South Works plan floated

Rap­per Com­mon, de­vel­op­ers en­vi­sion­ing movie stu­dio cam­pus as part of U.S. Steel re­de­vel­op­ment

Chicago Tribune (Sunday) - - BUSINESS - By John Byrne and Ryan Ori

Chicago rap­per Com­mon and a group of real es­tate de­vel­op­ers are draw­ing up plans to con­vert the mas­sive for­mer U.S. Steel plant on the city’s south lake­front into a sprawl­ing movie pro­duc­tion cam­pus along­side live en­ter­tain­ment venues, sports fa­cil­i­ties, ho­tels, homes and shops.

The au­da­cious 415-acre plan is po­ten­tially trans­for­ma­tional for the jobs-starved area around the site on Chicago’s south­east side, but it’s still a long way from be­com­ing re­al­ity.

New plans for the South Works site, a prop­erty that has vexed pre­vi­ous de­vel­op­ers, are emerg­ing as the city also con­sid­ers it as a po­ten­tial lo­ca­tion for a casino.

The mostly Los An­ge­les-based devel­op­ment group does not have a con­tract to buy the South Works site, ac­cord­ing to peo­ple fa­mil­iar with the deal, and the de­vel­op­ers are still talk­ing to po­ten­tial in­vestors. The group also would need zon­ing ap­proval from the city.

Ald. Su­san Sad­lowski Garza, whose 10th ward is one of two that the site lies in, said Fri­day she hasn’t talked with the de­vel­op­ers re­cently.

Sad­lowski Garza said she talked to rep­re­sen­ta­tives of the group “about a year ago,” and said they spoke in gen­eral terms about the plans for the TV and movie stu­dio com­plex. “I was sup­port­ive, yeah,” Sad­lowski Garza said. “I was cau­tiously op­ti­mistic, let’s say. We’ve been down this road be­fore.”

The group’s busi­ness plan in­cludes an ap­prox­i­mately $71 mil­lion cost to ac­quire 415 acres, ac­cord­ing to a book with in­for­ma­tion on the pro­ject be­ing shown to prospec­tive in­vestors.

On a 128-acre, south­east por­tion of the site, the plan en­vi­sions a mas­sive film pro­duc­tion cam­pus, with 15 to 20 sound stages, as well as pro­duc­tion and post-pro­duc­tion

ar­eas.

Stu­dio tours would be of­fered as a tourist attraction, ac­cord­ing to the busi­ness plan.

To the north would be a 56-acre area with live mu­sic, in­clud­ing a the­ater in­cor­po­rat­ing ex­ist­ing ore walls from the for­mer steel plant. It also could in­clude sports and recre­ation such as a climb­ing wall, skate park, sports fields and courts. The plan also could in­clude a golf prac­tice fa­cil­ity and so­cial club af­fil­i­ated with for­mer pro golfer and Greg Nor­man, ac­cord­ing to the in­vestor doc­u­ments.

The plans also in­clude res­i­den­tial build­ings, ho­tels and other re­tail and en­ter­tain­ment con­cepts, such as an out­let mall and a restau­rant dis­trict with a food hall, mul­ti­ple parks and other pub­lic out­door spa­ces.

Sad­lowski Garza said she has dis­cussed the film stu­dio com­plex with the de­vel­op­ers but has not been briefed on the other por­tions of the pro­posal.

The city’s De­part­ment of Plan­ning and Devel­op­ment ex­pects to hold an ini­tial meet­ing with the devel­op­ment team be­fore the end of the sum­mer, said spokesman Peter Straz­z­a­bosco.

Firms in­volved in the plan in­clude Com­mon’s Free­dom Road Pro­duc­tions film com­pany, ac­cord­ing to doc­u­ments ob­tained by the Tri­bune and peo­ple fa­mil­iar with the plan.

Dakota Devel­op­ment, a sub­sidiary of Los An­ge­les­based SBE En­ter­tain­ment Group, also is in­volved. It is owned by en­trepreneur Sam Nazar­ian, whose de­vel­op­ments have in­cluded SLS ho­tels in Bev­erly Hills, South Beach and Las Ve­gas.

Others in the venture in­clude Road­Town En­ter­prises, a Los An­ge­les con­sult­ing and man­age­ment com­pany with ex­pe­ri­ence cre­at­ing film pro­duc­tion stu­dios in other cities and Chicago devel­op­ment firm DL3 Realty, led by Leon Walker.

Also in­volved is the New York-based fam­ily of Mor­ris Nasser, the owner of the Congress Plaza Ho­tel on South Michi­gan Av­enue.

Sev­eral de­vel­op­ers in­volved in the pro­ject did not re­spond to re­quests for com­ment, nor did 7th Ward Ald. Greg Mitchell, whose ward also in­cludes part of the site.

U.S. Steel spokes­woman Meghan Cox de­clined to com­ment on the pro­posal.

“A ro­bust re­de­vel­op­ment of South Works is a goal long shared by our com­pany and the sur­round­ing com­mu­nity,” she said in an email. “We have no up­dates to re­port on the prop­erty at this time.”

It’s un­clear how much the en­tire devel­op­ment would cost, but a mul­ti­phased pro­ject of its size could eas­ily run into the bil­lions of dol­lars.

Pre­vi­ous plans by other de­vel­op­ers have fallen apart in re­cent years be­cause of the sheer size of the site, con­cerns about soil con­tam­i­na­tion and a dearth of pub­lic trans­porta­tion near the prop­erty.

There’s also a new twist. On July 17, Mayor Lori Light­foot named the site as one of five that will be part of an eco­nomic fea­si­bil­ity study as the city eval­u­ates casino lo­ca­tions.

South Works is the only pri­vately owned site among the five lo­ca­tions be­ing stud­ied for a po­ten­tial casino. Pitts­burgh-based U.S. Steel, which closed its plant there in 1992, has been try­ing for years to sell the prop­erty to a de­vel­oper.

Cush­man & Wakefield bro­kers have been mar­ket­ing the site to po­ten­tial buy­ers un­der the name 8080 Lake Shore Drive. The prop­erty runs along Lake Michi­gan be­tween 79th Street and the Calumet River.

Emer­ald Liv­ing was the most re­cent de­vel­oper to draw up am­bi­tious plans for the site, propos­ing up to 20,000 mod­u­lar homes there. But the Irish firm in May 2018 backed off the pro­ject be­cause of con­cerns about soil con­tam­i­na­tion.

Pre­vi­ously, a joint venture of Chicago de­vel­oper McCaf­fery In­ter­ests and U.S. Steel spent 12 years try­ing to kick off a mixe­duse devel­op­ment on the site.

The new­est group brings a mix of star power and devel­op­ment ex­pe­ri­ence to a pro­ject that will re­quire all the oomph it can muster.

Mu­si­cian Com­mon, a Chicago na­tive whose le­gal name is Lon­nie Rashid Lynn Jr., has acted in movies and tele­vi­sion shows, and his Free­dom Road Pro­duc­tions’ projects in­clude the Show­time drama “The Chi.”

Dakota Devel­op­ment is led by for­mer Hy­att Ho­tels ex­ec­u­tive Joe Faust, who was in­volved in Chicago de­vel­op­ments such as the Park Hy­att tower on North Michi­gan Av­enue and the Grand Vic­to­ria Casino in El­gin, ac­cord­ing to the com­pany’s web­site. The owner of Dakota Devel­op­ment’s par­ent com­pany, Nazar­ian, has ex­pe­ri­ence de­vel­op­ing lux­ury ho­tels and in Hol­ly­wood film pro­duc­tion.

Road­Town has de­vel­oped movie stu­dios in other U.S. cities, in­clud­ing one near Atlanta.

DL3 Realty has a track record de­vel­op­ing prop­er­ties on Chicago’s South Side, such as the Whole Foods Mar­ket in En­gle­wood.

The Nasser fam­ily brings deep pock­ets, but also con­tro­versy stem­ming from its long­time own­er­ship of the Congress Plaza Ho­tel. The ho­tel’s own­ers had a con­tentious con­tract dis­pute with Unite Here Lo­cal 1, the union that rep­re­sents clean­ing and main­te­nance work­ers.

The bit­ter, decade-long strike ended in 2013. It was be­lieved to be the long­est ho­tel strike in the world. Be­cause of that, the Nassers’ in­volve­ment in the South Side pro­posal could prove problemati­c for Sad­lowski Garza, who has a strong pro-union back­ground and vot­ing record on the City Coun­cil.

NUCCIO DINUZZO/CHICAGO TRI­BUNE

Chicago-born en­ter­tainer Com­mon is among in­vestors in the mas­sive re­de­vel­op­ment pro­posal.

PHIL VE­LASQUEZ/CHICAGO TRI­BUNE 2017

Some of the ex­ist­ing U.S. Steel South Works struc­tures could be re­pur­posed as part of re­de­vel­op­ment.

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