As part of a team led by Skidmore, Owings & Merrill (SOM), SB Friedman assessed the economic and fiscal potential of the 48-acre site of the former Michael Reese Hospital (MRH).
The City acquired the MRH site as part of its bid to host the 2016 Olympics. When Chicago’s Olympic bid failed, the City was left with the MRH site and debt related to the site’s acquisition.
The purpose of the team’s engagement was to identify viable anchor development concepts and the debt refinancing strategies, necessary infrastructure investments, potential real estate program, and implementation steps associated with each concept in order to maximize the economic, fiscal and neighborhood benefits of the MRH site. SB Friedman’s work included the following:
- Assessing near- and longer-term market potential for retail, office and residential uses on the MRH site in the context of specific anchor user scenarios;
- Identifying financing strategies that minimize the long-term cost of existing acquisition-related debt while preserving payment flexibility to align with different real estate programs;
- Projecting tax increment financing (TIF) revenue available for infrastructure investment and debt retirement based on each anchor user scenario and associated development program; and
- Projecting potential employment and wages associated with each anchor user scenario and development program.
In 2016 to 2017, we led a team assisting the City with the competitive recruitment, evaluation and selection of a developer for the site.
Results: The final plan was released by the Office of the Mayor on November 19, 2013. It reflects SB Friedman’s assessment of market-supportable development, and incorporates our forecasts of employment, wages, TIF revenue and net revenue gain (or loss) to the City under each of the three redevelopment scenarios under consideration.
In June of 2017, Mayor Rahm Emanuel announced that a team led by Chicago-based Farpoint Development had been selected to redevelop the MRH site into a mix of commercial and residential uses.
Image Source: Skidmore, Owings & Merrill LLP