State Funding Squeeze Has Many Still Asking Questions About Massive One Central Proposal

Bob Dunn isn’t giving up.

The Landmark Development president is readying a zoning application for a collection of high-rises over the Metra tracks in Chicago’s South Loop even though launching the project depends on the construction of a controversial transit hub critics charge would be too expensive and too dependent on financing from the cash-strapped state government.

According to Dunn, it is precisely what the city needs to keep growing.

Developers like Sterling Bay and Related Midwest are already radically expanding the geographic scope of downtown with their Lincoln Yards and The 78 developments. Other downtown neighborhoods, such as Fulton Market, Lakeshore East and the Central Station development, have kept popping up, both in good times and when the economy fell into recession.

“Chicago has really grown around such megaprojects,” Dunn said.

For those asking whether the coronavirus pandemic and the nation’s current economic troubles cloud prospects for the One Central proposal, Dunn points out the major downtown developments now underway don’t seem to have slowed down. That includes Fulton Market, where after a brief hiccup, developers kept unveiling proposals for new apartment towers throughout the shutdown.

Dunn said there is long-term demand for his $20B One Central, which would add nine high-rises just west of Soldier Field by 2040, including more than 9,000 residential units, 1.4M SF for entertainment and retail tenants, and nearly 10M SF of commercial and mixed-use space. The new transit center would service it all — and the whole downtown — by tying together CTA, Metra and Amtrak lines, along with new trams connecting to the McCormick Convention Center and sites in the Museum Campus.

Plans for the massive complex, first unveiled in 2019, call for it to sit atop a podium covering the Metra tracks and stretching from the McCormick Center north to the Field Museum. Landmark has done an extensive market analysis of the area, according to Dunn, and it is the lack of such a podium that has masked just how much potential demand exists for this slice of the South Loop.   

“That’s why there isn’t 20M SF of development on the site today,” Dunn said.  

The project’s first phase would include the transit hub, along with the 1.4M SF of entertainment and retail, including a 50K SF event and community meeting space, all divided into several districts.

Although Dunn said Landmark is ready to launch Phase 1 after it secures all the city and state approvals, the transit hub remains the chief sticking point. Transit experts and local editorial boards such as Crain’s Chicago Business and the Chicago Tribune have questioned whether it is worth launching such an undertaking.

“There is nothing conceptually wrong with a big development on that site, but the transit hub concept is a real stretch,” said Joseph Schwieterman, director of the Chaddick Institute for Metropolitan Development at DePaul University.

Although investors such as Ullico, Loop Capital and Johnson Controls are ready to jump in as partners once Landmark secures all the approvals, the developer is still seeking more than $6B in state financing over 20 years. 

Gov. J.B. Pritzker isn’t yet ready to commit to a financing deal on that scale, according to an October report in the Chicago Tribune. In addition, all of the transit agencies need to sign off on the plan, which calls for building a connection to a CTA line west of the One Central hub.

In September, Landmark released its long-awaited transit study, completed by engineering firm WSP. Dunn is ready to make the case for the multibillion-dollar hub.

“It certainly is a very important aspect of what will make the site unique,” Dunn said. “But I’d also argue the transit hub will be a civic asset.”

WSP forecasts that One Central will see about 100,000 boardings every day, making it the busiest train station in Chicago. In addition, it will open up more employment opportunities for 100,000 South Side residents by allowing them to quickly switch between the Metra and CTA lines, significantly cutting commute times to job-rich neighborhoods near downtown.

Dunn also brought consulting firm AECOM aboard to forecast the overall impact of One Central. According to its study, the completed development would provide 68,000 new permanent jobs and as many as 70,000 additional jobs elsewhere on the South Side.

“It will dwarf any project that you’re going to see coming out of [President Joe Biden’s] Build Back Better program,” Dunn said.

Dunn has made progress garnering the transit agencies’ support. Metra, which will get a new 18th Street Station as well as an improved railyard, signed a memorandum of understanding with the developer, calling the project a “golden opportunity,” but without fully committing to it. And CTA officials in September said they had a preliminary agreement with the developer to study the proposal more fully, although they stopped short of an endorsement.

“We feel we’re in a very good position with the transit agencies; that said, we have more work to do,” Dunn said.

But stakeholders will need to see more than studies commissioned by the developer, Schwieterman said. The numbers on ridership look good, but Dunn would be on more solid ground if the problem were tackled by either an independent researcher or a public agency using approved Federal Transit Administration methodology to make a ridership forecast.

“It is a good idea for a private firm to do a forecast to get things started, but a publicly conducted forecast is also needed,” he said.

Still, he gives Dunn and the development team a lot of credit for perseverance.

“Every time you think this project is dead, it comes back stronger than ever,” he said.