Related Midwest Tests Housing Demand Near Quantum Project

Related Midwest, the developer of a 128-acre quantum computing campus on Chicago’s South Side, is planning “affordably priced housing” to be built on vacant lots just outside the site.

As the Illinois Quantum & Microelectronics Park, a state-of-the-art research campus located on the 440-acre former U.S. Steel South Works site, received final approval from the City Council in December, Related Midwest was already looking into residential development beyond the park.

“In conjunction with development of 8080 South DuSable Lake Shore Drive, Related will support the creation of new, affordably priced housing on vacant lots in the surrounding neighborhood, in partnership with community organizations,” the company’s vice president of marketing, Tricia Van Horn, said in a statement.

The quantum computing campus is a joint project between Related Midwest, CRG and the University of Illinois. PsiQuantum, a Palo Alto, California-based startup, has already committed $1 billion to the project as the park’s anchor tenant. IBM has also signed on to have a “modular quantum computer” at the site, according to the statement.

The campus will initially create 150 permanent jobs and is set to dwarf the city’s other major developments like Lincoln Yards and The 78, leaving many wondering how it will impact the nearby housing market as the project draws new attention and investment to the area.

Van Horn declined to give further information into plans for residential development. But a local broker said the developer has already begun market research in residential areas neighboring the site.

Carlos Sanchez grew up near the South Works site and, today, he is the owner and managing broker of Bloom/Sanchez Realty. His firm was the top transacting brokerage in the East Side neighborhood, which borders the site to the south, according to public listing data analyzed by The Real Deal.

Being a top broker in the area, Related Midwest reached out to Sanchez a few times to talk about potential plans, he said.

“There’s more empty lots than there are houses,” Sanchez said about the area that Related Midwest was looking into. “They just want to get to know the area and know what the market is, to either be able to build houses, townhouses, single-family homes, multi-units – whatever the demand is.”

Gentrification is a concern in the community. Renewed investment in the area is likely to raise rents and property taxes, and that growth could come at a rate that outpaces wage growth among local residents if they are not also able to benefit from the money flowing into their neighborhoods.

Sanchez, whose uncle worked at the site when it was still owned by U.S. Steel, said the area’s economy has collapsed since then and could benefit from economic revitalization.

Advocate Health Care is building a $300 million, 53-bed hospital on 23 acres of land on the north side of the site — a hospital that the community greatly needs, Sanchez said.

“People are afraid of gentrification, that they’re going to get pushed out with the taxes. But again, there’s nothing that’s happened there in 50 years,” Sanchez said. “There’s no job hubs like U.S. Steel was back in the ’70s and ’80s.”

Still, community groups are concerned about displacement and about whether the new jobs will actually end up being filled by local residents.

Organizer Moises Moreno, who lives on the South Side, helped circulate a petition calling for a community benefits agreement with Related Midwest and the city, to secure certain protections and benefits for communities impacted by the project. By the time the City Council granted final approval to the development in its December meeting, 356 residents of communities like East Side and South Chicago had signed the petition, Moreno said in a public comment at the meeting.

Residents’ demands include “protecting the environment and our health, guaranteeing jobs and education pipelines for local residents, including 10th Ward and 7th Ward residents,” Moreno said. “We want paid internships for high school students. We want pathways to careers for local residents and job training and development without displacement, like offering tax relief for homeowners and long-time residents.”

The community benefits agreement also asks that developers ensure access to and preservation of affordable housing and nearby green space.

Finally, the agreement asks for a study to understand the full environmental impact of the quantum computing site — such as the use of vast amounts of water for cooling — and to look into whether environmental remediation is needed after U.S. Steel and other heavy industries operated in the area, Moreno said.