Ald. Beale may stall West Side Costco project
By Fran Spielman City Hall Reporter/fspielman@suntimes.com March 8, 2011 1:38AM
Updated: August 4, 2011 4:20PM
An influential alderman is threatening to hold up construction of Chicago’s second Costco warehouse store to protest an earlier land swap that spared a Little League field, but will now deprive the city of $1 million in annual rental income.
Two years ago, the Daley administration agreed to trade 78 city-owned parcels on the Near West Side to the Illinois Medical District. In exchange, the district gave the city a 1.23-acre park at Polk and Leavitt that allowed hundreds of kids to keeping playing baseball at Livingston Field.
Most of the vacant city properties were located in the 1300-to-1500 blocks of South Ashland. The land amounted to 245,000 square feet — three times as much space as the park encompasses.
Now, the land the city gave away is targeted for Chicago’s second Costco, at 14th and Ashland. That means the Illinois Medical District — and not the city — will benefit from the Costco lease.
“The city giving away land and someone [else] profiting is totally unacceptable at a time when we’re having huge budget deficits,” said Ald. Anthony Beale (9th), chairman of the City Council’s Transportation Committee, which deferred action on a pair of street closings needed to pave the way for the $48.5 million development.
“Even though the medical district is a not-for-profit, they’re gonna be making $1 million [a-year] off of it. There needs to be some compensation to the citizens of Chicago for that. It doesn’t have anything to do with Costco. It’s just a matter of the city conveying land, then somebody else conveying it and making $1 million-a-year. That’s just unheard of.”
Mark Jamil, an attorney for the Illinois Medical District Commission, refused to comment on Beale’s objections.
Molly Sullivan, a spokeswoman for the city Department of Community Development, said the issue is “more complex than merely which entity receives revenue from a lease” with the proposed Costco store.
She noted that the former city land is “just a piece of a much larger parcel” owned by the Illinois Medical District and now being leased to Costco.
“As a result of the land swap, the [district] lost valuable land that it could lease to pay off bonds needed for capital projects ... that help further its mission as a world-class medical research district that also provides good-paying jobs. IMD is relying on the Costco lease to recover that lost revenue,” Sullivan said in an e-mail to the Chicago Sun-Times.
Sullivan noted that the new Costco is part of a larger master plan that calls for medical research north of Roosevelt Road and more commercial development on district land to the south.
“The city believes there are many benefits to the Costco and future commercial development in the same area. These kinds of projects will bring new jobs, property taxes on land not currently on the tax rolls, as well as sales tax,” she said.
Costco’s only Chicago store is located at 2746 N. Clybourn in Lincoln Park. The second store is expected to create 600 construction jobs, 125 full-time jobs and 125 part-time positions.
The Daley administration has proposed a lucrative property tax break that will save Costco $1 million over a 12-year period. But, the project is expected to generate $27 million worth of local taxes during that same period.
The land swap stemmed from a squabble that began in 2007 when the Illinois Medical District sought to develop the field as a biotech facility.
League founder Bob Muzikowski balked at leaving the field, noting that volunteers had pumped $200,000 into it to add sprinklers, dugouts and other features.
The district subsequently sought to recoup at least $1 million spent drafting plans to develop the site.
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