What’s happening with the Sears building?

The latest development for the empty Sears building at Lake and Chicago is that Allina Hospitals and Clinics has decided to move its headquarters there and take 7 floors and 250,000 of the 350,000 square feet of office space available. That commitment pretty well insures the success of the project.

A few months ago Ryan Companies had been awarded the bid to redevelop the complex. Their plans had emphasized senior retirement condos with some retail on the first floor. Those plans will have to be modified now to give space to Allina.
Ryan’s original plans called for the demolition of the building that sat across the railroad tracks. The Midtown Greenway Coalition had managed to convince Ryan that opening up the Greenway was more important than saving the building. Fortunately, Ryan was ultimately convinced to save the building and make a hotel connected by a walkway to Northwestern Hospital for friends and relatives of patients. Also, occupying two floors of that building is a cooling system worth approximately $2 million that has never been used. It has the capacity to cool the entire Northwestern campus.

Ryan is expecting $65 to $75 million in government subsidies for its involvement at the Sears site. They will probably receive $1.3 to $1.4 million from the City in Tax Increment Financing every year for 20 years. The building complex at its highest assessed value today is probably worth $2,003,746 per year in property taxes. The new changes in the law governing tax increment districts means that the School system will continue to get its share of property taxes from this amount, but the remaining 72% (the City and County share) will be rebated each year back to Ryan. It is expected that most of that amount will go to building a parking ramp.

Allina made the decision to commit to the Sear’s site after the last piece fell into place. For years Allina has lobbied the City, County and State to rebuild the exit ramp off of 35W so that it crosses Lake Street and connects directly to 28th Street making it an easy and direct exit for staff and visitors to Northwestern Hospital. Original plans called for a high wall and taking a dozen homes. A scaled down version calls for a smaller wall and the taking of only four homes. The County and the Governor had agreed to the plan, and the City agreed last week.

Was it necessary for local governments to jump through all those hoops and give away all that money to get Allina to commit to Chicago and Lake?

Probably. Although, of course, we’ll never know for sure. Other cities wanted Allina to locate in their communities, and they were willing to offer incentives. What Minneapolis offered was not out of line (forgiveness of property taxes for 20 years) with what others would have offered.

The Sears building has stood for a decade like a gaping wound on Chicago and Lake. Maggots ran across it selling dope, prostitution and broken dreams. Those of us who live in its shadow had almost given up hope. Now it looks like it will come to life again. Of course, every politician holding elective office will claim credit for saving it. And they do deserve credit for not losing it. Few people will remember that just a few years ago Mayor Sharon Sayles Belton, Council President Jackie Cherryhomes and 8th Ward Council Member Brian Herron wanted to tear down the buildings and build a strip mall for a Chicago developer.