CRAIN’S CHICAGO BUSINESS: How the quantum and United Center projects could spark action in investment-starved neighborhoods
For years, Chicago planning officials have labored to kickstart real estate development in disinvested South and West side neighborhoods, chipping away at one publicly-subsidized apartment building, one retail project, one community center at a time. Now, two massive proposals and billions of dollars in new investment stand to supercharge their effort.
The challenge is making sure they have the ripple effect the city needs.
Along a once-gritty stretch of Lake Michigan, the newly announced Illinois Quantum and Microelectronics Park stands to turn the long-dormant U.S. Steel South Works property into a cutting-edge 128-acre campus for quantum computing research. Palo Alto-based startup PsiQuantum will anchor the project with a commitment to invest $1 billion into it and bring scores of jobs to the area as it vies to build the world’s largest quantum computer in South Chicago.
News of that development came just two days after the owners of the United Center revealed their vision to spend $7 billion building up 55 acres around the venue as part of the 1901 Project, which could turn the area into a mixed-use campus over the next decade and help link the rapid growth of the West Loop to investment-starved neighborhoods on the West Side.
The plans come at a time when Chicago is hungry for them. The city is trying to shed its reputation among major real estate investors that it’s an unattractive place to put their money, mired with real and perceived issues with violent crime, high taxes and political instability. Beyond those hurdles, debilitating population loss in low-income South and West Side neighborhoods has made it an even longer shot for economic development to happen in the areas that need it the most.
The quantum and United Center projects — which have their own anchor users lined up, unlike other planned megadevelopments in the city — set the stage for more real estate investors to follow into neighborhoods they don’t frequent. But the proposals also put pressure on city officials to ensure they are properly leveraged as a launching pad.
“They shouldn’t just be seen as little dots on the map, and that’s the only planning that happens,” said city planning department veteran Eleanor Gorski, who is now CEO of the Chicago Architecture Center. “These are dots with ripples, and the city needs to step up and produce the ripples.”
The Invest South/West initiative launched by former Mayor Lori Lightfoot’s administration has been the city’s most comprehensive approach to catalyzing investment in vacancy-riddled South and West Side commercial corridors. The program channeled public resources into a range of developments meant to be neighborhood anchors that help draw in other private investment. But many of those projects remain in planning stages, set back by challenges with approvals and financing.
Gorski said the two newly proposed megaprojects on the Near West Side and in South Chicago give the city an opportunity to focus its resources and attention on the neighborhoods around them rather than trying to create new anchor projects themselves. One example: Using Neighborhood Opportunity Fund grants — money from developers that paid to build more dense downtown projects — to help revive vacant city-owned lots or boost entrepreneurs in the vicinity of both sites rather than spreading money more thinly across the city.
“It’s picking out select areas and commercial streets, doubling down on providing city assistance and being proactive, not just stepping back and saying these are (resources) that are here,” she said.
The quantum research park that could open in 2027 stands to dramatically change the heavily residential South Chicago neighborhood to its west, a once-bustling community during the decades the U.S. Steel mill was operating. The challenge will be making sure the change improves the quality of life and builds wealth for existing residents in the area, said Dave Doig, whose Chicago Neighborhood Initiatives has led development of high-impact projects that have revitalized the Pullman neighborhood over the past decade.
“It’s going to take some intentionality. It’s not just going to happen,” he said. “The fear is that this just becomes an island — people go there to work and then leave, and nobody benefits — so I think there’s going to have to be some real planning and intentionality around making sure that those linkages (are made) with residential, retail, jobs… I’m sure there are hundreds of city-owned vacant lots that dot this area.”
There are more than 2,000 vacant lots in the 7th Ward that borders the northern portion of the South Works site, according to Ald. Greg Mitchell. “Today, those properties just became a little more valuable,” he said after an event yesterday announcing the quantum research park.
The quantum project could help encourage developers to build on many of those lots, Mitchell said, and could boost home ownership in a neighborhood where the median income is less than half of the Chicago average and most residents rent.
For Leon Walker, whose DL3 Realty development firm has been investing in and near the neighborhood for years, the public-private investment in the quantum park “confirms the faith we had in the future of the South Side.” DL3 is expected to finalize a redevelopment agreement with the city for public funding this fall to begin construction on Thrive Exchange, a proposal born out of the Invest South/West program that stands to add more than three dozen apartments a few blocks west of South Works.
“We hope it will be home to many talented quantum campus workers,” Walker said.
City officials need to use the quantum investment as a springboard for other investments that will repopulate the area, said Jorge Perez, a longtime resident who opened Chico’s Oven walk-up window in 2021 in a former grocery store and bakery his family has owned at 83rd Street and Houston Avenue since the 1970s.
The shop has served up sandwiches and other food only on weekends because of a lack of foot traffic in the area the rest of the week, but plans to add more hours to its schedule as the PsiQuantum project comes together.
“Retail only works if you have people,” Perez said. “This is an engine that creates people coming in.”
Mayor Brandon Johnson yesterday announced the city’s first financial commitment to the quantum project itself: $5 million from the bond funding plan that the mayor called his “signature initiative to invest in and develop our neighborhoods to achieve equity and prosperity for all of our people.” The money comes from proceeds of bond sales backed by expiring tax-increment financing districts, and $5 million is the maximum grant that can be given without City Council approval.
Speaking about the United Center project earlier this week, Chicago Department of Planning and Development Commissioner Ciere Boatright said the private investment will “create a new mixed-use economy for the Near West Side.” Other real estate proposals that come as a result of the development will allow the city to showcase its “cut the tape” initiative meant to expedite approvals for real estate projects, she said.
While it’s unclear how public resources will play a role in the broader plan, Vice Mayor and 27th Ward Ald. Walter Burnett said the city may consider an extension of at least a portion of the Central West TIF District that surrounds the United Center to help with infrastructure and public aspects of the development. Among other improvements, the owners of the Chicago Bulls and Blackhawks proposed a new CTA Pink Line station to service what could be a far more heavily populated area around the arena in the years ahead.
“To all the developers out there, all the people looking to invest in (Chicago): invest west,” Burnett said during a news conference for the 1901 Project. “There’s a lot of great properties over here, there’s a lot of opportunities over here for us to continue to help the city to grow.”