City government officials, real estate owners, architects and planners have lately linked arms around a common concern: The Loop’s LaSalle Street corridor needs help. The campaign probably leaves some Chicagoans wondering what all the fuss is about.
What makes LaSalle so special? Aren’t the bankers and traders down there doing fine?
Yes, most are probably fine, but they aren’t there in the middle of the Loop anymore.
Northern Trust is still based on LaSalle, but it has moved a lot of its staff to 333 S. Wabash Ave. BMO Harris and Bank of America have vacated the street for glass curtain-walled modernism in West Loop towers that bear their names.
People who used to congregate and shout orders at the Chicago Board of Trade now do business elsewhere, in home offices or firm-specific trading floors that can be anywhere.
They have left behind a LaSalle that can seem sleepy even on bright weekday afternoons. The pandemic blitzed the street and remains a deadening factor as many people are holdouts in the great back-to-the-office push.
But the street and adjacent blocks have been suffering for a while because an expanding business district has given companies newer options.
“Most employers want facilities that are up to speed with the amenities, like top-of-the-line HVAC systems and gyms and conference centers. It’s all a flight to quality,” said Chicago developer John Buck, whose towers on Wacker Drive anticipated downtown’s westward push.
In contrast, the Classical and Art Deco buildings on LaSalle, while providing a distinguished Chicago scene, can seem mired in a past of ticker machines, spittoons and typing pools.
Market analysts put the office vacancy rate around LaSalle at 26%, the highest of downtown submarkets, with retail vacancies of about 36%. Mayor Lori Lightfoot, in announcing last week a proposition to help property owners spiff up the street, said that amounts to 5 million square feet that’s unused. Think of it as 25 empty Walmarts.
Or, as the city prefers to see it, maybe 1,000 new homes, 300 of them for people with low to moderate incomes. With its LaSalle Street Reimagined initiative, the city is offering money to landlords to support renovations, especially those that diversify downtown housing.
An array of subsidies is available, but a lot of discussions will center on tax increment financing subsidies from property tax payments. The street includes the LaSalle Central TIF district, which has long been one of the city’s biggest “mad money pots.” At the end of 2021, the account had almost $197 million.
Samir Mayekar, Lightfoot’s deputy mayor for economic and neighborhood development, said landlords and lenders, who in a few cases might end up controlling properties, are eager for the city’s help. Redevelopment plans, due by Dec. 23, could serve the interests of both historic preservation and affordable housing, he said.
“Equity is not achieved on its own,” Mayekar said. “The free market will not lead to affordable housing downtown without the city’s involvement.”
Michael Reschke, chairman of Prime Group, is the downtown developer responsible for the best news LaSalle has had in some time. His tripartite deal puts Google in the Thompson Center, state government’s former base at LaSalle and Randolph Street, and moves 1,800 state workers to 115 S. LaSalle, the old home of BMO Harris. Google is expected to bring several thousand employees to the Loop but hasn’t put a number on the influx yet.
The move shows office use will remain an economic driver in the area, Reschke said. Still, he said he supports Lightfoot’s plan to end the office “monoculture.” Reschke owns 111 W. Monroe St., next to the state’s new home, and he’s considering converting the top half of it to apartments. “That’s the best residential market in the city,” he said.
The Brookings Institution has identified Chicago as having the fastest-growing downtown in the U.S. since 1980. Since 2010, the population of the more limited area called the Loop has risen more than 44% to almost 43,000 people. Over the same period, the Near North, South and West sides all recorded population gains of more than 20% since 2010, according to the Chicago Loop Alliance. That puts the central business district at about 245,000 people.
None of this registers with “hellhole” hatemongers who denigrate Chicago at every turn. The city certainly has a heaping share of problems — and crime could be a pivotal one in next year’s mayoral and aldermanic elections — but the narrative that people and businesses are exiting in droves just doesn’t stand up.
With that in mind, the challenges of LaSalle Street look less daunting. Reviving it just means helping it catch up with everything around it.