As demolition of the A. Finkl & Sons Co. steel mill kicks off within the next two months, real estate developers interested in the property are bound to challenge the industrial corridor’s planned manufacturing district (PMD).
In the 1980s, residential development crept toward the industrial corridor, pressuring industrial firms to move, sell or close. As a result, former longtime Finkl CEO, Bruce Liimatainen, and Chicago’s Planning Commission created Chicago’s first PMD, a powerful zoning tool that prohibits restaurants and retail shops from developing in certain zoned areas to protect industry from undue competition from residential and housing, in the Clybourn Corridor in 1988. After years of providing Finkl stability and assurance, the PMD now posses a problem to residential and commercial developers interested in the industrial property.
With Finkl’s move to the South Side, the 28-acre parcel along the western edge of Lincoln Park must be demolished, either mostly or fully, and prepared for sale and redevelopment. When all is said and done, developers have the chance to invest upward of $1 billion on one of the largest and best-located North Side parcels. While former Finkl executives have the potential to make $100 million on the industrial property, the sales price is dependent on the state of the PMD, whether it remains in tact, or is eliminated by the city.
Eliminating the PMD
If the city refuses to lift the PMD, prospective buyers will consist sole of manufacturing companies, continuing to protect industrial employment. Joel Rast, an associate professor of political and urban studies at the University of Wisconsin at Milwaukee who wrote a study on Chicago PMDs in 2005, told ChicagoBusiness.com that the city should be weary of the repercussions of eliminating the PMD.
“The city needs to really consider: What message are you sending to manufacturing in Chicago if you decide to give this PMD over to a high-end residential development?” said Rast.
While it is important that the city considers Rast’s question, there is no denying the Clybourn PMD has not fared well over the past decade. According to data provided by the city to ChicagoBusiness.com, between 2002 and 2011, manufacturing jobs in the area have dropped by 16 percent, with nonmanufacturing jobs rising by 80 percent. Numbers like these could play in the favor of developers.
Chicago-based Structured Development, LLC, one developer interested in the site,envisions developing some combination of high-tech office, research and development and biotech research, with complementary retail. Other developers believe the property, capable of holding as much as 4 million sq. ft. of commercial space, could be repurposed into a residential high-rise or large retail center
Regardless of the city’s decision to eliminate the PMD or not, Tom Kirschbraun, a managing director at Chicago-based real estate brokerage Jones Lang LaSalle Inc., told ChicagoBusiness.com that the property will draw in a great deal of interest.
“I think the interest would be extraordinary, setting (PMD) things aside,” says Tom Kirschbraun, a managing director at Chicago-based real estate brokerage Jones Lang LaSalle Inc. “We’ve never had a 28-acre site that close in. The defining factor (on the price) is whether you can get it zoned for something other than manufacturing.”