Brendan Reilly on aldermanic privilege, condo deconversions and development in the 42nd Ward

Alderman Brendan Reilly oversees one of Chicago’s most active wards.

The 42nd is the epicenter of tourism, with attractions like the Magnificent Mile, Navy Pier and Millennium Park, and most of the city’s hotels. As the heart of the central business district, it’s seen a lot of change in the past decade amid the Downtown building boom.

Reilly estimates nearly 60 developments are in queue in the ward, including an array of office, hotel, rental and condo projects. Those developments would eventually add to the roughly 100,000 residents and 40,000 businesses that he currently represents.

From the Tribune Tower redevelopment to Lakeshore East, to Related Midwest’s controversial plans at the former Chicago Spire site, Reilly calls the shots on the 42nd Ward, which includes parts of the Loop, West Loop, Streeterville, River North and Gold Coast.

This interview has been edited for length and clarity.

What’s the biggest change you’ve seen in the 42nd Ward in terms of development since becoming alderman in 2007?

The skyline has changed dramatically, more large scale development proposals, a raft of mixed-use luxury condo and rental buildings delivered in the central core. The Loop has transformed from a closed-at-6 p.m.-jurisdiction to almost a 24/7 neighborhood with a lot of activity overnight. We’ve seen the 42nd Ward and broader portions of the central business district breaking tourism and visitor and convention records year over year for half of my tenure as alderman. So I think the fact that Downtown has experienced an incredible amount of investment, both domestic and direct foreign investment – setting some records in those areas as well – it shows, not just in our skyline, but the fact that we are now considered to be truly a global city and a destination for nearly 60 million people a year.

How do you determine whether a development is good or bad for the 42nd Ward? Have you developed any kind of formula over the years? Can you tell me about the back-and-forth that usually happens during negotiations with developers?

We have a very intensive outward-facing process to vet these projects. The typical process in the 42nd Ward is a developer and his or her team – architect, traffic consultants, zoning lawyer – come to City Hall with some initial plans, a proposal, and we’ll walk through their current entitlements, density, proposed uses, site circulation, traffic, loading, the garage and ingress/egress, parking, aesthetic, proposed design, massing, garage base, all of that. This is a checklist I’ve developed during my now almost 13 years of doing this, for the intake, and then based on those various criteria, I’ll push back on certain components and tell them which adjustments to make before we can vet the plans through a public process.

Once they’re suit to a degree – that doesn’t mean I endorse the plan – we work with a neighborhood group for that area to host a public meeting. Typically, my public meetings are super well-attended. The Tribune Tower meeting, for example, drew over 1,000 to fill the ballroom at the Sheraton Hotel. So we get a lot of community participation. After that first public meeting, I have basically a roadmap for success with the objectionable points the neighbors have raised for meetings with the Department of Planning and the Department of Transportation, where we’ll determine the legitimate concerns and develop a negotiating list. Once we feel that the developer has made changes to satisfy the items on that list, we’ll have another community meeting to go through all of the changes and see how folks react to that. Oftentimes there will be two or three hanging chads, remaining issues to be addressed after that meeting and we’ll go back and negotiate those, and as soon as those are addressed, then we go off to Planning Commission, through Zoning Committee and then council approval.

But each alderman has a different way of administering public process. I don’t deputize a group of citizens to vote yes or no on projects. If that were the case, nothing would get built downtown. But I do design a process that is very transparent. Neighbors have a seat at the table, through me, every step of the way, and progress is communicated back to the neighbors, every step of the process, so they know the issues on the table and if we’re making progress in getting them addressed or not. A lot of developers, especially the ones that have delivered projects with open greenspace, have acknowledged that while it provided lots of headaches and may have cost them some more money, that the final product was better than what they came in the door with. So it’s not like we’re saying my way or the highway, it’s let’s work together to make your project even better.

What was the most challenging but rewarding development?

A lot of the projects that we do downtown are challenging, because it’s already a heavily built, dense environment where traffic isn’t stellar already. So adding new density [with] each one is challenging. Obviously, the [most challenging] projects [are those] that are largest in scale and scope, the ones that impact the most views and the most property addresses with traffic. Trump Tower, IJKL in Lakeshore East and the Children’s Memorial Hospital were challenging projects. The Spire remains a challenge; we’re still working through that.

The other most challenging [project] was fighting against a development proposal for the Children’s Museum. Mayor Daley very much wanted to build a museum in Grant Park, exactly where Maggie Daley Park is today, but as I researched the covenants that protect Grant Park, I learned real quick there were four state Supreme Court decisions that said you can’t build stuff in Grant Park. And so that became an almost two-year fight. Ultimately, it was a huge City Council showdown. A vote was taken, I lost, but it was close. And then the opponents to that project, with my assistance, got some lawyers and filed litigation. And then Mayor Daley retired, Rahm [Emanuel] came along, and I persuaded Rahm to take away the zoning approval. But that was, at the end of it, a six-year fight that involved thousands of people, especially open space advocates. I think that’s really what made me a recognizable elected official because this was a very public, very personal thing.

Why do you support aldermanic privilege? Is it fair that aldermen essentially get to decide which developments move forward in their ward?

I would say that I think there’s a lot of room for reform with aldermanic privilege/prerogative. It just depends on what subject matter. When it comes to zoning and land use planning, I think that aldermanic privilege is a double-edged sword. I think there are recent examples of aldermen abusing that privilege for personal gain or to settle a vendetta. Neither of those factors should be a part of land use planning or zoning approvals. So in those cases, I think that this kind of gentleman’s agreement, which is prerogative, was abused.

On the other hand, if you’re a neighborhood resident, and you have a responsive, responsible alderman, you know that person’s going to have your back and, in my case, take developers through a very rigorous public process to negotiate a better end product. Without prerogative, I have no leverage to deliver that, so that whole process that I just mapped out for you goes out the window if the mayor eliminates aldermanic prerogative or privilege, whichever you’d like to call it. Then the alderman’s not involved in that process, and being invited to provide input to the mayor on the decision she or her administration will ultimately make is very different than being able to put the brakes on a really bad idea.

At least in the 42nd Ward, I think it’s worked rather well, under my stewardship. In other areas, I think there is room to reform prerogative/privilege on business permits and certain types of licenses, signs, loading zones and things like that. I think there’s some room to make that a more objective, automated process. But for most people who live in Chicago, especially those who own, that’s your most important investment and under today’s system. If you don’t like the decisions your alderman’s making about real estate and development, you have the prerogative to throw that alderman out of office, and that’s happened. Without prerogative, the alternative is someone who works in the Department of Planning, who may or may not live within miles of the subject address, will be making decisions that impact thousands of people, perhaps without a real keen understanding of the neighborhood context, the local quality of life issues at play, some of the kind of long-standing traffic issues and loading issues in that area.

So, like any policy change, there are pros and cons. I’m not an ardent defender of privilege. It’s what I inherited when I was elected. It’s not codified anywhere, so it’s difficult to get rid of. It is based on an understanding among colleagues. If you come to the zoning committee with an item and you say it’s a good thing for the neighborhood, who am I – 10 miles away – to say it is or isn’t? I trust you’ve done your job, and if you haven’t, your voters will throw you out of office. So that’s my general view on that.

How has aldermanic privilege allowed you to better serve the 42nd Ward throughout your tenure?

I think that if you look at the vast majority of projects that have gone through our process, from where they started – the initial photo of this is what we’d like to build – to the final rendering of what’s approved by the city, 90 percent of those projects look substantially different. At the end of the process, the developer acknowledges substantial improvements from what came in through the intake process as a proposal to what was approved. So I do think having that leverage, and in being able to compel developers to negotiate in good faith, has served the 42nd Ward really well. On the other hand, there are colleagues of mine whose way of administering zoning approvals I don’t agree with. There isn’t that really robust process. It’s kind of a, ‘I have appointed these 10 people that I’m friends with to say yes or no to you.’ I don’t think that’s the way to do this either. So now, another downside of the prerogative is that the rules of the road for the developer change based on the ward boundary. So my process may be different from one of my colleagues to the north or west, and theirs could be very different than the colleague the south of them. So I understand that developers can get frustrated with it. It’s imperfect. But it has served, I think, neighborhood interest well for decades.

Why did you introduce the ordinance that ultimately increased the threshold for condo deconversions to 85 percent of owner approval for a bulk sale?

That was initially a legislative initiative in Springfield, and one of my good friends state Rep. [Sara] Feigenholtz was a leader in that fight. What we had found is that there was a rash of deconversion plays in and around Downtown. A lot of my older constituents, especially, were very concerned that they were going to be voted out of their homes by their neighbors or by folks that in many cases own large blocks of condos as investment properties and don’t live in the building. We found that if you have a willing commercial owner in a mixed-use building and a resourceful deconversion developer, who is able to stack up a bunch of units quickly by purchasing the nonowner occupied units, it doesn’t take a whole lot of residents to push that proposal over the top for deconversion. I’m not anti-deconversion. In a lot of cases, you can you can argue deconversion is the best thing for a building: depleted reserves, nearing bankruptcy, huge debts, deferred maintenance, unsafe conditions, all those things. But in those cases where a building is truly distressed, you’re not going to have a lot of folks putting up a fight to keep it. They’ll be happy to deconvert that for you. The concern is that developers are also targeting buildings that are well capitalized, that have big reserves, by using deceptive marketing practices, preying upon older people who may not have all their faculties, using fear tactics and telephone campaigns, that literally talk people out of their homes. For me, we have a vulnerable senior citizen population, who have lived in their owner-occupied units for 30 to 40 years. These are not millionaires, these are pensioners who just happened to buy a unit in Downtown Chicago three or four decades ago. They can’t replace that property somewhere else in the neighborhood. And that was the real impetus, to protect the vulnerable.

A lot of developers are doing this by the book in a very open way. Others are less scrupulous. And I have to legislate to the lowest common denominator, to the worst actor. And so I didn’t wake up one day say, ‘Hey, let’s raise this threshold to 85 percent.’ But I saw the reason why the legislature was pursuing it, they fell short, the city of Chicago has home rule authority to do it, and I thought as a policymaker, that was the responsible way to go.