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$50M Building Overhaul to Kick Off Tech Park Plan

CHICAGO-The $400 per sf gut rehab of the Illinois Institute of Technology's chemical research building is the first phase of an envisioned $200-million technological park on the South Side campus.

By Mark Ruda | Updated on June 15, 2005

CHICAGO-Towson, MD-based Townsend Capital, LLC is redeveloping a 126,000-sf building at the northeast corner of 35th and Federal streets, the first phase in what could eventually be a $200-million technological park on the Illinois Institute of Technology’s South Side campus. The renovation of the university’s historic chemical research building is expected to cost $50.4 million, with tax increment financing offsetting up to $13.4 million of that.

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.

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