South Loop would get more than a new White

South Loop would get more than a new White Sox stadium – think homes, a hotel, restaurants and more – Chicago Sun-Times

Chicago developer Related Midwest plans to use a new White Sox stadium as a catalyst for a multibillion-dollar project on the vacant South Loop site called The 78 that will breathe new life into the downtown core.

Sources familiar with the plan fleshed out the developer's vision for the 62-acre area, which would include 5,000 residential units, 1,000 of which would be affordable, an office building, a hotel and dozens of restaurants and bars along a revitalized southern riverfront.

The 35,000- to 38,000-seat stadium that would be the new home of the White Sox would be a piece of the puzzle, but only a piece. If the plan comes to fruition, the property would finally earn its nickname as Chicago's “78th neighborhood.”

This vision impressed Ald. Nicole Lee, whose 11th District includes the Bridgeport neighborhood where the Sox now play at Guaranteed Rate Field.

She was informed Friday evening by Associated Midwest as well as Sox chairman Jerry Reinsdorf and Terry Savarise, the team's director of stadium operations. And she had to admit it looked too good for the Sox to pass up.

“What I saw was a very well thought out plan,” Lee told the Sun-Times Friday evening.

“You’re talking about a modern stadium built into some sort of master plan for a community. … This is not something that falls from the sky. We don’t have that in Bridgeport,” she added.

“It breaks my heart to think that the team could go anywhere but stay on 35th Street. But it’s their business and they have to make their own decisions.”

More than a baseball stadium

Also planned are 4,000 parking spaces under Roosevelt Road north of the stadium and, to the south, a school with thousands of students next to a University of Illinois research center known as the Discovery Partners Institute. The institute's executive director, Bill Jackson, confirmed that these are important elements of Related Midwest's plans.

“The investment will be billions of dollars over the actual budget for Phase 1,” said a source who has seen the plan. “It’s not just a baseball stadium. It's an opportunity to transform an entire part of the city.

“Bringing people back downtown … is an urgent economic imperative for this city,” the source added. “They will come downtown because there is something to do there. … This is a huge step in that direction. Someone works at Willis Tower. You…could walk to a ball game and this incredible entertainment district that was built around it. It’s a bigger story than just a stadium.”

White Sox chairman Jerry Reinsdorf speaks to reporters on Thursday.

White Sox chairman Jerry Reinsdorf said last summer he was exploring the possibility of leaving Guaranteed Rate Field when the team's lease expires after the 2029 season.

Many questions remain, including how much Reinsdorf would be willing to contribute and how much public funding would be required, given the high demand for public funds and the low public willingness to fund stadiums.

Following the Chicago Sun-Times' report earlier this week that the Sox were in serious negotiations to move to The 78, Illinois Gov. JB Pritzker reiterated his skepticism about public financing of stadiums, telling reporters that “nobody yet asked the state or the Illinois General Assembly, and that he would “consider anything they suggest or ask.”

Pritzker added: “You know my views on privately owned teams and whether the public should pay for private facilities used for private companies. However, there are things the government is doing [to] Support businesses across the state.”

Could TIF funds be used?

The City Council approved a tax increment financing district in 2019 to fund infrastructure projects needed to prepare The 78, a former rail yard, for development.

But using TIF money for a stadium could be politically dangerous for Mayor Brandon Johnson, who has promised to rein in TIFs and lucrative subsidies for developers.

The mayor's $16.7 billion 2024 budget leveraged a record $434 million TIF surplus to make good on his promise to hold the line on property taxes.

Still, Johnson might be so intrigued by the possibility of creating a new neighborhood in the South Loop that he would consider using TIF funds.

“The river is one of our greatest assets. If there was a southern anchor on the riverfront that truly drives traffic, activity and energy, it would have a significant impact on further maximizing this core value. It would give us something to attract tourists and residents to the city,” said an ally of the mayor.

The Illinois Sports Facilities Authority built and owns Guaranteed Rate Field. The authority has not yet been informed of the new plan, but would likely be involved in financing a new baseball stadium with the usual sources of hotel, restaurant and other tourism taxes.

Guaranteed Rate field.

The Guaranteed Rate Field opened in 1991 and has been updated since then.

If the White Sox were to move, the old ballpark would need a new user. Some have suggested that the Chicago Fire football team could move there from Soldier Field. The Fire have not directly commented on this possibility, saying the club's priority now is completing its training facility on the Near West Side.

Lee said the White Sox and Related have been thinking about what to do next with the current stadium and know “they can't leave us a hole.”

Lee also agreed that “the fire makes the most sense” as a new tenant.

Guaranteed Field Lease Agreement

Guaranteed Rate Field opened in 1991 next to the team's old home stadium, the now-demolished Comiskey Park. The financing came in an eleven-hour deal that prevented the Sox from moving to St. Petersburg, Florida.

Then-Gov. Jim Thompson stopped the clock to lobby lawmakers who approved the deal after the session's midnight deadline in 1988. It included revenue from an increase in Chicago's hotel room tax and $5 million in annual city and state contributions.

Guaranteed Rate field.

The Illinois Sports Facilities Authority built and owns Guaranteed Rate Field. The team was allowed to open a fan shop and bar/restaurant in this access ramp structure across from the park. But there's little else for fans to do in the immediate vicinity of the ballpark.

The first lease was extremely favorable for the Sox. For the first decade, the team paid no rent when annual attendance was below 1.2 million. Under its current lease, which runs through the 2029 season, the team pays $1.5 million in annual rent. The Sox control revenue from ticket sales, concessions, parking and merchandise sales.

And although the park has been renovated over the years, there has been no development around the park, although the lease was changed in recent years to allow the Sox to open a team store and restaurant on the state-owned property across the street.

Housing the White Sox in a more densely populated part of the city would require a different layout with multi-story underground parking. Planners likely anticipate that many fans would get to the games from the Roosevelt Road CTA station, which serves the Red, Green and Orange lines, as well as ride-hailing services. Water taxis are also possible.

The new Sox stadium would be funded “like any other baseball stadium in America,” the source said. “There will be a number of different sources.”

Is the housing market in the city center saturated?

How many residential units the market could accommodate remains unclear. Average rents downtown are still rising, although experts say the market has been dampened by the work-from-home trend and fears of downtown crime.

Ron DeVries, senior managing director at research firm Integra Realty Resources, said Related's South Loop site is well-suited for multifamily development because it is so close to downtown and has frontage along the river. He also said the apartments would be built in phases and would not come to market all at once.

“This is something that will not be developed in the next five years,” DeVries said. “It has a long horizon.”

DeVries said the downtown market received about 3,000 new housing units in 2023, with another 3,500 planned for this year. After 2024, potential new supply will drop dramatically, he said.

Almost all construction projects are rental apartments. Analysts report that condo development is now slow, with the exception of the limited market for multimillion-dollar units.

Meanwhile, hotels saw a boost in tourism and business meetings post-pandemic. A new hotel at The 78 could benefit from this and major events at McCormick Place.

A 2017 aerial view of The 78 development site.

A 2017 aerial view of The 78 development site.

Mark Segal/Related Midwest

Related's ambitious plans raise questions about whether they will work well with the Discovery Partners Institute, which is planned for the southern portion of the property near 15th and Wells streets. Jackson said he saw a site plan and insisted everything fit his institute.

“We have no problem with that. It brings the infrastructure that we would still need,” Jackson said.

The institute is planning a $250 million complex that will bring together academics and researchers with investors with the aim of creating new companies. It will not be a new campus for the U. of I., but rather an expansion of the university that will promote “equitable economic development,” Jackson said.

Construction is scheduled to begin this year and completion is scheduled for 2026.

Another source described the U. of I. as “extremely excited” about the stadium-anchored plan.

“When you talk about why a kid wants to go to a school and why a professor wants to teach at a school, and you bring that into an environment like what would be created at The 78,” the source said, “it becomes like that “Make it one of the best schools in the country immediately.”

Ald. Pat Dowell, whose 3rd District includes The 78, emerged from a meeting with Related Midwest on Friday saying she believes the proposed Sox stadium “could be a positive anchor for the new 78 community.”

“Provided the financial details can be resolved, this development represents a promising growth opportunity for Chicago. … The addition of significant marketable and affordable housing, retail stores, and a world-class baseball stadium and concert hall can be the type of catalytic investment this city needs,” Dowell said in a statement.

Dowell, a former city planner, warned that the planning process is still “very early” and that “a number of concerns” need to be addressed. These include “traffic impacts” on Roosevelt Road and 18th Street, safety and “quality of life issues,” including concert noise and “pedestrian access.”