Plans for the quantum campus in South Chicago reveal a site more than four times bigger than Lincoln Yards. Crain’s commercial real estate reporter Danny Ecker talks with host Amy Guth about the site and its potential impact.
Plus: Chicago Mayor Brandon Johnson unveils picks to replace school board after mass resignation, Rivian seeking federal loan to restart Georgia EV plant project, Stellantis sues UAW to stop strike over plant investments and Walgreens to pay $80 million in Baltimore opioid settlement.
Mayor Johnson unveils picks to replace school board members after Friday's mass resignation. This is not the first time the number of resignations that we are seeing are taking place. Six members resigned. I replaced six back in July, and in this instance, seven members decided to resign, and I accepted their resignation. I'll talk with Crane's reporter Danny Eckert about the quantum-anchored South Works campus that is set to be bigger than Lincoln Yards times four. And the square footage outlined in this zoning application is really what's so staggering, 59 million square feet of buildings. I'm Amy Guth, and this is Crane's DailyGist for Tuesday, October 8th. When I dive deeper into the topics you've heard here, read the full stories and get access to all of Crane's award-winning coverage with a Crane's Chicago Business subscription. Crane's DailyGist listeners can get 20% off a one-year Crane's Chicago Business digital subscription by visiting ChicagoBusiness.com/Gist and using promo code JIST at checkout. Once again, to redeem this offer, visit ChicagoBusiness.com/Gist and enter code JIST to get this deal while it lasts. I'm joined by Crane's reporter Danny Eckert, here to talk about how the quantum-anchored South Works campus is set to be bigger than Lincoln Yards four times over. That is a big thing. Talk to me about the latest. We have talked a few times about this campus, about SciQuantum, about what's going into the former U.S. steelworks site. But tell me the latest. So what we've had now is the first formal step toward the approval of this whole plan for the South Works site. It's a plan development application from Related Midwest, which is the developer that's going to be buying this entire 440-acre property that has been long fallow, basically. The former steel mill for U.S. steel had one plan after another come through and fail, and now this thing appears to be finally moving forward. Related Midwest needs the city council to sign off on their whole vision for the plan, and so this zoning application for the first time lifted the hood on what related Midwest really envisions for this whole property over time. It didn't give a lot of the details, but of course, we talked about this quantum computing campus. That'll be the anchor of what they want to do, about 128 acres on the southern portion of the site, and the square footage outlined in this zoning application is really what's so staggering, 59 million square feet of buildings. Yeah. Put it in perspective, Lincoln Yards, on the north side, that's about 14 million, a little more than 14 million square feet is what they'd proposed there, the 78 on the south loop, the massive site there, about 13 million square feet. If you put those two together and add in the Michael Reese Hospital site in Bronzeville and add in the United Center project that's now the 1901 project that's been proposed recently, which is another 14 million square feet, all four of those are still smaller than what this South Works development could be, and this is obviously over a long period of time, so quantum computing campus is just a portion of that, but it's just kind of amazing when you think about the size of this, this is really only second to like the airports when you think about the scale of what would be developed here in the Chicago area. Yeah, I was just about to say that feels airport size, and that seems giant and almost like hard to understand even, but in the construction of this, and I wonder if the plans outlined any of this, some of it we've talked about before, of what's needed, because this isn't just warehouse space, there's cryogenic facility, there's a lot of considerations that will go into quantum facilities, talk to me about that. There's the idea that this is going to be, obviously there's those industrial and very technical facilities that are needed to do quantum computing research, that's why they chose this, I was the access to water, they have to be able to create the temperatures near at absolute zero, so to be able to do that is kind of be the first piece of this, but then there's this commercial and office portion piece of it, which is where the University of Illinois will help operate and collaborate with other universities and researchers at some lab space that would be built out here, so it's a lot of research and development type of properties and other eventual commercial industrial properties that would be built out, that's the zoning that they're seeking here, I guess the one maybe interesting thing that we kind of suspected but didn't really know until we saw this application come out was that there'd be no residential component to this, I mean some of the previous proposed developments on this site were thousands of homes or mixed use properties and that is something that related to Midwest is at least this point not pursuing, I think that allows them first of all to avoid a large debate over affordable housing and there's been some environmental remediation concerns over this site, long time steel mill and what's in the land there, I think when we were basically capping the land and building industrial and commercial properties on top of it, it's a little bit of a different hurdle to clear than doing residential, so that's another thing that just helps kind of clear path to help them move forward with this, you know this is going to be eventually a large campus that's right adjacent to the South Chicago neighborhood, that's got a number of homes but certainly has seen a bunch of disinvestment over the years like many other neighborhoods on the south side, so there's an opportunity to do more beyond that and you know related to Midwest has been recently going through with some community meetings, I think they've had two already to try to figure out how do we do this in a way that obviously is city and statewide and its impact in nature but also local and its impact to be able to make sure that nearby residents are benefiting from having this massive site on their lake front helping with local employment and making sure that they're still having access to the lake. That's exactly what I wanted to ask you about next, kind of what this development means economically for that part of the city and given the timeline, I mean it seems like there will be an immediate impact of kind of construction jobs and things like that because it's a big project that will take a while but kind of longer term it sounds like you know what you're describing there, they're already kind of getting into that and making some plans there. Yeah, you know so we don't know how many jobs would be created, you know sort of full-time employment on whatever is built here on this over the course of a decade or more, how long it takes to build out a lot of the site but up front we're talking about dozens and scores of research jobs for psi quantum and other which is the anchor tenant of course that's going to be at this Illinois quantum and microelectronics park and some of the other research that's being done there but the construction jobs certainly up front are a big impact and then you know retail restaurants other places where people are who are there working there are how do you make it so that they also have places to go to lunch nearby and that are patronizing local businesses, you know that's I think what has a potential real impact there and you're just having more home ownership in an area where a lot has been lost, again that's not unique to the South Chicago neighborhood but when this announcement happened over the summer that was not lost on anybody, there was one local bakery I believe that was providing some of the food that day and they were like hey we're here and we want to make sure we are benefiting from this and you know when you really step back and look at what the city's strategy has been over decades to try to spur economic development in south and west side neighborhoods under late foot it was this invest south west strategy of looking at commercial corridors and hey can we publicly subsidize some affordable housing projects, retail projects mixed use these are much smaller scale things that will have a ripple effect in the surrounding neighborhood, well now you have something big you know something that not necessarily is going to bring thousands of people to this site every day but it's something that has the potential over time to make people want to say hey this is worth buying land and investing in land and owning a house nearby, having other retail, having more coffee shops, things that are just lacking in a lot of these neighborhoods which makes people who live there not want to live there anymore, these are things that's where the opportunity I think is for the city to kind of follow the momentum created by this campus over the next few years to say hey we can use this as our engine to make sure that the south Chicago neighborhood really benefits from it and some of the areas around I mean this is obviously not far from where the Obama presidential center is going to be so you have this collection of projects now along the lakefront in the south side where there could be over the next five to ten years significant change in terms of both home ownership and generational wealth building that you could see happen as a ripple effect of this quantum campus and everything else happening there. Yeah definitely and I'm thinking of related Midwest too this is another huge project for them and they've got a lot of other irons in the fire but it feels like a bit of a shift I associate them more with luxury residential. Yeah I mean if you look at what they have on their plate now many people have heard about the 78 as we mentioned before you know this mixed use campus that of course that's been getting headlines recently because they're trying to partner with the Chicago White Sox for a baseball stadium that would be the anchor of that project and they've got you know the Discovery Partners Institute with U of I that is getting going underway with actual construction there that's the big piece they recently broke ground on the 72 story apartment tower on the infamous former Chicago Spire site along the lakefront so that's also on their plate and they're trying to kickstart a big office project in the full market district where they are not too long ago completed one of the tallest apartment buildings the tallest apartment building in the neighborhood so far so you know a lot of a lot on the residential side apartment side multi-family but related you know is is one of the most well-known developers in the country and this is just something that they obviously see a big opportunity to develop they're they've got some partners with Clayco which is of course a large design build conglomerate so they've they've got a lot of people backing them here and I think that's really what I think in most developers that have the capacity to do something of this scale would jump at this opportunity because when you have the state with hundreds of millions of dollars saying we're going to support this it's not just you owning a private site and trying to find an anchor tenant and get the financing that's something that is hard for developers to pass up and so Relay Midwest is just basically adding to adding to its plate it's got a big appetite and it's it's got a lot of Chicago projects happening indeed and so timeline wise the City Council still needs to sign off beyond that what what sort of run are we looking at so the plan would be that if the City Council signs off on this new plan development proposal in the next couple months that potentially we could see a groundbreaking on the the first facilities that are tied to this quantum campus in the spring of next year so we could see some some opening of you know maybe 2026 I've we've heard Relay Midwest say 2027 on the day that they announced this whole thing so these things have a habit of taking a little longer than than we might say when they when they out out and being announced but you know we're talking about trying to get some sort of anchor for this larger site within the next 24 months or so which would be a big deal especially at a time when there's not a ton of economic development and a lot of cranes in the sky in Chicago yeah indeed alright well I'm sure we will talk about this plenty more down the road but thanks for stopping by today appreciate it thanks for having me coming up Rivian is seeking a federal loan to restart its Georgia EV plant project we'll talk about that and more right after this thanks for listening to cranes daily gist remember we provide a daily news brief that drops right in your inbox it's our newsletter called the cranes morning 10 they're the 10 stories that will fuel a smarter work day to subscribe visit chicagobusiness.com/morning10 on Monday Chicago Mayor Brandon Johnson named replacements for the Board of Education members who all resigned together on Friday rather than follow through on the mayor's call to oust Chicago Public Schools CEO Pedro Martinez during an event Monday morning the mayor was initially shouted down as he took the podium by a handful of people carrying fire Brandon signs and shouting this board is not legit after the protesters were escorted out the mayor laid out his plan so every single mayor in the history of Chicago has had the authority to to appoint board members to multiple boards guess who still has that authority this mayor does telling the remaining crowd quote make no mistake about it I am going to stand firm and flatfoot to ensure that our students get what they deserve our people in this city are tired of political leaders that want the status quo to nibble around the edges and then when children don't get what they deserve they blame the very communities that they've disinvested in not in my watch time critics up his plan to the arguments made against abolishing slavery the mayor said quote the argument was you can't free black people because it would be too expensive and now you have detractors making the same argument of the Confederacy when it comes to public education in this system these are the people who package these gimmicks lie to our people stole money from our people refused to pay into the pension system left the tax payers with the bill and for me to fix it the six people the mayor is nominating to the board include Olga Bautista executive director of the Southeast Environmental Task Force Michelle Kyla blaze who ran for one of the elected school board seats before withdrawing from the race reverend Mitchell Johnson an executive with groundswell Debbie Pope a Chicago teachers union member and west side activist Mary Gardner at the event the mayor also shut down a reporter's attempt to ask the board nominees if they support the mayor's call for borrowing to fill the district's budget deficit asked how the candidates were vetted the mayor said quote they were asked to carry out the vision of public education the one that I ran on but Johnson's announcement is the latest twist in an extraordinary political firestorm even by Chicago standards Friday's board resignations came more than a week after the school board took no action to remove Martinez and weeks before the city's first school board elections which will create the first ever hybrid board of 10 elected members and 11 appointed by the mayor in three decades of mayoral control over the board no Chicago mayor has ever replaced all of their hand picked members so quickly and the upheaval also takes place amid the districts ongoing contract negotiations with Johnson's former employer the Chicago teachers union earlier this month the mayor asked Martinez to step down though he later denied doing so during a public appearance Martinez refused to resign and the now outgoing members of the school board declined to fire him and the flashpoint creating tension between Johnson the board and Martinez is the district's budget which contained a half billion dollar deficit before CPS made cuts to narrow it that deficit opened up largely because billions of federal covid dollars the district had used to beef up staffing expired earlier this month and the districts nine point nine billion dollar budget approved in August did not set aside dollars for the new teachers contract which is still being hammered out at the bargaining table Johnson criticized the budget plan which included the same amount of funding for schools but resulted in other cuts the district also did not include a one hundred and seventy five million dollar pension payment for non teaching staff that CPS began paying when Johnson's predecessor Lori Lightfoot was mayor Johnson opposed to the cost shift before he became mayor but has now asked CPS to continue paying it as he works to close a two hundred and twenty three million dollar deficit in the city's current budget and a nearly one billion dollar deficit projected for twenty twenty five Johnson was expected to deliver his city budget proposal in a speech to city council on October 16th but as cranes first reported Johnson delayed that budget presentation by two weeks it's now scheduled for October 30th a week after the school board is scheduled to meet the next school board meeting is one of a few remaining scheduled meetings before a new hybrid board is sworn in on January 15th before them Johnson's new appointees to the board could vote to approve a short term loan and to fire Martinez block club reported on Monday morning that a majority of the city's older persons are calling for a hearing into Mayor Brandon Johnson's handling of the school board situation as of Sunday forty one of fifty older persons signed a letter highlighting their concerns including members of the progressive caucus that helped to propel Johnson to victory in twenty twenty three according to block clubs reporting cranes sister publication automotive news reported that stellantis says the UAW has proposed reviving the jobs bank a defunct benefit that would continue paying laid off workers and has filed nine lawsuits against the union over its threats to strike the company said it is suing the union and twenty four local chapters around the US saying a strike would amount to a breach of contract stellantis filed the initial lawsuit against the UAW and local 230 in California on October 3rd and followed it with another eight lawsuits against the union and 23 locals on October 4th stellantis said it then denied an October 5th request by UAW leaders to restore jobs bank benefits for workers affected by the February 2023 idling of its assembly plant in Belvedere including about 900 people who have transferred to other states stellantis said in an October 7th statement quote the company rejected the UAW's latest proposal because it would revert to pre bankruptcy terms and conditions that would jeopardize the company's future their statement continued quote the company understands that this situation is extremely unsettling for its Belvedere employees which is why it agreed during 2023 negotiations to place these employees on temporary layoffs which provides 75% of pay in full health care benefits automotive news noted in reporting that the jobs bank adopted in the Detroit three in the 1980s quote generally prohibited Detroit automakers from laying off employees according to the statement from stellantis in the early 2000s Chrysler which is now part of stellantis had more than 2000 workers in the jobs bank at a quote staggering cost the company said workers in the jobs bank remained on active payroll but weren't allowed to perform any production work automotive news also noted that the lawsuits mark the latest chapter in the escalating conflict between stellantis and the union since they reached a new labor contract last fall stellantis is in the midst of a global cost cutting effort as it transitions to building electric vehicles that are costlier to produce than gasoline models the company's first lawsuit filed October 3rd against UAW local 230 in Los Angeles came after workers at a parts distribution center there voted to authorize a strike over the delayed plan to reopen the Belvedere assembly Tobin Williams stellantis's senior vice president of North American human resources emailed workers on October 4th saying the lawsuit would hold the UAW and local 230 liable quote for the revenue loss and other damages resulting from lost production due to an unlawful strike Williams said the union left stellantis quote with no choice but to take the necessary steps to protect the company and our employees automotive news further noted that the union has said more locals across the country could hold similar votes soon some started filing grievances against the company in August accusing stellantis of violating its product and investment commitments in the contract in addition to the Belvedere situation the grievances claim that stellantis is looking to move dodged Durango production out of the US stellantis called the complaints quote sham grievances in its lawsuit and said it's pushing back the timing of its plan to build a midsize pickup in Belvedere starting in 2027 but that it would uphold its commitment to reopening the plant it has not made any announcement about Durango production automotive news also noted that stellantis said it's not violated the terms of the contract saying its planned investments are conditional and subject to approval by the automakers product allocation committee the suit said that investment plans can change based on plant performance market condition changes and consumer demand that would allow the company to quote generate sustainable and profitable volumes the suit said you a w and its president Sean feyn have been on a campaign to force the planned investments regardless of business factors and without company approval feyn said in an october fourth statement quote stellantis made a contractual promise to invest in america and we are not going to let them weasel out of it his statement continued quote our members won those investments during the stand-up strike and we will strike again to make stellantis keep the promise if we have to Rivian Automotive has applied for a federal loan to fund construction of a new electric vehicle plant in Georgia a project that had stalled after a cash crunch and change in strategy Bloomberg reported that Irvine California based Rivian expects the facility to be partially operational by the third quarter of 2027 with full production in 2028 that according to a filing from the Department of Energy which said in the filing that no final decision has been made on Rivian's loan request it did not specify the requested loan amount or terms and the company declined to comment on friday when asked about the dollar value Bloomberg noted that earlier this year Rivian paused plans to build the Georgia plant saying it would instead launch its next generation vehicle the r2 from its existing facility and downstate normal the move allowed it to bring the higher volume product to market sooner and save 2.25 billion dollars in the process as it continues to burn through cash with heavy losses in 2022 Rivian secured a $1.5 billion package of state and local incentives the biggest in Georgia's history to build the massive plant outside Atlanta the company pledged at the time to create 7500 jobs by the end of 2028 winning praise from local lawmakers the news comes on the heels of Rivian slashing its production target for 2024 citing a worsening supply crunch at its plant in normal. Crane's John Asplund reported that Walgreens has agreed to pay the city of Baltimore 80 million dollars for its role in the opioid epidemic the city's mayor randon scott announced in recent days the deerfield based retail pharmacy giant will pay 45 million dollars by the end of 2024 and the remainder by December 31st of 2025 the city said in a press release the settlement is one of six that the city has reached in lawsuits against opioid distributors and manufacturers that quote caused the worst opioid epidemic in the nation for a total so far of 402.5 million dollars according to the release Asplund noted that Walgreens said in an emailed statement quote although Walgreens strongly disputes any liability the settlement is in the best interests of all of our stakeholders the statement continued quote we remain committed to the health and well-being of our team members customers and patients in Baltimore and across the country in addition to Walgreens Baltimore said it will recover five million dollars from abbe subsidiary allergan another 45 million dollars from cvs 152.5 million dollars from cardinal health and 80 million dollars from pharmaceutical company Teva the release also said that the city of Baltimore has yet to reveal the details of a recently settled lawsuit with Johnson and Johnson also noting that two distributors McKeeson and Amerisource Bergen have chosen to go to trial to defend themselves against Baltimore's lawsuits that trial began in September and is ongoing the release also indicated that the city of Baltimore will use the settlement in its entirety for opioid remediation Asplund noted citing opioid settlement tracker that pharmacy companies drug makers and distributors have faced opioid litigation for more than five years with the largest settlement being a multi-state opioid settlement framework with state local and tribal governments which put Walgreens on the hook for between four point nine five billion dollars and five point five two billion the tracking website also noted that of the other two of the big three pharmacies cvs and walmart agreed to settle their claims with cvs required to pay four point nine to five billion dollars and walmart pay two point seven to three point one billion dollars that's cranes daily gist for now check in on our continuous news feed at chicagobusiness.com thanks so much to today's guest cranes commercial real estate reporter danny ecker you can follow all of our conversations on apple podcasts spotify or wherever you like to get your audio on demand don't forget to subscribe and please rate and review cranes daily gist our show is produced by Todd manley at earsight studios i'm amie gooth thanks so much for listening and i'll meet you right back here next time
