Developer Bob Dunn’s full-court press for state funding for his proposed One Central mega-development has paid off, even if the state has not yet given it final approval.
The Illinois General Assembly over the weekend passed a funding bill that allows the state to enter into a public-private partnership with Dunn for One Central’s proposed transit hub.
Dunn’s Landmark Development proposed the public-private partnership as a way to finance the $3.8 billion transportation center that will anchor the One Central development that would rise over a set of train tracks west of Lake Shore Drive in the South Loop.
Wisconsin-based Landmark sought approval for the partnership in the spring legislative session, saying action was needed now so the firm could apply for federal grants that are set to expire this year. That timeline sounded optimistic to some lawmakers, who were also considering proposals to legalize marijuana and dramatically expand gambling in the state.
Despite the busy legislative season, lawmakers included language in a funding bill that authorizes the state to enter into an agreement with Landmark regarding the transit hub’s financing.
“We want to thank Governor Pritzker, legislative leadership, and the General Assembly for seeing the potential of a new approach to economic development and investment in infrastructure in Illinois,” Dunn said in a statement. “The passage of this legislation is a positive and important step in moving One Central forward, and it gives us the ability to begin seeking federal funding for Illinois transit improvements.”
Dunn’s proposal for the public-private partnership called for Landmark to front the cost of the transit hub, with the state reimbursing the developer for the cost before taking ownership of the hub after 20 years.
The terms of that proposal have not gone into effect with the new legislation, however. Nor has Gov. J.B. Pritzker committed to the arrangement.
The new legislation will instead aid Landmark’s efforts to get federal funding. If federal funds are secured, the governor’s office would then negotiate a formal agreement with Landmark on a public-private financing plan for the transit hub.
The fate of Landmark’s proposed public-private partnership bill was up in the air as recently as Saturday. Language formalizing a deal first surfaced Friday, but revisions to shore up minority and union contracting in the project were introduced Saturday, according to Crain’s. The amended language passed as part of a state spending plan Saturday night.
Though no funds have yet been appropriated, the new legislation is a big win for Dunn, whose mega-development will need the approval of Chicago and the state’s new political leadership.
When Landmark announced its One Central plans in March, Dunn said his firm would not seek tax increment financing for the project. The team then rolled out is proposed partnership with the state, which would have the state reimburse Landmark for the transit hub costs by pooling future sales taxes collected at the site. The plan’s financing structure is similar to TIF deals, only in this case, the state would end up eventually owning the transit hub.
The state would be “getting the full benefit of the asset without taking the risk on the front end,” Dunn said in May.
With the outline of a state-financing deal in place, Landmark will now seek to secure federal funding through the Railroad Rehabilitation and Improvement Financing program, the firm said.
Specific plans for One Central have not been released, but renderings released in March envision as many as a dozen high rises being built above the transit hub along 18th Street and Lake Shore Drive, just west of Soldier Field. On top of likely residential, office and hotel space, the development could also include less traditional “mixed use” spaces like schools and medical facilities, Dunn previously said.
Landmark has not yet sought city approval for its project. The developers will continue with a “robust public process” before any formal zoning requests are made, a spokesperson for the developer said.
“We look forward to gathering the input of local residents, civic and community stakeholders, and leaders across the city,” Dunn said in a statement.