Townsend Capital will buy the shell of the chemical research building for $2.3 million and sign a 55-year ground lease with the university. As part of the deal, Townsend Capital will pay the university $2.1 million in rent up front, covering the first 10 years of ground lease payments. Illinois Institute of Technology also will be a first-floor tenant in the redeveloped building, committing to a 26,000-sf lease at $24 per sf.

Illinois Institute of Technology vice president for external affairs David Baker says the university spent two years looking for a local partner before connecting with Townsend Capital, which specializes in build-to-suit facilities, sale/leasebacks, and redevelopment, including research parks. "What attracted us to Townsend is they were working in a very similar community in Baltimore," says Baker, referring to a six-story, 120,000-sf building in the University of Maryland-Baltimore Bio Park.

While city assistance is paying for 26% of the $400 per sf redevelopment project, the result should be $16 million in new property taxes over the life of the TIF, according to the department of planning and development. The building is exempt from property taxes now, but will be on the tax rolls when Townsend Capital assumes ownership.