Chicago Approves $30 Million for IBT Group Life-Sciences Hub

A biotech reboot is coming for one of the city’s oldest industrial corridors.

The city approved more than $30 million in tax increment financing for IBT Group’s long-gestating plan to redevelop a 6.5-acre site in McKinley Park’s Central Manufacturing District, McKinley Park News reported.

The mixed-use redevelopment, one of the Southwest Side’s most ambitious life science and mixed-use projects in recent memory, centers on a historic 575,000-square-foot warehouse at 1769 West Pershing Road. Plans call for converting the lower floors into 230,000 square feet of office and laboratory space and adding 172 residential units on the upper levels, with 20 percent set aside as affordable housing. A rooftop garden and amenities are also in the works.

IBT plans to demolish a vehicle shed next door to the warehouse and replace it with a 42,000-square-foot retail center with a parking lot.

Originally pitched as a $121 million project, costs have ballooned to $186 million. The funding stack includes $22 million in developer equity, $93 million in senior debt, $16 million in C-PACE financing, $23 million in federal historic tax credits and the $30 million in city TIF funds.

The TIF developer designation, approved by the city’s Community Development Commission on Tuesday, authorizes the city to negotiate a land sale and redevelopment agreement with IBT’s entity, Pershing 1769 LLC. IBT has tapped Epstein for architecture, Arco Construction as general contractor and PGIM as the senior lender.

The life science component would offer a rare South Side alternative to Fulton Market and the Near West Side for life-science real estate and loft-office space.

IBT’s project was selected in 2023 after a competitive RFP process. Letters of support from Alderwoman Julia Ramirez and the McKinley Park Development Council favored the plan’s blend of commercial, housing and historic reuse.

With design and financing in place, IBT’s next hurdle is execution in delivering a project many see as a test case for decentralized life-science growth in the city. City officials say the project could be catalytic for the Southwest Side. Still, questions remain about absorption for speculative lab space in a high-interest-rate environment.

— Judah Duke