Union Station tower takes step forward;
Developer seeking city subsidy for an 18-story addition

Crain's Chicago Business

June 11, 2007

By Alby Gallun

A plan to build an 18-story tower atop Union Station in the West Loop is poised to clear a major hurdle Tuesday, when a city panel considers providing a multimillion-dollar subsidy to help finance the long-awaited project.

The American Medical Assn. plans to anchor the $250-million development, which would include 539,000 square feet of office space, a 350-room hotel and six floors of condominiums, at 210 S. Canal St.

The physicians' trade group, which would move from its longtime headquarters at 515 N. State St., is in the final stages of negotiating a lease for 275,000 square feet of space in the new tower, says a person familiar with the AMA's plans.

An AMA spokesman declines to comment.

A lease with the AMA, coupled with a city subsidy, would give the development a big boost 17 months after a joint venture led by Chicago-based Jones Lang LaSalle Inc. was picked to manage it. Officials from the Department of Planning and Development on Tuesday will ask the Chicago Community Development Commission to approve tax-increment financing for the project, though they refuse to say how much money the developer is seeking.

A Jones Lang spokeswoman also declines to comment. "We've been told we can't talk about it," by the Planning Department, she says.

In 2002, the development commission approved $18.7 million in TIF funds for a redevelopment of the station by Chicago-based Prime Group Realty Trust. Amtrak, which owns the property, dropped Prime Group as the developer about two years later. With construction costs escalating, the new TIF request could exceed the original amount.

Architect Daniel Burnham, Union Station's designer, had envisioned a tower on top of the building, but it has stood at eight stories since it was completed in 1925.

The development commission almost never rejects TIF requests. But it has come under criticism in recent years for subsidizing corporate relocations to new downtown high-rises that probably would get built without TIF money.

"It's nice to have developers do stuff," says Cook County Commissioner Michael Quigley, a TIF critic. "But I'm not sure it wouldn't happen otherwise."

Copyright 2007, Crain Communications

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