Two more office-to-residential proposals are under consideration for public backing in Chicago’s onetime financial corridor in what outgoing Mayor Lori Lightfoot says could become the largest affordable residential housing conversion project in the nation.
Lightfoot’s office on Friday announced that proposals for older office towers at 105 W. Adams St. and 30 N. LaSalle St. were advancing to the next stage of a city review process to be considered for tax increment financing dollars.
Those projects join three previously that the city in March announced as finalists for public-backed building overhauls. Proposals submitted to the city under the initiative were required to have at least 30% of the units with affordable rents.
If all five projects were to gain city approval and come to fruition, it would create more than 1,600 new apartments combined, with more than 600 of the units affordable, the announcement said.
Chicago’s efforts are expanding as cities throughout the country explore ways to cut down the amount of older, unwanted workspace while also addressing a nationwide shortage of below-market-rate housing.
With the new projects advancing in the city review process, LaSalle Street Reimagined is the largest such initiative unveiled in the United States, according to the statement, which said it has the potential to reduce upper-floor commercial vacancies along the LaSalle corridor by almost 50%.
Lightfoot’s statement comes just 10 days before progressive Brandon Johnson is set to be sworn in as the city’s new mayor, and it’s unclear whether the LaSalle initiative will come to fruition with Lightfoot no longer in office to champion the initiative she first launched last fall.
“As LaSalle Street continues to evolve as one of the most distinguished and storied corridors in the Midwest, these conversions reaffirm the city’s support for innovative projects and improvements that reinforce its economic vitality for all Chicagoans,” Lightfoot said in the statement.
In addition to withstanding a regime change, the five proposals also must win support from the Community Development Commission and eventually the City Council. First, the city says the projects will undergo an extensive underwriting process by the planning and housing departments.
Although the projects would be backed by significant public dollars, the developers also still would need to line up financing at a time of rising interest rates and bank failures that have slowed the pace of real estate deals throughout the country.
Office leasing and fiscal challenges are leading landlords to consider other new uses in traditional office buildings, including vertical farming.
Friday’s statement did not say how much TIF funding the two newly advanced projects are seeking. The other three projects are asking for a combined $188 million in city assistance to offset steep costs of building conversions.
In the proposed conversion of the 41-story tower at 105 W. Adams, Chicago firms Celadon Partners and Blackwood Group propose creating 247 apartments, including 185 units with affordable rents. The cost of the Clark-Adams Building conversion would be $178 million, according to the city.
In the 43-story at 30 N. LaSalle, Chicago developer Golub & Co. and American General Life Insurance propose a 349-unit conversion to apartments, 105 of which would have affordable rents.