Chicago Public Schools is looking for a real estate agent. The district announced Monday it is thinking about selling its 20-story headquarters at 125 S. Clark Street in downtown Chicago. It estimates that moving to smaller digs could save between $2 million and $3 million annually.
And it says the sale of its headquarters could help stave off cuts to classrooms in light of what CPS says will be a $1 billion dollar deficit next school year.
CPS says recent rounds of budget cuts have slashed central office workers from a head count of over 1,500 in 2009 to today’s count of 1,090. CPS says it needs about 200,000 square feet for those employees, less than half the 450,000 square feet the workers currently occupy.
The announcement about the possible sale of central office comes as Chicago also debates whether to close school buildings around the city—perhaps scores of them—in an attempt to “right size” the district’s “footprint.”
Ralph Martire, director of the bipartisan Center for Tax and Budget Accountability, cautions against selling public assets to pay for day-to-day expenses.
“It’s a one-time revenue source. So the money comes in, and if you do use it to cover current operating, you create a cliff down the road when you run out of that one-time revenue source," said Martire. "It’s not a good thing to do with public assets."
Martire says, generally, money gained from the sale of public assets should create some other long-term investment or be used to pay off long-term debt, such as unpaid pension obligations. And he says before acting, the district should analyze carefully whether it will need to scale back up in the future.
CPS issued a formal request with Monday’s date on it for proposals for “real estate brokerage, transaction management and strategic planning services.” But apparently the district has been thinking about what to do with 125 S. Clark Street for some time.
The Civic Consulting Alliance, a politically connected nonprofit that deploys business consultants to help solve problems facing city government, indicates on its web site that CBRE Group, Inc., “the world’s leading commercial real estate firm,” and Cannon Design, an architecture and design firm, undertook a 2012 pro bono project that looked at space needs for CPS. According to the web page, the firms then conducted a “comprehensive real estate analysis,” including “estimating the market pricing for selling or leasing CPS headquarters.”
In December, WBEZ requested from Chicago Public Schools any final work product produced by CBRE Group, Inc., and Cannon Design. In response, CPS sent copies of invoices, but did not indicate what the work was for and did not provide any final work product. (Cannon Design did $8.43 million in business with CPS last school year; it’s been paid $3.86 million so far this year.)
Asked again on Monday for any studies or major findings produced by CBRE Group, Inc., and Cannon Design, a CPS spokesman responded by email, “We weren't able to track down this information.”
CPS purchased 125 S. Clark Street in 1997 for $8.3 million. In a press release, the district says if it does not find another suitable site, it may consider consolidating its operations at its current location and leasing out part of its building as office space.