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$98 million taxpayer subsidy through tax increment financing is set to boost the redevelopment of 135 South LaSalle Street in Chicago's Loop into a mixed-use space with residential, retail, and a grocery store. The project, developed by Riverside Investment & Development, DL3 Realty, and AmTrust RE, will transform the historic 45-story building constructed in 1934 into 386 apartments, including 116 affordable units. The building has been mostly vacant since Bank of America relocated in 2021, leaving it over 80% empty.

    The conversion will add 92,000 square feet of retail space, with a grocery store serving as a key amenity for residents and the surrounding area. Market-rate apartments are expected to rent for $3.55 per square foot. The proposed TIF funds cover 40% of the project's $241 million cost, part of the LaSalle Street Reimagined program aimed at converting underutilized office buildings into residential and mixed-use properties.

    The city's investment in this type of conversion is seen as critical to restore vitality to the area, given the record-high office vacancy rate. The downtown Chicago vacancy rate was 25.8% in the third quarter of 2024, up from 13.8% at the start of the pandemic. If approved by the Chicago Community Development Commission next week, the project will move closer to a formal City Council vote and construction can begin.

    Supporters praise the allocation of tax-increment financing funds to introduce new uses in the Loop, while critics raise concerns about using public resources for revitalization efforts. Other office-to-residential projects are underway or awaiting approval in the area, including Campari Group's project at 79 West Monroe Street, which has already gained full City Council approval.