The state of Illinois has bought a West Loop office building, a move that ought to erase any doubt it soon will fully vacate the historic but dilapidated James R. Thompson Center downtown.
In a deal being announced this morning, Gov. J.B. Pritzker’s office says the state has closed on the US$73.3 million purchase of 555 W. Monroe, the former home of PepsiCo. The 18-year-old structure has 430,000 square feet (39,948 square meters) of office space and has green certification for energy efficiency.
More than 1,000—and potentially 1,400—of the 3,500 state workers now based in downtown Chicago eventually will relocate to the new facility, starting in April, according to Ayse Kalaycioglu, chief operating officer of the Illinois Department of Central Management Services, which manages the state’s real estate needs.
About 900 of the employees moving to 555 W. Monroe will be coming from the Thompson Center, leaving 1,300 in the structure named after the former governor who championed its construction and mourned its declining fortunes. But they won’t be there long, said Kalaycioglu and Deputy Gov. Dan Hynes in an interview late yesterday.
The Thompson center is so old and dilapidated that “it makes no financial sense for the state to occupy (it),” Hynes said. Added Kalaycioglu, “We are continuing to evaluate…and look for other opportunities such as 555 W. Monroe.”
The deal came together after the owners, West Monroe Fund Investors and West Monroe Life Investors, agreed to sell 555 W. Monroe for slightly less than the appraised value of US$77 million and to throw in US$3 million in furniture, officials said. The state also acted as its own broker, saving US$2.6 million, and the building has been empty since PepsiCo left for the redeveloped Old Post Office, so it’s fully accessible now.
In comparison, the state says the Thompson Center has US$325 million in deferred maintenance needs now, a figure projected to grow to US$525 million by 2026. It also has annual operating expenses of US$17 million, four times what will be needed at 555 W. Monroe.
Other state workers moving to the new facility will come from downtown offices under six leases that will be canceled, saving the state roughly US$20 million a year. The leases are held by other state departments that “couldn’t wait” to get out of the Thompson Center and previously made arrangements to leave the building, Hynes said. The state refused to list those leases and their locations.
The state will keep a seventh lease at the Cook County-owned 69 W. Washington. “We got a good deal there,” Hynes said.
A list of which agencies will move is not yet available, but Kalaycioglu’s department and the Capital Development Board will be included, while the secretary of state, treasurer and other constitutional offices are expected to stay at the Bilandic Building, across LaSalle Street from the Thompson Center.
Officials have talked for years about selling the Thompson Center to a private developer to help shore up the state’s cash-short budget. Pritzker finally won that authority from the Legislature year, but faces a 2022 deadline for action.
Hynes said a request for proposals for a developer is expected to be issued in April.
Some preservationists and the Thompson Center’s designer, architect Helmut Jahn, have urged that it be renovated and repurposed, perhaps as part of a larger development. But Hynes and Kalaycioglu made it clear the state just wants out. They rejected comparisons to the state Capitol in Springfield, which, like the Thompson Center, features a large rotunda and lots of open, if wasted, space.
“It’s an apples and oranges comparison,” said Hynes “The state Capitol is the state Capitol. (Thompson) is an office building. The state uses lots of office buildings.”
For more on this story, go to Crain’s.