The new proposal for the Fountain Square block initially looks like a trifecta — a winning ticket with something for everyone.
Fountain Square in a photo from last June.
Folks who like tall new buildings get a 49-story gleaming glass condo tower that would be the tallest in any Chicago suburb.
Preservationists get to see the landmark Hahn Building at midblock preserved — unaltered by the faÃ§ade-ectomy suggested in an earlier development proposal for the block.
And the public gets a new, enlarged civic plaza at the south end of the block, replacing the often-scorned Fountain Square building.
But developers Tim Anderson and James Klutznick aren’t proposing to fund the plaza expansion themselves.
They suggest that the city should use the new property tax revenue generated by the tower to pay for the plaza project instead.
And that has some downtown observers wondering whether the tower and plaza conceptsÂ really should be considered together.
No firm figures have been advanced about the likely cost of the plaza project. But just acquiring the Fountain Square building might cost $10 million or more. County records show it now carries a $4 million mortgage, and at $300 a square foot, the building’s replacement cost could easily be $16 million.
The city’s latest budget includes an estimate of $4 million just to rebuild the existing plaza, with no funding source identified.
And the plaza plan would remove property that now pays over $200,000 a year in property taxes off the tax rolls.
Aside from a small retail space for a restaurant at the north end of the expanded plaza, nothing in the plan would generate revenue to pay for plaza upkeep.
As a long-time observer of the downtown scene put it, “It’s one thing to use tax increment financing to tear down a crumbling parking garage and build a new one that will generate a stream of revenue from parking fees,” as the city did at Sherman Plaza, “but this looks like a very expensive park.”
The plaza plan also has clear benefits to the developers — eliminating the potential for another high-rise on the block that would limit views from the new tower and thus reduce its value, not to mention opening up views of the retail space in Sherman Plaza to shoppers approaching from the east.
The two projects combined would eliminate about 90,000 square feet of Class B office and retail space — 54,000 in the Fountain Square building and 36,000 at 708 Church. Those job-generating, taxpaying tenants may have a hard time finding other space they can afford downtown.
Even though Fountain Square clearly needs work, it’s not yet clear, the observer said, that it should soak up such a big chunk of public funds, even if the tower turns out to be a sound idea for the city.