Loop Aldermen Defend Office Conversions as Johnson Eyes TIF

As Mayor Brandon Johnson looks to a record high tax-increment financing surplus of $434 million to plug Chicago budget holes, Loop aldermen fear he will weigh on former Mayor Lori Lightfoot’s LaSalle Street Reimagined initiative slated to turn outdated offices into housing.

Aldermen Bill Conway of the 34th Ward and Brendan Reilly of the 42nd raised concerns that Johnson’s strategy will deprive developers of the public funds they need to revitalize LaSalle Street and its surroundings by converting vacant office space into residences, the Chicago Sun-Times reported.

Conway and Reilly questioned acting Planning and Development Commissioner Patrick Murphey about the city’s commitment to supporting development teams involved in the LaSalle Street Reimagined plan, which include bigtime players Quintin Primo, Mike Reschke, John O’Donnell’s Riverside Investment and Development and others.

To honor previous commitments, TIF subsidies would need to cover $307 million total for five development teams, which have promised to make 30 percent of the resulting residential units in their office conversion projects affordable in exchange for the funding. Reilly estimated that $180 million of the surplus would be diverted from TIF districts, potentially leaving LaSalle Street development plans with inadequate funds.

Murphey reassured Reilly, emphasizing that the city would not obligate project applicants if it couldn’t fulfill its financial partnership promises. He also noted that construction for LaSalle Street projects might not begin within the next 12 months.

Conway, echoing similar concerns, claimed that his local TIF would be left with $6.5 million after Johnson’s planned draw on the surplus is implemented, which could delay projects until 2025 and affect over 1,000 units, including affordable housing, the outlet reported.

Mayor Johnson’s plan to use the $434 million TIF surplus has faced resistance from the business community, as he seeks to invest $1 billion in the city while increasing other taxes by $800 million to avoid property tax hikes.

Office-to-residential proposals for 105 West Adams Street and 30 North LaSalle represent a total investment of $320 million, with 600 housing units, nearly half of which are designated as affordable.

These projects, along with three others at 135 and 208 South La Salle and 111 West Monroe Street, were given preliminary approval in March 2022. Collectively, the developers behind them are striving to create more than 1,600 housing units and bring more than $870 million in private investment to revamp the LaSalle Street corridor.

— Quinn Donoghue