The developers of Bronzeville Lakefront Development, a proposed megaproject south of McCormick Place, have cut a tentative deal for a medical innovation center that’s tied to the largest hospital in Israel.
The group planning a huge mixed-use project just south of McCormick Place has landed an anchor tenant to kick off the first phase of the development: a medical innovation center founded by the largest hospital in Israel.
The ARC Innovation Center would open in the first building on the former site of the Michael Reese Hospital, part of a 15-million-square-foot development that could cost as much as $7 billion. The project’s developers, a joint venture led by Chicago-based Farpoint Development, aim to build an ARC-anchored health-science cluster that would spin out new biomedical technologies—and create thousands of jobs—by harnessing the collective power of the area’s universities, companies and entrepreneurs.
The focus on health will seep into all aspects of the project, which will include apartments, a community center, and retail and office spaces.
“We envision it being the healthy community of the future,” said Farpoint Principal Scott Goodman.
The ARC deal represents a key first step for the project, known as Bronzeville Lakefront Development, currently 100 mostly empty acres stretching from McCormick Place to 31st Street. Once considered a site for Amazon’s second headquarters, Bronzeville Lakefront exists only on paper right now, one of a group of Chicago mega-developments that could add tens of thousands of jobs and homes to neighborhoods ringing the central business district.
The developer of one of those projects, the 78 in the South Loop, also is betting on innovation, recently cutting a deal with the Discovery Partners Institute, a University of Illinois-led research center that will anchor the development. If they deliver on their promise, DPI and ARC could boost Chicago’s status in the tech world, lifting the region’s economy with growing companies and high-skill, high-paying jobs.
“This is a perfect example of where we can grow industries, where we can employ a lot of people in new jobs,” said Goodman, who estimates the project will create 50,000 construction and permanent jobs.
But the Bronzeville development will require a massive investment, including public dollars. Goodman estimates the infrastructure alone—roads, sewers and other government-owned structures—for the first phase of the project will cost $177 million. His venture has yet to nail down funding sources, but he said it may seek tax-increment financing, a controversial economic development tool, to cover the cost.
“TIF is definitely on the table,” he said.
ARC—which stands for Accelerate, Redesign, Collaboration—would occupy about 20 to 25 percent of a 500,000-square-foot building at the corner of 31st and Cottage Grove Avenue, on the south end of the site, that will kick off the first phase of the project. The first wave of buildings will also include senior housing, a community center and retail space, Goodman said. The development venture and ARC have signed a memorandum of understanding, but have yet to negotiate a final deal.
A rendering of a proposed redevelopment of Cottage Grove Avenue.
Farpoint’s venture—called GRIT, which stands for Global Research Innovation & Tourism district—includes five other partners: two local non-profits, the Bronzeville Community Development Partnership and Chicago Neighborhood Initiatives; two Chicago developers, Draper & Kramer and McLaurin Development Partners, and Chicago investment firm Loop Capital. The venture is teaming up on the health innovation center with Chicago-based Kaleidoscope Health Venture.
With its universities—including the University of Chicago, Northwestern University, the University of Illinois at Chicago and the Illinois Institute of Technology—Chicago has the academic and research chops to support a big health cluster, following in the footsteps of Kendall Square, the famed biotech hub in Cambridge, Mass., that has churned out biopharma pioneers including Biogen and Genzyme, said Kaleidoscope Managing Partner S. Bob Chib. But he also sees a big opportunity in Chicago to go beyond drugs and devices and focus on finding ways for people to lead healthier lives.
“That evolution from life sciences is evolving into a burgeoning health and wellness industry,” Chib said. “What we envision is really to build the first healthy community of the future.”
Sheba Medical Center, ranked the ninth-best hospital in the world by U.S. News & World Report, opened its first ARC Innovation Center last year next to its campus outside Tel Aviv. It aims to bring together top researchers, academics and companies to create and commercialize medical breakthroughs. The center is already working on projects to combat the coronavirus.
One promising area of exploration: creating “the hospital at home,” said Dr. Eyal Zimlichman, deputy director general, chief medical officer and chief innovation officer at Sheba. A push to create technologies to keep people out of hospitals could work well in a “health city,” offering opportunities to build smart homes with gadgets that track patients’ medical status and keep them out of an expensive hospital setting, he said.
The ultimate goal: Preventing people from getting so sick that they need to go to the hospital.
A rendering of a proposed redevelopment of 31st Street.
“The future needs to focus on that,” Zimlichman said.
Before it can break ground on Bronzeville Lakefront, GRIT needs a zoning change from the city and financing for the project’s first phase. Goodman, who aims to begin construction in 2021, has one financing edge: The Michael Reese site sits in an opportunity zone, part of a federal program that provides tax breaks to investors if they back projects in blighted areas.
This news originally appeared in Crain’s Chicago Business.