t engage the water along the lake,” Ellch said.

Marketing materials for Related’s “The 78” project talk about how the site “faces the sunset — one of the only stretches of waterfront in the city that does.”

On the North Branch, Sterling Bay’s Lincoln Yards project would straddle the river at a bend just south of Cortland Avenue. The area had long been home to factories and other industrial properties until the city last year lifted zoning restrictions in the North Branch Industrial Corridor, opening up the area to office, residential and retail use.

Baker Development is building the 2017 North Mendell office project in the Lincoln Yards footprint. Principal Dan Slack said the change in zoning rules continued the “natural progression” of residential development toward the river, leaving the industrial landowners sitting on a gold mine coveted by developers.

“At the end of the day it just became apparent these companies could pull up stakes and make a lot of money,” Slack said. “It’s become lucrative for them to cash out.”

Land along the river had been used by industry going back to the city’s early days, but that changed when businesses started to move out, said Thomas Weeks, an executive at Lendlease, whose Southbank development is rising on the site of an old rail terminal on the South Branch.

As development surges in the South Loop and available properties become more scarce, developers can no longer ignore the largest remaining undeveloped swath of land Downtown where the three South Branch developments are planned, market experts said.

“We all recognize the potential,” Weeks said.

But it wasn’t just in lifting zoning restrictions that the city paved the way for the surge in riverfront projects. Developers said efforts started under former Mayor Richard M. Daley and have continued under Mayor Rahm Emanuel to clean up the waterway and develop the Downtown riverwalk and other infrastructure created a buzz around the river.

The city in 2016 completed an ambitious expansion and overhaul of the riverwalk on the main branch. The project was a success, drawing crowds to the bars, restaurants, boat tours and more. This month, plans were announced for a multimillion-dollar project to give the easternmost portion of the span a facelift.

Slack said prior to the city stepping in, the riverwalk was built in pieces, one portion by every developer building along the river.

“It was a walk to nowhere,” he said. Now, he added, “it’s come into its own.”

The goal is ultimately to extend it south from Lake Street to connect with the stretch of riverwalk planned in the Lendlease-CMK-Related developments.

“You’ll be able to walk from Chinatown to Lake Shore Drive,” Kihnke said.

The challenge though, is the stretch from Lake Street down to the South Branch developments, a narrow channel where each parcel is controlled by a private owner, said Margaret Frisbie, executive director of Friends of the Chicago River.

“It will take creative solutions,” she said.

Since 2000, Frisbie has led the group, which has been advocating for the river’s cleanup.

“I’ve seen a lot change,” she said. Frisbie added that “the river itself is so much cleaner that now it’s a community asset.” Besides more development in the future, Frisbie envisions a day when the once polluted river will be safe for swimming.

Great Rivers Chicago, a collaboration of the Metropolitan Planning Council, the city and others, set a goal of 2030 for making the river swimmable. It also set a number of other goals, including extending the riverwalk south past Chinatown to Western Avenue, connecting it to a proposed South Side rails-to-trails project called El Paseo.

That mirrors the vision for the North Branch, where the city plans a floating park along the east side of Goose Island called “The Wild Mile.” And city officials and developers talk of adding water taxi stops at various points in the new projects that will give people another way to move among the new developments.

“It’s apparent the river is going to continue to improve up and down,” Lendlease’s Weeks said.

That could eventually stretch as far as the waterway does, extending to the forest preserves and nature areas in the north and south suburbs.

“There will be a natural desire to keep it going,” CMK’s Kihnke said, talking about the redevelopment. “And it will keep spreading farther north and south.”