United Center Redevelopment Could Reignite an Old Turf War

If the United Center’s upcoming $7 billion redevelopment lives up to the hype, it will transform the hockey and basketball arena’s surrounding sea of parking lots into a vibrant mixed-use district and spur growth in the neighborhoods it borders.

But even as the decade-long megaproject prepares to break ground this summer, one area north of the sports complex could remain virtually untouched if industrial landlords maintain their influence at City Hall.

The Kinzie Corridor Planned Manufacturing District directly north of the United Center puts strict zoning limits on non-industrial development. And while some commercial real estate players speculate that the area could become an extension of the buzzy Fulton Market neighborhood, current industrial landlords are protective over a slice of the city that they deem a crucial hub for blue collar jobs.

United Center Redevelopment Could Reignite an Old Turf War — The Kinzie Corridor Planned Manufacturing District

“We’re anchoring hundreds of manufacturing jobs that are in the Kinzie corridor,” said Haven Allen, founder of a manufacturing incubator in the corridor called mHUB. “Disaggregating them or putting housing within them is really like a threat of knocking all those employers out of the city. We need jobs here, not just towers.”

So far, the ward’s alderman seems to agree.

“We’ve always made the decision of not changing zoning at the expense of another property. We have to stay balanced until people are ready to move on. We’re not at that point yet,” Alderman Walter Burnett Jr. said.

Businesses in the area include a Rivian service center, a cotton thread maker, a plastic moulding service, a recycling center and a storage warehouse for rental bike service, Divvy Bikes, among others.

The corridor is bordered by Lake Street to the south and Ferdinand Street to the North, just shy of reaching Grand Avenue. Its western edge ends at a railyard along North Sacramento Boulevard and the eastern border ends at Ogden Avenue.

It was last amended in 2019 to relax restrictions on its furthest east end within the district. Scaling back the restrictions helped accelerate the outgrowth of the booming meatpacking district-turned mixed-use hot spot, Fulton Market.

But in recent weeks, local developer and self-proclaimed “King of the West Loop,” Phil Denny, has been making his case reducing restrictions in the Kinzie Corridor even further. In the process, he reignited a friendly rivalry with mHUB’s Allen.

Denny argues the city should ease the zoning of the district along Lake Street, where he owns several properties. Doing so, he says, would allow the northern side of the street to benefit from the United Center’s influence just as much as the southern side of the street, which is free of the corridor’s restrictive zoning.

“Now is the time to have this discussion, to make that change and then let a degree of organic progress occur along both sides of the street,” he said.

And even some industrial brokers agree that making adjustments to accommodate growth from the United Center could be beneficial.

“There’s a balance between flexibility and oversight,” said Colliers industrial broker Mike Senner. “I don’t think there should be wholesale changes, but well-thought out unique applications allowed there instead.”

Meanwhile, industrial landlords fear that developers will take a mile if given an inch, and city planners agreed that the corridor would not be amended again for at least a decade. Burnett called its newer eastern boundary “a hard line to protect industrial businesses to the west.”

“[The city] is not going to get into this incrementalism that I think some landowners would like,” Allen said. “They want to create certainty in the market so that people can make long term investments and we can attract businesses here to Chicago.”

In a series of social media posts, Denny created AI-generated images of a bustling mixed-use district bordered by a fortress-like row of dilapidated warehouses. In one illustration, a trio of smiling cartoon dumpsters is captioned, “‘Do you think they would ever let us in to watch a [Chicago] Bulls game? We live so close.’”

The cheeky images may be a gimmick for now, but Denny is serious about drumming up support for a change to the Kinzie Corridor’s southern border. His campaign drew hundreds of reactions from local brokers, developers and curious LinkedIn onlookers.

“My hope was to share these kind of silly little posts on LinkedIn, and maybe find someone who’s part of that development team … And maybe people that are better connected politically than I am to sort of take it from here,” Denny said.

Denny himself is no stranger to City Hall but admits his political capital may be running dry. When the corridor was revised in 2019, the major north to south throughway of Ashland Avenue was proposed as a new border within the district between relaxed regulations to the east and stricter zoning to the west.

During those discussions, Denny successfully lobbied to have the zoning regulations relaxed within the district an additional block west to Paulina Street to ensure both sides of Ashland would have the same zoning. He said the awkward juxtaposition along Ashland would have dissuaded mixed-use development. And he sees the same problem along Lake Street now.

“I fought long and hard. And by that, I mean I completely annoyed [zoning administrator] Patrick Murphy … for almost a year,” he said with a laugh.

More recently, Denny agreed to house an influx of migrants in two of his West Loop warehouse properties. Contracts revealed Denny was accepting $640,000 per month in rent from the city for his two buildings, exceeding the typical rent for such properties. The ensuing press scrutiny landed his political relationships in hot water and put a spotlight on he and his company’s $20,550 in political donations to Burnett.

Both Denny and Allen have benefitted from relationships with local officials and for now, it seems Allen’s cohort of industrial players still has the upper hand.

In a show of support for manufacturing jobs, the city and state contributed $27 million towards Allen’s $32.5 million purchase of 240 North Ashland Avenue, where he now runs mHUB. The seller? Phil Denny.

Even though the sale was a boon for Denny, the West Loop real estate player is hoping the city’s commitment to preserving manufacturing use in the area will soften over time.

He has assembled a portfolio of 11 properties within the corridor totaling nearly 250,000 square feet in hopes that its boundaries will shrink eventually.

A similar bet paid off for him in Fulton Market where he was an early investor and in 2022 sold one lot for $10.3 million. He had bought the land for $4.5 million in 2016. Now, Denny’s confident that it’s only a matter of time before his strategy works again, pointing to a list of over two dozen businesses that have already left the Kinzie area.

“I hate to break your heart, but those companies that you think are alive and well in your (planned manufacturing district) are long gone,” Denny said, recalling a conversation with Murphy, the zoning administrator.

Developers buying properties and leaving them nearly empty for speculative purposes, however, is exactly why the corridor needs to be protected in the first place, Allen said.

“The Phil Denny’s of the world, I’m sure would love it, but they’re just gonna have to hold on a little longer,” he said.