The city will kick in $29 million toward a downtown high rise project on a prime piece of riverfront property, Mayor Rahm Emanuel announced Wednesday.
The long-discussed River Point office tower in the West Loop will rise 45 stories, overlooking the Chicago River from east of Canal Street and north of Lake Street. Emanuel said it will be the largest new real estate project to break ground in the city since the 2008 economic downturn.
Speaking to reporters on his one-year anniversary in office, Emanuel characterized the new building as evidence that businesses believe he is taking the correct steps to reform government and address the city’s shaky financial situation.
“If you do the fundamentals right, people will bet on the leadership that a city is showing, not running away from its future. Denial, as I’ve always said, is not a long term strategy, but meeting its challenges head-on,” Emanuel said. “And that gives them the confidence.”
“Confidence is the cheapest stimulus you can buy,” he added. “It’s free.”
What’s not free: the city will pay for part of the cost of a tunnel for Metra trains that pass to the east of the proposed tower and for a public riverfront park to be built on top of the underground structure. To come up with the $29.5 million for the work, the city will tap reserves from a downtown special property-tax district originally designed to promote development in blighted areas. The developer will pay an additional $30 million for the tunnel and park, according to mayoral spokesman Tom Alexander.
Emanuel said the investment makes sense because the park will be available for everybody. He also pointed out that River Point will bring in tax money and result in 1,000 construction jobs as the $300 million building goes up.
The project has been on the drawing board for several years. In 2008, the city approved a $30 million tax district payment for construction of the park to accompany a 51-story building at the location, but the financing fell apart.
Downtown office vacancy rates recently have been going down from their peak during the recession, a trend River Point developers Ivanhoe Cambridge and Hines Interests hope will continue when the building is ready for occupants in 2016.
“With the mayor’s leadership, we’ve seen an influx of tenants coming into the community, into the city, from the suburbs, as well as from other outlying cities,” said Kevin Shannahan, CEO of Hines Midwest.
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