Illinois Governor JB Pritzker made a deal for you to sell a state building in downtown Chicago for less than half of what taxpayers will pay to get a third of it back.
After selling the besieged James R. Thompson Center to a developer for $ 70 million, Gov. JB Pritzker said he plans to buy a third of the state office building for $ 148 million.
After several delays, Pritzker announced on December 15 that the state was in final talks to sell the building in the heart of downtown Chicago to a developer. Once the developer remodels the neglected property, Illinois will buy back a third of the building, bringing the net cost to $ 78 million.
Despite the red ink, Pritzker argues the plan will save taxpayers millions when the cost of buying or renting a different space for state employees is factored in. The center has 1.5 million square feet, with 2,200 state employees occupying about 60% of it.
“We are taking a big step forward with a plan that will result in the sale of the Thompson Center and save taxpayers $ 800 million,” Pritzker said at a press conference.
Sale of the center has been permitted by law since April 2019. However, the pandemic has caused demand for downtown commercial properties to plummet with the rise of remote working. The vacancy rate in Chicago’s central business district hit 17.7% this year, the highest since 2010.
âGovernment employees will be there to support the continued economic revitalization of the Loop for years to come,â said Pritzker.
The sale became the only option once the state could not afford the repairs, which amount to around $ 325 million. Part of the reason the building is so expensive is its huge glass atrium, which has leaked thanks to neglected maintenance. It has little insulation, which increases heating and cooling costs.
Developer Prime Group claims they can get around costs by replacing the exterior with a glass curtain wall, separating the offices from the atrium.
Once the building is renovated, Prime Group CEO Michael Reschke said they could include a hotel on the upper floors.
Heads of state expect the deal to be finalized in April 2022.
Using the income projections from a Thompson Center sale was once a routine accounting gadget for state politicians. Lawmakers included between $ 200 million and $ 300 million in revenue from a supposed sale of the Thompson Center in state budgets for fiscal years 2017, 2018 and 2019.