The City Council’s Finance Committee Monday authorized a combined $65 million in city subsidies to help transform two more La Salle Street office buildings to residential use amid concern about minority participation on those projects.
“I’m not against what’s happening. I’m just against the brothers not getting a cut,” said Budget Committee Chair Jason Ervin (28th). “This is a downtown project, but Black folks go downtown too. We want to make sure we participate… If you want to hang me for … making sure that Black folks participate, go ahead. I’m OK with that.”
At 111 W. Monroe, Prime Group and Capri plan to create 345 residential units — with 105 earmarked as affordable housing — with help from a $40 million in tax-increment financing subsidy and up to $40 million in multi-family revenue bonds.
The $202.8 million project will cover 14 floors within a pair of adjacent buildings, including a high-rise built in 1911.
At 208 S. La Salle, Prime Group plans to convert four floors into 226 apartments, 68 of them affordable, with help from $26.2 million in TIF assistance and $25 million in multifamily revenue bonds.
The Finance Committee authorized the twin subsidies from the cash-rich Central Loop TIF, advancing the “La Salle Street Re-Imagined” project conceived by former Mayor Lori Lightfoot and embraced by Mayor Brandon Johnson.
But Finance Chair Pat Dowell (3rd) said neither one of the deals would be brought to the City Council floor until Prime Group CEO Michael Reschke reassures the Black Caucus of his commitment to a minimum of 26% minority participation on the projects, with another 6% share earmarked for companies controlled by women.
Specifically, Dowell wants the following information:
- The level of minority participation associated with the $3 million Prime Group has already spent on architectural and engineering work at 111 W. Monroe. Reschke openly acknowledged that most of the contracts that will be awarded to African Americans, Hispanics, Asian Americans and women will be on the construction side.
- Minority and women participation on the Reschke-led project to convert the Thompson Center into a new Google headquarters.
- A sampling of Prime Group’s minority participation performance on past projects that illustrate Reschke’s “commitment to diversity.”
If Reschke can provide those specifics by Wednesday, the City Council will take a final vote on the projects. If not, the subsidies would have to wait.
Zoning Committee Chair Walter Burnett (27th) said he has worked with Reschke for years on projects in his booming Fulton Market District and knows him to be a “very inclusive developer.”
“Coincidentally, he’s doing the State of Illinois Building and he has a Black partner,” Burnett said.
Reschke pointed to his 40-year “passion for inclusivity” on his development projects. And he stressed that the TIF subsidies are contingent on his meeting the minimum city set-aside requirements.
“I’m surprised that they would question our team about our ability to meet these goals,” Reschke told the Finance Committee. “We’re committed to meet these goals — and we will.”
But Reschke said he “cannot identify specific MBE, WBE or veteran” contractors until he starts awarding contracts that have “all of the approvals.”
“That’s when we go to the market and bid the project, review and scope all the bids, and then make decisions on what awards to make to what contractors. That probably won’t be for at least 60, 75 days from today — until we actually would have a list of the early awards,” Reschke said, adding that he is still awarding contracts on the Google project.
Downtown Ald. Brendan Reilly (42nd) said the Central Business District has been “sucking wind” with a “collapsing tax base” and “obsolete” office buildings “built as fortresses a century ago.” To convert those buildings to residential use takes city help.
“Class A buildings have been eating the lunch of these dated structures built with many feet thick concrete walls to prevent people from robbing banks,” Reilly said.
“These projects are more expensive because we’re trying to provide affordable housing closer to where people are employed. We can’t afford to have all of these buildings on La Salle Street sit fallow. That will be the slow death of the Central Business District.”
Downtown Ald. Bill Conway (34th) noted that “every city in the world” has been forced to rethink its central business district.
The twin projects are “especially well-timed” on the heels of the Google project that will “create thousands of jobs nearby.”