The 78 Development in Chicago: Quick Facts

 In Hotel Construction, Mixed Use, New Construction, Projects over 1 Billion

Related Midwest’s megadevelopment in Chicago, known as The 78, is a mixed-use project expected to provide 10 million square feet of residential, office, hotel and retail space.

Following are answers to common FAQs about the project and our most recent podcast on The 78’s key players and project details.

Read ahead for the quick rundown.

The 78: FAQs

Where is The 78 development in Chicago?

The 78 is a 62-acre project in Chicago bordered by the south branch of the Chicago River, Roosevelt Road, 16th Street and Clark Street.

Who is the architect responsible for The 78 development’s master planning?

Skidmore, Owings and Merrill (SOM)

What will The 78 development in Chicago look like?

Here is one of many renderings for The 78. Others are available via the
Related Midwest website.

Why is The 78 called The 78?

This project name is a nod to what would be the 78th neighborhood within Chicago’s city limits.

What is the project value for The 78?

The 78 is expected to be a $7 billion dollar project.

How much in TIF funding will this project receive?

The 78 will receive $1.1 billion dollars in TIF funding for the project

What is the timeline for the 78 development in Chicago?

The exact timeline for the entire project is unknown as it will be constructed in phases.

The project could take close to two decades to complete.

Related Midwest started phase one of the project with the Wells-Wentworth Connector construction in June 2019.

What is the Wells-Wentworth Connector?

The Wells-Wentworth Connector connects downtown Chicago with south side neighborhoods like Pilsen, Bronzeville and the South Loop.

It is an infrastructure improvement dedicated to The 78 development in Chicago by developer Related Midwest.

Podcast Transcript

Luke O’Brien: Hello listeners, and welcome to the sixth episode of the ConstructionWire podcast.

Remember that this is a podcast that twice a month takes the blue pencil to the biggest news in the construction market and makes it accessible to you.

I’m your host, Luke O’Brien, and as always this podcast is made possible by BuildCentral, the Chicago-based front runner in construction market research whose data keeps you ahead in the game and knowledgeable to every opportunity available, whether you are a vendor, supplier, contractor, or developer.

Now, if you missed last week’s episode, episode number five, we spent the entire time discussing Lincoln Yards, the $5 billion Chicago mega development being spearheaded by Sterling Bay, one of Chicago’s most prolific real estate owners and developers.

And while Lincoln Yards stands to envelop over 50 acres of prime Chicago riverfront, it’s not the only project poised to change the face of the city, not by a long shot.

If you were listening to last episode, you’ll remember that we name dropped another Chicago project off the cuff, a project called The 78, being developed by The Related Companies out of New York.

Now, if you’re in the industry, The 78 should ring a bell, a big one.

Chicago right now has 77 distinct community areas or neighborhoods all unique in their own way, beautiful in their own right. The 78 aims to be the next one.

A whole new neighborhood, again, on the river, right in the middle of downtown, and we at BuildCentral and the ConstructionWire podcast have been keeping a close eye on the 78 since 2016.

And after researching and reporting on Lincoln Yards, we couldn’t pass up the opportunity to do an episode on The 78 as well.

So here it is, in continuation of our deep dive in the Chicago mega developments, everything you want to know and everything you need to know about The 78 and its developer, The Related Companies.

Let’s take a look.

Now, before we jump headfirst into this episode, I wanted to give you all a brief roadmap of what we’ll be discussing today.

This episode is dense. It covers a lot of ground in 30 minutes, and I believe that it will be useful to you, our audience, to know first where we’re going before it feels like we’re taking too many left turns.

So just briefly, here is the overview of today’s episode, episode six.

We’re going to first start out discussing what The 78 is.

Essentially how it is intended to be a mixed use development used as a connector between otherwise fairly disparate Chicago communities, and also how it will be an opportunity for some of those communities to continue to grow and to flourish in their own right.

We’ll actually discuss some of the specific ways Related Midwest is enabling the surrounding communities to participate in The 78’s expansion and how The 78 will inversely be creating new jobs, new community programs, and actual physical spaces that foster a sense of community as a whole.

Moving on from that, we’ll be looking at one of these physical spaces in particular, the planned Discovery Partners Institute as it’s known, and the details behind what that portion of The 78 will be.

And then following that, we’ll be taking a look at the master plan of the whole 78 development, the planned roadworks, the park space dimensions, the plans for the river walk, et cetera.

And closing out today’s episode, I will be taking a look at the Related Companies themselves, the developers behind The 78 and their own history, and will also be giving you all a quick sneak peek at the latest status of two of their other big projects at the end of this show.

So stay tuned for that as well.

So what is the point of The 78? I think that’s a good place to start. Why do we need it? How will Chicago benefit from it?

Well, between Roosevelt Road, Clark Street, 16th Street and the Chicago River lies a 62 acre parcel of undeveloped land, a giant rectangle just sitting there.

Surrounding this giant parcel are a number of vibrant communities, some of the most vibrant in Chicago, of the South Loop, home to the museum campus.

That includes the planetarium and the Shedd Aquarium.

Bronzeville, a historically significant neighborhood with amazing examples of Victorian era architecture, it’s an incredible place just to walk through.

And also Chinatown and Pilsen, both culturally significant areas that are home to large communities of both Chinese and Latino immigrants, respectively.

And at this juncture, this potential way point between these communities is this empty parcel of land.

Yes, it is on the river.

Yes, it is just south of the Magnificent Mile, and yes, it is just west of Lake Michigan, but it’s an eyesore.

It’s an old rail yard that has been vacant for decades.

And you know, the common first thought when one sees the site of the proposed 78 is that it needs a face lift, especially looking at it from an aerial perspective.

You can type in “The 78 Chicago” into Google and you’ll see a number of pictures just like this, and you’ll see exactly what I mean.

It’s actually hard to describe just how strange the site is, really.

It is right downtown, albeit a little south, but you can see the Willis Tower, one of the architectural symbols of Chicago, so to speak, just a few blocks north, directly in front of this empty area.

It is odd to see that much vacant space in such an otherwise built out metropolitan area.

Now, the proximity of this site to the South Side of Chicago should be noted. If you’re not personally familiar with Chicago as a city, the South Side as a neighborhood has long been portrayed in the media as a quote-unquote “struggling community,” if that is the right word, and a community in need of neighborhood rehabilitation.

It does suffer from a high crime rate, a high unemployment rate, food deserts, the like, all of which are symptoms of larger social and political issues that Chicago as a whole has suffered from for a long time, but of which we will not be covering in depth here.

So that being said, being close to the South Side, what does that mean? Well, a lot of the articles that you’ll find about The 78 keep the explanations simple.

Even on the Related Midwest websites, that is to say the developer of The 78’s website, Related Midwest is just the Midwest development, or excuse me, the Midwest division of The Related Companies, they keep it modest on their website.

If you go to www.relatedmidwest.com and look under the properties tab, you will find a section on The 78 and I will quote from it.

Quote, “The 78 will knit together the surrounding neighborhoods of the South Loop, Chinatown, Bronzeville and Pilsen by creating new bike lanes, walking paths and waterfront access, helping to build a connection between Downtown Chicago and Chicago’s South Side,” unquote.

Now, that is the geographical physical connection that they’re describing there, but the connection has to be more than that.

For a development like this to gain public support in Chicago and to move forward in such close proximity to the South Side there, there have be hedges against full on gentrification.

The 78 was never planned to be, nor could it have been planned to be, the downtown of Chicago simply extending itself further into the South Side. That never would have worked.

It never would have gained public support.

So what The Related Companies, or rather Related Midwest had to do and is continuing to do, is make inroads to the South Side community before starting the development to show that The 78 is not just another pretty riverfront Downtown gentrifying project, but rather an opportunity.

And I think this idea is best captured in an article by Megan Nakano that appeared in the Spring 2019 edition of the Chicago MSDC Magazine.

That would be the Chicago Minority Development Supplier Magazine, and I will quote at length from her article here, because I think she does such a good job of explaining what I am failing to do.

Quote: “Many of the suppliers at The 78 will employ currently unemployed residents of the South and West Sides, where some neighborhoods suffer from 20% to 40% unemployment.”

"Many of the suppliers at The 78 will employ currently unemployed residents of the South and West Sides, where some neighborhoods suffer from 20% to 40% unemployment." Click To Tweet

The 78 and the companies in its supply chain have the potential to keep individuals or to help individuals get back on their feet after serving time, and to help more Chicagoans avoid the path of crime that is so tightly correlated with joblessness.

The 78 also has the potential to course correct a current trend that has brought tremendous prosperity to Downtown and The Loop, but left out these surrounding neighborhoods.

As major corporations reverse years of relocation to the suburbs and return to Downtown Chicago, the Central Business District has thrived. Now with the development of The 78, some of that prosperity might finally spread throughout the city to the smaller businesses and neighborhoods that need it.”

Now, that is the broad overview of The 78 potential to revitalize businesses and communities in and near the South Side. And you might think, “Well, that’s all well and good, but is it actionable?”

Or rather, “What is Related Midwest actually doing to curb joblessness, and by extension curb future crime?”

Well, Megan Nakano in her article further explains some of these specifics. To quote further, “The company created a community inclusion council, or CIC, of the region’s leading businesses, community and civic leaders, to implement programs, monitor progress, and establish best practices that will serve as a model for the industry.”

"The [Related Midwest] company created a community inclusion council, or CIC, of the region's leading businesses, community and civic leaders, to implement programs, monitor progress, and establish best practices that will serve as a… Click To Tweet

To quote finally from this article by Megan Nakano, “Furthermore, Related Midwest has also committed to opening a dedicated resource center where business owners and residents can receive valuable business support and resources, get technical assistance, have access to coworking space, and learn about contracting and career opportunities.”

"Furthermore, Related Midwest has also committed to opening a dedicated resource center where business owners and residents can receive valuable business support and resources, get technical assistance, have access to coworking space,… Click To Tweet

And you know, when you actually hear the length to which Related Midwest is working to get the surrounding communities involved with this project and to see it as an opportunity, The 78 takes on a whole new light, a very communal and open light.

Now, what does an open communal development actually look like? How is it landscaped to elicit a sense of welcoming and opportunity?

Well, before I actually discuss how these 62 acres will be utilized in their entirety, I would like to turn your attention to one of the biggest attractions being proposed for The 78, the thing that is really the focal point of this targeted effort to create a communal neighborhood, and that thing is what they are calling The Discovery Partners Institute.

Now, the proposed Discovery Partners Institute would be a University of Illinois affiliated education center located within The 78, and we at BuildCentral, we’ve tracked and researched a number of these kinds of institutes and innovation centers over the years, and their express purpose is always a little amorphous, although in essence they are essentially think tanks.

And in a March 2018 article in the News Gazette by Julie Worth, she describes the Discovery Partners Institute, or DPI for short, as such. Quote, “The Research Center would bring faculty and students from the UI and partner universities together with industry to spur innovation,” unquote.

So again, a little vague, but you get the idea. And I should make clear that this is not a new idea for The Related Companies. Adding some sort of innovative cultural think tank space to a large development like this is something that they make a point to do.

It’s actually something that sets them apart from other developers. Immediately what jumps to mind is how they took the same approach to the Hudson Yards project in New York, and if you are familiar at all with The Related Companies, of course you will be familiar with the Hudson Yards project.

It is a 20 to 25 or so billion dollar behemoth under construction as we speak. It’s easily top two or three biggest projects in the United States right now. It might even be the biggest.

But regardless, within the Hudson Yards project, Related made it a point to build what is called The Shed. The Shed just recently opened, I think back in April of this year, and it is a cultural center that both produces and showcases performance and visual art.

It has beautiful dramatic architecture done by Diller Scofidio and Renfro, a firm themselves based in New York, and then it initially drew some public outcry but it has really since ingratiated itself into the community as an innovative cultural center and that is really what Related Midwest is now replicating here at The 78 with their proposed Discovery Center Institute.

Now, much like I discussed in our last episode, episode number five about the Lincoln Yards project, when a new politician in a large metropolitan area like Chicago gets elected, plans for project like The 78, which were thought to have been solidified under the previous administration, all of a sudden are now put under the microscope again and re-examined in terms of their viability.

This is what happened to the Discovery Partners Institute when Illinois’ new governor, JB Pritzker, was elected in November of 2018.

And essentially what JB Pritzker has determined needs to happen in order for the DPI to move forward, that is, in order for him to willingly provide the $500 million in state funds for the project that are needed, the University, or the University of Illinois, must first come up with $500 million of their own funding for the project, and they have to have that sum ready before any of the state funds are released.

That is the condition, and that was definitely a curve ball thrown and has shed some doubt about the future of the project. But you know, perhaps not insurmountable. Only time will tell.

So besides the Discovery Partners Institute, what is The 78 anticipated to look like upon completion? What will it feature?

Well, we tracked down the proposed plan development of The 78 that was presented to the Chicago Plan Commission Department of Planning and Development back in November of 2018, and it is impressive.

I’ll start by listing some of the features, sort of bullet point style. In terms of roadwork, they’re looking at extending Wells Street, a major Downtown Chicago throughfare, and they’re going to extend it in order to connect it to Wentworth Avenue to the south, thereby creating a new physical link between Downtown and Chinatown.

They are looking at creating a new half mile walkable tree-lined promenade along the side of the project site that touches the river.

That would be on the west side of the project, and they also plan on beefing up and rebuilding the river wall on that side as well.

And I believe a new 15th Street, brand new 15th Street will be built east to west, perpendicular through the center of the 62 acre parcel in order to connect Clark Street to the east to the newly extended Wells Street that I just mentioned, in order to allow public or direct public access to the river.

And right in the middle of the rectangle shaped site, they’re looking to build out what they are calling Crescent Park, and this is exactly what it sounds like.

It will be a crescent shaped, open spaced park that will act as the walkable gateway to and through the vertical developments being planned around it.

And the current estimate, I think, of the Crescent Park size is around a 275,000 square feet in total, but remember, that is not counting the additional 133,000 square feet of open, walkable river walk either.

All this space, all this sort of open park space amounts, I think, to about 11 acres.

Now, what else is being planned?

Well, as reported by Curbed Chicago on August 15 of this year by contributors Ryan Smith, Jay Koziars and Benjamin Van Loon, quote, “The 78 is zoned for 13 million square feet of buildings summarizing as high as 950 feet into the air, housing 10,000 residential units and 24,000 workers.”

"The 78 is zoned for 13 million square feet of buildings summarizing as high as 950 feet into the air, housing 10,000 residential units and 24,000 workers." Click To Tweet

Further down in the article as well, they say, quote, “and a $300 million Red Line station at the corner of Clark and 15th Streets.” Now, the new Red Line station is a big deal.

The Red Line is the main north to south line in the city. It is the most used line. It’s the biggest train line, and I think transports an average of a quarter of a million people a day on it.

So adding a new Red Line station has definitely made a splash as well. That’s a big focal point for The 78.

Now, we don’t have too many details about what the actual vertical buildings within The 78 will be, aside from the proposed Discovery Partners Institute.

But it is safe to say that they will be looking for big corporate tenants.

The proposed plan development that we discussed earlier outlined how the buildings will likely be primary facade focused.

That’s oriented towards the main streets. The renderings show lots of glass, very open and airy, and then very active ground floors, retail, all of that.

You will be able to walk through Crescent Park and window shop while you do it, if you so choose.

And we will make sure to include a accessible link to the proposed plan development, you know, the actual plans, in the show notes. So go ahead and check those out if you guys would like as well.

So what about The Related Companies? Who are the men and women who will actually be developing The 78?

Well, as of 2019, they’re probably most well known as the developers behind Hudson Yards.

The, as I mentioned before, enormous mixed use development that they’re doing on site of the eastern rail yards in New York. It is actually billed as the largest private real estate development in United States history, as I have just found.

It is too difficult to get sucked down the rabbit hole of that project, so I will abstain from doing so, but I would like to point out one interesting fact.

Skidmore, Owings and Merrill, the architectural design firm who handled the master planning for The 78 here in Chicago is also handling some of the architectural and engineering work on a number of buildings going up at Hudson Yards.

And not only that, but they also handled the master planning for Lincoln Yards as well.

That was our last week’s project that I keep harping on. And as I said then, they’re very prolific, especially in terms of these huge city within a city projects, and for master planning them.

But anyways, back to The Related Companies. They were founded in 1972 by a gentleman named Stephen Ross.

You might be familiar with this particular individual. He remains the chairman and majority owner of The Related Companies and he is worth over $7 billion according to Forbes.

I think the exact figure or most recent estimate is $7.7 billion, and he is the 95% majority owner of the Miami Dolphins as well, and has recently started a drone racing league, or rather The Drone Racing League, which is exactly what it sounds like.

And through the 1970s, again, he started in 1972, through the 1970s and 80s he really helped grow the company exponentially.

You can actually find a timeline of this growth on the related.com website and it outlines how in the 80s they moved into the luxury residential market as well as opened the Related California location.

However, it was in the 1990s, specifically on July 28, 1998 that The Related Companies really exploded.

They ended up winning the bid that day for the Time Warner Center project that was set to go up in Columbus Circle in New York. They had bid $345 million on it. The rest is really history.

Time Warner Center opened in October of 2003 and The Related Companies is now headquartered there.

I believe they actually just refinanced on their offices at Time Warner earlier this year to the tune of just over a billion dollars. I think that was March or May of this year that they refinanced.

It honestly is a bit daunting talking about a company like Related. They are truly expansive. At this very moment, BuildCentral is tracking around 99 projects that they are involved in that are either in planning or under construction, and that is east coast to west coast.

At the moment, I think Related Santa Clara definitely stands out. That is a new mega development they’re planning in Santa Clara, California.

And if you’re not familiar with the name of the project, that’s likely because it was only recently changed from City Place Santa Clara to Related Santa Clara.

That was a recent name change, and it’s expected to be around a 9.2 million square foot mixed use development on a 239 acre site, and our data at BuildCentral reveals that it should be breaking ground on its first portion sometime early next year, first quarter of 2020.

They are also in the process of closing on a recent land sale in the town of Miramar, Florida, in order to develop the new Miramar Town Center project that is expected to include over 300 apartments, a mixed use building, tens of thousands of feet of retail, the works.

They’re in the process of securing development approvals for that as well.

And I believe that that is all that we have time for today. Thank you, everyone. I hope you enjoyed the show. We will be back with more content, news and discussion about the world of construction soon.

But in the meantime, if you could hit the subscribe button on whatever podcast platform that you’re using to listen in, whether it’s Apple Podcast, Google Play, Stitcher, or whatever else, and give us a follow, that would be amazing.

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We love to see that, and thanks again for listening to the ConstructionWire podcast, brought to you by BuildCentral construction data, covering new projects in the commercial, hospitality, medical, and multifamily construction spaces.

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Matt Holmes
Matt has been at BuildCentral since 2018 and oversees the marketing function at BuildCentral. He has his Bachelor's Degree in Electronic Media Sales & Management from Ball State University and has been in customer acquisition for over 20 years serving the broadcast communications, hospitality, e-commerce and AEC disciplines.
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