Always a risk, One Central project is now a tougher sell
Bob Dunn, the developer behind the One Central project proposed near Soldier Field, is no rookie in real estate. He knew, as soon as his plan came to the forefront in 2019, that his massively scaled clutch of nine high-rises over Metra tracks near the lake would be a decadeslong venture.
The economy would surge and contract over that time, casting waves over the project the way the tides shape the beaches. Even as he sketched out his $20 billion vision and acquired state backing for it in a minor legislative miracle, future change in the plan was always implied. His goal was to get things started and make sure others got accustomed to big ideas for his property. It could only help his investment.
But Dunn, president of Landmark Development, couldn’t have imagined that his project would have severe challenges before it even gets started. As time has passed, questions about it have gotten louder. Editorial boards criticized it for its reliance on a state pledge to back a transit hub with perhaps $6.5 billion over 20 years, a public works flourish that will help Dunn populate those future highrise homes. It’s like tax increment financing, only it comes from the state and not the city and it relies on growth in sales taxes, not property taxes, to pay off the debt.
Of all the questions surrounding One Central, three are pressing.
Is the governor of Illinois still on board?
Springfield experts have suggested Gov. J.B. Pritzker has buyer’s remorse over backing the transit hub. A statement from his spokeswoman Emily Bittner made it clear. “With the pandemic’s economic turmoil upending state budgets around the country, it would be a challenge for any state to provide the significant amount this developer is seeking,” Bittner said.
So this deal is not a priority, even though the budget bill that allowed the public-private partnership doesn’t foresee any state spending until fiscal 2024, at the earliest. Dunn could be without his ground-floor financial partner.
Will City Hall agree to the zoning?
Mayor Lori Lightfoot ran on a get-tough-on-developers platform, and One Central will test her. Other megadeals in the city, Lincoln Yards and The 78, were approved before she was sworn in. She didn’t like how Dunn slid his project into the state budget, calling it a “sleight of hand.” State Rep. Kam Buckner, D-Chicago, whose district includes the site, said he’s been hearing from constituents opposed to the project. He said he, too, was angry that it was “rammed through without real conversations with us” who represent the area. “I’m not anti-development, but this has to make sense,” Buckner said.
Ald. Pat Dowell (3rd) will have crucial say in the zoning. She said she’s reserving judgment for now, but opinions registered at her office are mostly against One Central. Dowell said the workability of the transit hub is key. “Then there’s the buildings’ density, design and height, but all of that to me is secondary,” she said.
Is that transit hub feasible?
“The developer has not shared a transit study with the state that would demonstrate the need for a transit hub,” a state official said. City officials in February asked Dunn for the data, including whether his planned connection for Metra, Amtrak and the CTA would work if zoning won’t give him the 9,050 residences he wants. The planning department said there has been no response. A spokesman for Dunn said a study will be submitted in a few weeks.
Chicago now has businesses that board up preemptively when the news suggests trouble. It’s scaring off people from living in or near downtown, especially if the pandemic has caused a permanent loss of restaurants and other favored haunts. Last week, the Regional Transportation Authority put out a survey that said 20% of transit users pre-pandemic might never return.
Dunn eventually might have to flip his project around and deck over the Metra tracks to get a couple of buildings and prove people want to live there, then try the transit hub. He might have to settle for a more modest development.
It would be wrong, though, to say he can’t pull it off. His spot is a logical place for the city to grow and developers here have long since mastered the art of building over train yards. Towers in the East and West Loop have sprouted from that innovation known as “air rights.”
If Dunn can’t do it, someone else will in time. The profit hunt outlasts any state or city administration.