Related Midwest Takes Steps on 78

Curt Bailey’s Related Midwest is moving ahead with its riverfront megadevelopment known as The 78 even if the University of Illinois has trimmed its vision for the facility that will anchor the site.

Bailey can count on the city to make up some ground, too, after getting an assurance of help from public coffers made by Chicago Mayor Lori Lightfoot at Friday’s press conference revealing the university’s updated design.

Potential subsidies and tax increment financing are being negotiated with the city, and Lightfoot leaned into the deal in front of the crowd of several dozen made up of equal parts from the real estate community, academia and the political world.

“We’ve made a commitment that we want to make sure The 78 neighborhood is developed,” Lightfoot said.

Its first phase is set to add 3 million square feet of buildings on an empty tract of land that, once developed, would aim to connect the South Loop and Chinatown areas and become Chicago’s 78th distinct neighborhood — hence its name. The tie to the University of Illinois will be complemented by having the campus of the system’s Chicago branch nearly next door.

Infrastructure work to relocate railroad tracks could receive financial chip-ins from public entities to facilitate Related Midwest’s plans, which are advancing toward construction work with a smaller vision for the University of Illinois’ Discovery Partners Institute. The institute — which will function as the state school’s bridge between academic and public efforts to finance and innovate research and development efforts with the capacity to spin new technology and other assets into the business world — has new plans that eliminate a basement from earlier designs. The redesign cuts the project from the 261,000 square feet originally planned to 200,000 square feet, and trims $80 million in costs. Earlier this year its stated costs were $250 million, and it’s unclear whether that’s the new price tag or if the new design cuts it from there.

It’s an important step forward for Related Midwest, which previously decided to revise its plans for the 78 site to make it the basis of a bid for the city’s first casino license. That effort ultimately proved unsuccessful, as Bally’s got the nod from the city to pursue a $1.6 billion entertainment campus with gambling on a River West site.

Bailey has turned Related Midwest back to its prior plan, and now wants to quickly launch work on four other buildings around the site of the Discovery Partners Institute at a cost of $400 million.

At Friday’s event, he mentioned a brewery as part of a university gathering center on the eastern portion of the Discovery Partners Institute campus.

Related Midwest also is planning a wet lab building for potential life sciences uses that count the University of Illinois as a tenant, and another building to serve as an incubator for startups in the early aughts of filling out the vacant stretch of riverside real estate. He hopes to start construction on those aspects of the development site around the same time the Discovery Partners Institute is slated to break ground in 2024, with completion targeted for 2026.

“We see a vision now forward, which is a terrific place for us to be,” Bailey said.

Lightfoot touted the step forward as progress toward Chicago’s goal of closing the gap with the nation’s leaders such as Boston and San Diego in building and filling real estate with life sciences labs and research centers with both the backing of higher education facilities and private sector capital.

“DPI will transform our economy and the prospects of the people who rely on it,” University of Illinois President Tim Killeen said.

Related in May transferred title to the university for a portion of the property in The 78 to move forward on the academic system’s part of the development.