The City Council on Wednesday approved a $54.7 million property tax break that developers say is critical to secure financing for their $7 billion plan to turn a sea of parking lots around the United Center into a massive residential and entertainment complex.
Mayor Brandon Johnson has defended the United Center subsidy even though he’s trying to block a separate property tax break that could pave the way for the Bears move to Arlington Heights by arguing that owners of billion-dollar sports franchises shouldn’t receive handouts.
The City Council overwhelmingly agreed — even though the 12-year $54.7 million Class B property tax cut only applies to Phase One of the $7 billion development.
The Wirtz and Reinsdorf families, owners of the United Center and the Bulls and Blackhawks, have not ruled out seeking additional property tax breaks for subsequent phases.
Tens of millions in public funding may also be required to build a new Pink Line CTA station near the United Center. Specifics of that project have not finalized.
Steve Rucks, chief financial officer of the United Center, told a City Council committee earlier this month that it’s been a struggle to nail down the remaining 80% of private financing to bankroll the $500 million first phase of the project “with the market where it is today and construction costs where they are.”
That private financing is contingent upon City Council approval of the property tax break, Rucks said.
Ald. Walter R. Burnett (27th) has hailed the 1901 Project as the largest investment on the Near West Side since the United Center was built more than 30 years ago under his father’s tenure as 27th Ward alderman.
Burnett has predicted that, even with the tax break, the project will be a catalyst for growth on the Near West Side and beyond, generating millions of dollars in new development and tax revenue for the city.
Phase 1 of the 1901 project will be anchored by a 6,000-seat music hall, and will include a public plaza, boutique hotel and parking deck with a rooftop park.
The 800,000 square feet of development is expected to generate $46.3 million more in tax revenue and create nearly 2,000 construction jobs, 600 permanent jobs and 180 part-time positions.
Developers’ 2014 zoning application called for up to 9,463 residential units, 20% of them affordable; and 1,309 hotel rooms. The height of the tallest building t would be 660 feet, making it the tallest building in the surrounding area.
The 6,000 seat music hall and other entertainment-related uses at Damen and Adams would fill a void on a Chicago music scene that now includes small and large venues, but nothing in between.
A parking deck topped by a 2.5-acre park is part of Phase One. The entire project would include roughly ten acres of new green space, if developers proceed with all seven phases.
Burnett’s father, retired Ald. Walter Burnett Jr. was enticed by the increase in affordable units, which would include student housing for nearby Malcolm X College.
“I love the green space. I love the skating rink. I love the retail. I love the fact that the United Center is working with the community with some of their retail spaces,” the elder Burnett told the Sun-Times when the zoning application was introduced.
The initial filing made no mention of the CTA station that developers believe is need to access the planned residential and entertainment district and minimize the need for parking.
But the elder Burnett said nearly two years ago that the new Pink Line station was under discussion and that a likely funding source would be the surrounding tax increment financing district, though the TIF “may be expiring,”
Further complicating matters is Mayor Brandon Johnson’s $1.25 billion bond issue to bankroll affordable housing and economic development projects. It weans the city off of its longstanding dependence on TIFs.