The 78 is still on track to be the next neighborhood in Chicago!
I will discuss the latest updates about the 78, the next community area in Chicago. We previously discussed this seven-billion mixed-use mega-development along the South Branch of the Chicago River in the Near South Side community area. The project will include up to 13 million square feet of new commercial, residential and institutional construction, 12 acres of open space, multiple infrastructure improvements including a new Red Line subway station at 15th Street, and a 20 percent affordable housing commitment for up to 10,000 residential units.
Here's what happened in the 78 so far in the two past years:
The 78 will move from the 25th Ward to the 3rd
In May 2022, the new ward map for Chicago was approved with a 43-7 council vote, repositioning power centers for the next ten years. This significant change means many Chicagoans will find themselves residing in different wards. The new map reflects the 2020 census demographic changes, showing a 10% decrease in the Black population, a 5% increase in the Latino population, and a 30% surge in the Asian American population.
For the first time, Chicago will have a majority Asian-American ward, highlighting the growing Asian population. Additionally, the number of Latino-majority wards has increased to 14, reflecting the demographic shifts within the city. However, the approval process was contentious, with accusations of backroom deals and dissatisfaction from the Latino Caucus.
The new ward map could face legal challenges for potentially violating standards of compactness, contiguity, and fair representation under the Voting Rights Act. Such lawsuits could be costly for the city. The City government asserts that the new map aims to ensure nearly equal population distribution across wards, reflecting the city's diverse demographics and potentially shifting political dynamics within the City Council.
In the new ward map, the Near South Side ward, represented by Alderman Pat Dowell, includes mega-development One Central and sees the 78 move from the 25th Ward to the 3rd. These changes aim to address the evolving needs and representation of Chicago's communities.
The University of Illinois’ Discovery Partners Institute progress
The next crucial progress in the 78 is the University of Illinois’ Discovery Partners Institute (DPI) anchoring the project. DPI Executive Director Bill Jackson said that they would proceed with the $250 million headquarters building spanning 261,000 square feet with classrooms, lab space, and offices.
In 2022, Related Midwest transferred one acre within its "78" megadevelopment to the University of Illinois. With $250 million secured for the initial structure, DPI has the right to claim about three additional acres for future phases of development.
The DPI will also house a Defense Innovation Unit (DIU) office, enhancing defense innovation efforts. The DIU office in Chicago aims to identify solutions, companies, and talent across the Midwest to address national security challenges and expedite Department of Defense (DoD) contracts. This office will be shared with various defense innovation groups, including the National Security Innovation Network and the Army Research Laboratory.
Deputy Secretary of Defense Kathleen Hicks emphasized the importance of American innovation in strengthening supply lines and leveraging the workforce. The Chicago DIU office, part of a broader regional strategy, aims to accelerate the adoption of emerging technologies and expand the base of military suppliers.
Chicago will be the fifth DIU office, joining locations in Mountain View, CA; Boston, MA; Austin, TX; and Washington, DC. DIU plans to use a team of full- and part-time reservists and government partners to reach companies and talent across 12 Midwest states.
DPI's strategic partnerships span domestic and international collaborations, including global tech companies supporting community education programs and blue-chip employers in Illinois benefiting from its workforce program for software apprentices. DPI’s business building unit has seen new ventures emerge, while its applied R&D unit has fostered new research partnerships. DPI has also expanded its international collaborations with leading universities worldwide, securing tens of millions in research funding for projects ranging from wastewater analysis to clean energy and equitable transit solutions.
In 2023, the Chicago Plan Commission reviewed the final design for DPI's headquarters at the 78. The project, addressed at 1519 S. Wells St, is overseen by the Illinois Capital Development Board and funded by the state.
The building's floors are divided into three neighborhoods: innovation, experimental, and instructional. An atrium, designed as an active collision zone with flexible collaboration spaces, will be the centerpiece. Floating meeting rooms and connecting stairs will enhance interaction opportunities.
The ground floor will be open and public, with entry plazas, a cafe, multipurpose rooms, and a 100-person auditorium for community events and career fairs. The building aims to achieve LEED Gold certification, with features like bird protection, construction waste diversion, and workforce development. Bike parking, showers, and changing rooms will be available, but there will be no on-site car parking.
More funding through a TIF in Chicago
After the 78's Rivers Casino lost out to Bally’s Casino in the approval process for Chicago's first casino, Related Midwest negotiated with the city government to raise additional funding. Without the casino, the 78 won't collect property taxes, which are crucial for repaying the company for infrastructure expenses. Related Midwest President Curt Bailey is discussing with the city the possibility of advancing funds, which would later be reimbursed by property taxes from future development.
Related Midwest aims to work with the city to secure the infrastructure needed for the Discovery Partners Institute (DPI) and other facilities in the innovation center.
Chicago uses Tax Increment Financing (TIF) to encourage investment throughout the city. With 132 TIF districts generating over $1 billion this year, funds are typically used alongside private development projects to build and repair infrastructure, clean up polluted land, and repurpose vacant properties.
In 2024, there are also many exciting updates on the 78!
2024 updates of the 78
Wells-Wentworth Connector underway
The Chicago Department of Transportation (CDOT) has completed the first two phases of the Wells-Wentworth Connector, with the final phase expected to be finished in 2024. This project aims to link Chinatown with the upcoming 78 megadevelopment and the South Loop.
Since 2019, the city has been constructing this new road, which has involved straightening the high-crash intersection of Cermak and Wentworth avenues and adding a new crosswalk and plaza. The three-lane street will feature mixed-traffic, turn, and parking lanes, as well as raised bike lanes.
The raised bike lanes will be protected on both sides by a landscaped parkway, providing physical separation between vehicle traffic and pedestrians. These bikeways are designed to be low-stress and comfortable for riders of all confidence levels.
Additionally, the new street will include raised crosswalks to enhance safety for pedestrians and cyclists accessing Ping Tom Park and other nearby destinations. Although the road and bikeways have been ready for roughly a year, they remain barricaded.
78 could be the new home of the White Sox
The White Sox are negotiating with Related Midwest and the government for a new stadium. This ballpark would anchor a mixed-use development featuring residential and retail properties, with hotels, restaurants, and bars on the lower floors of high-rise buildings. The plan includes remodeling Guaranteed Rate Field for the MLS’ Chicago Fire Football Club and repurposing some of the surrounding parking into a walkable urban grid with new housing.
The White Sox are expected to seek about $1 billion in public financing for the project. Team chairman Jerry Reinsdorf has traveled to the Illinois capital to explore financing options, as the team’s lease on Guaranteed Rate Field expires in 2029. The White Sox stated they are excited about the project's potential economic impact and are engaging with legislative leaders to discuss their vision.
Chicago Mayor Brandon Johnson and other city officials support the stadium relocation, with Johnson showing more receptivity to using tax revenue for new stadiums than state officials. Alderwoman Pat Dowell has also met with developers to discuss the impact of a new ballpark on the South Loop, raising concerns about security, noise pollution, and quality of life in the community.
The "Project Impact" report of the White Sox stadium plans projects significant benefits for Chicago, including 5 million annual visitors, a $9 billion investment, a $4 billion stabilized annual economic impact, 32,000 jobs, 1,000 affordable housing units, $200 million in annual tax revenue, over 10 acres of community space, and 1,300 residential units.
The Chicago Federation of Labor (CFL), led by President Bob Reiter, has endorsed the proposal for the new stadium at The 78. The CFL supports the project's potential to transform vacant land and generate substantial economic benefits, including 10,000 construction jobs and 22,000 permanent jobs.
The proposed stadium at The 78, near Roosevelt Road and Clark Street, would serve as a cornerstone for the 62-acre development, which will include residential, commercial, and academic spaces, such as the Discovery Partners Institute. The project aims to revitalize the area and enhance connectivity between downtown and Chinatown. The endorsement from the CFL is crucial, as union support is often pivotal for large-scale developments in Chicago.
DPI kicking off construction bids
The University of Illinois System’s Discovery Partners Institute (DPI) is moving closer to its permanent home with the Illinois Capital Development Board now accepting bids for its new headquarters at The 78 megadevelopment in Chicago. This $285 million project, part of the Illinois Innovation Network, marks a significant advancement for DPI, which aims to foster research and education. The state has allocated $235 million for this facility, with a groundbreaking ceremony planned for later this year.
The new eight-story DPI building, designed to connect with surrounding communities, the adjacent riverfront, and future development phases, is expected to achieve LEED Gold certification upon its opening in 2027. Interested contractors can attend a pre-bid Q&A session to learn about project specifics and submission requirements, underscoring the project's readiness to begin construction.
Chicago Mayor Brandon Johnson overhauled TIF program
Mayor Brandon Johnson's administration has recently approved a broader overhaul of the city's TIF program, which will impact several areas including The 78. It aims to boost affordable housing and economic development across the city. The plan involves borrowing $250 million annually over five years, to be repaid with funds from expiring TIF districts. This initiative aligns with the city's goals to enhance economic opportunities and housing affordability.
Approved by City Council in April 2024 with a 32-17 vote, the ordinance faced controversy and last-minute adjustments. Chicago has 121 TIF districts, with 45 set to expire by the end of 2027. The funds returned from these expiring districts are expected to cover the debt and allow for further community investments. The proposal's principal and interest costs are estimated at $2.4 billion over 37 years, fully covered by the expiring TIF funds.
The funds will be split between the Department of Housing and the Department of Planning and Development. The Department of Housing will allocate $360-390 million for affordable rental homes, $210-240 million for homeownership, and $20-30 million for single-room occupancy structures. The Department of Planning and Development will use $400-500 million for neighborhood development grants, $82.5-115 million for small business support, and $57.5-90 million for jobs and workforce training.
Conclusion
The 78, Chicago's groundbreaking 62-acre mixed-use development, continues to make strides toward becoming a vibrant new neighborhood. With the Discovery Partners Institute (DPI) breaking ground later this year, this project promises to be a hub for innovation, research, and collaboration. The completion of the Wells-Wentworth Connector will significantly enhance connectivity between the Loop and Chinatown, supporting the influx of residents and businesses. The project, which includes a mix of residential, commercial, and cultural spaces, is set to generate over $9 billion in economic activity and create thousands of jobs, fostering a dynamic and inclusive community that reflects Chicago's forward-thinking spirit.
All things said, the 78 is on track to be Chicago’s next great community. This will fill in the gap in Chicago’s overall layout. There are a lot of exciting opportunities for this real estate development.
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