State agrees to deal to sell, then buy back space in Thompson Center, which new owners say they’ll renovate
The state of Illinois on Thursday finalized a deal to sell the James R. Thompson Center for $70 million and then buy back about one-third of the building for more than double that amount.
The sale to a company led by Michael Reschke, chairman and CEO of real estate developer The Prime Group, will spare the state’s controversial Helmut Jahn-designed Loop headquarters from the wrecking ball.
The state entered into negotiations with Rechke’s JRTC Holdings in December, and the deal was signed just ahead of a Tuesday deadline set in state law.
The $70 million upfront payment to the state is dwarfed by the roughly $146 million the state will pay to buy back office space once the notoriously rundown building is renovated, a net cost of $76 million.
In the long run, however, state officials say the deal is good for taxpayers, who would otherwise bear the full cost of needed upgrades to the 17-story glass-and-steel structure — estimated at $325 million — or of purchasing or leasing other office space in the central business district.
Gov. J.B. Pritzker’s office estimated the deal will save the state $20 million per year over the next 30 years by consolidating office leases and reducing operating expenses.
The sale, expected to close this summer, also will add “vitality to Chicago’s LaSalle Street corridor by honoring the original design through a modern lens,” Pritzker said in a statement.
JRTC Holdings is working with the late Jahn’s firm on its plan to revamp a building, named for former Gov. James R. “Big Jim” Thompson, that has inspired strong opinions since opening in 1985.
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The redevelopment plan calls for installing a glass curtain wall to separate the office floors from the soaring atrium, which should alleviate many of the heating and cooling issues and noise problems the building has faced, Reschke said late last year when the tentative agreement was announced.
“That atrium will become the monumental entrance to the future office building, and it will be unlike any other entrance in the city, and for that matter in the country,” he said.
The overhaul is expected to take about two years, and Reschke estimated it will cost about $280 million.
The CTA’s Clark/Lake station that occupies part of the building will remain in operation throughout construction.
Once completed, the state will occupy 425,000 of the building’s 1.2 million square feet.
