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Illinois extends bid for 1M-sf Thompson Center, suggesting lack of interest from prospective bidders
Interest may be waning in massive state-owned building in prime Loop area as pandemic persists
Illinois extended the bidding deadline for the sale of Chicago’s James R. Thompson Center after prospective buyers asked for more time to develop their proposals.
The Illinois Department of Central Management Services confirmed that it has “adjusted the deadline for Request for Proposal submissions for the sale of the James R. Thompson Center to October 8, 2021.”
The statement released by the CMS said “several vendors interested in responding to the RFP have requested additional time to develop their proposals to reflect a number of positive developments that will impact pricing.’’ Those include a zoning change passed by the City Council, a memorandum of understanding with the Chicago Transit Authority, and a memorandum of agreement with the Illinois Department of Natural Resources.
The state’s plans to complete the sale by April 2022 remain unchanged.
“The speculation I am hearing within the real estate circles is that due to a very bad office, hotel market in the Loop, it is possible that the state is not getting the number of proposals they want or the price point they want,” said Lisa DiChiera, director of advocacy at preservation group Landmarks Illinois.
Aside from the pandemic factor, maintaining the Clark/Lake CTA station and working out the existing retail lease are also issues interested buyers and developers will have to figure out. This means potentially buying Chicago’s Marc Realty Capital and Boston-based Winthrop Realty Trust out of their retail lease, which expires in 2034.
The Chicago City Council in May approved a new zoning ordinance to upzone the center, potentially clearing the way to build a skyscraper. The Historic Preservation Office, part of the Illinois Department of Natural Resources, also signed a memorandum of agreement in June that the Thompson Center should not be considered a “historic resource.”
Illinois governor J.B. Pritzker put the 1.2-million-square-foot building located in the historic Loop building up for sale in December 2019, saying it was costing the city and taxpayers $17 million every year. Governor Bruce Rauner pushed for the sale during his tenure, predicting it would bring in $300 million.
“Selling the property provides a unique opportunity to maximize taxpayer savings, create thousands of union jobs, generate millions of dollars in real estate taxes to benefit the City of Chicago and spur economic development,” Pritzer said in May.
Preservationists including Landmarks Illinois are calling for reuse and redevelopment of the building.
“We are comfortable with and would be delighted to see a developer come forward, who purchases the building, does what we call a qualified rehabilitation and reuse of the building and utilizes federal credits to do a redevelopment,” said Landmarks Illinois’ DiChiera.
“The center should be sold with a Chicago landmark designation attached to it; that designation could allow for the preservation of the building’s most important features,” said Ward Miller, Preservation Chicago Executive Director.
If the building sells, state employees will move to the Michael A. Bilandic Building across LaSalle street and to other government-owned and government-rented buildings.