Redevelopment of Chicago’s Union Station: Persistence pays off

By Chrissy Mancini Nichols

Dec 4, 2015

This post first appeared at metroplanning.org

To put it lightly, redevelopment of Chicago Union Station is a long-term passion of the Metropolitan Planning Council (MPC). Sitting in a prime West Loop location and seeing more travelers a day than Midway Airport, its spaces have largely been underutilized while it is at capacity. Without improvements to Union Station, the region stands to lose billions of dollars in potential economic development around the station.

But it’s more than just improving transit service at Union Station. Cities across the country, including Denver; Washington, D.C.; and San Francisco, have shown train terminals can be focal points for commercial redevelopment and promote new development in the surrounding area. For example, Washington, D.C.’s Union Station is a destination featuring several levels of retail and dining, a public plaza and bike sharing facilities, in addition to connections to rail. The neighborhood surrounding it has seen incredible population, housing and business growth over the past decade.

Similar to these stations, a transformed Chicago Union Station would be a catalyst for adjacent property development. In other words, the station should not only be an efficient rail hub, but also a truly great place.

MPC’s plan for the redevelopment of the station is big and our persistence is paying off.

Transportation improvements

Way back in 2010, work began the Chicago Union Station Master Plan Study. Led by the Chicago Dept. of Transportation, in partnership with Amtrak, Metra and other stakeholders including MPC, the Master Plan identified viable ideas for expanding capacity to add more trains at Union Station by repurposing platforms, improving passenger flow and allowing for better connections to other transit service.

Now many of the Master Plan recommendations are under way:

• Building an off-street Chicago Transit Authority bus terminal on the existing surface parking lot south of Jackson Boulevard, and providing more convenient transfers to transit authority trains as well as taxis and shuttles—Check—Union Station Transit Center
• Launching an east-west bus rapid transit service from Union Station toMichigan Avenue and eventually Navy Pier—Check—Loop Link
• Improving passenger flow and adding connections to other transit service—Check—This year Amtrak, Metra, the City of Chicago, Chicago Transit Authority and Regional Transportation Authority agreed to share about $5 million in costs for the preliminary engineering on 13 high-priority improvements, including expanding the lobby, new entrances at Adams and Madison streets and Jackson Boulevard, widening platforms with new elevators and escalators and tunnels to Ogilvie Transportation Center and the Clinton Blue Line station.

Station and adjacent land redevelopment

As chair of the parallel Civic Advisory Committee for the Union Station Master Plan Study and chair of a World Business Chicago strategy team looking for innovative infrastructure investments, MPC has been working to put Union Station at the top of regional leaders’ minds to ensure a renovation of this historic structure creates a destination that is much more than a place where people catch a train.

Our goal is to transform Union Station into a truly great place that is a vibrant destination, a neighborhood and city asset, and a catalyst for economic growth. Working with our transportation partners, we held events, brought in experts from across the country to learn from stations in D.C. and Denver and held an activate Union Station contest where winners built an indoor park in the great hall.

The results are in: Amtrak recently dedicated $14 million to build a new lounge that will double the space for first and business-class passengers, restore the skylight, upgrade heating and create banquet and event space.

The agency also issued a request for information for a master developer to design, build and finance "expansion opportunities" for all of Amtrak’s parcels in the West Loop—air rights over Union Station, use of vacant space in the current station and construction on several adjacent parcels.

Financing

While stakeholders have dedicated funds, there’s hundreds of million more needed to complete all of the transportation improvements. And that’s where MPC’s work on linking transportation and the adjacent development align.

Chicago Union Station could qualify for a Railroad Rehabilitation & Improvement Financing Program—a low-interest, $30 billion pot of untapped federal financing. But qualifying requires recipients to pay an upfront credit risk premium that, for a project like Chicago Union Station, could range in the tens of millions of dollars.

MPC worked with the City of Chicago, the Federal Railroad Administration and other leaders saw an opportunity to make the loan program more accessible for big projects. The result—Senator Durbin secured reforms in the FAST Act transportation bill that was approved by Congress this week. The reforms would allow recipients to use federal funds or other entities aside from the applicant to cover the credit risk premium and ensure that transit-oriented development at the station can be used as collateral for future loans. Senator Durbin fought for this provision in order to make this program more easily accessible for projects like Chicago Union Station.

But Railroad Rehabilitation & Improvement Financing Program is a loan, not a grant, so how do we repay it?

Denver will use future property tax revenues generated from development of land surrounding their Union Station to pay back a RRIF loan.

Amtrak’s movement on adjacent land development and the increase in property value around the station that would result could repay the loan. This type of innovative financing connects the benefits of an infrastructure investment with the costs to provide it and has been used to build and renovate Denver Union Station with a $145.6 million TIFIA loan and a $155 million RRIF Loan. Both loans will be repaid with future property taxes generated in the district surrounding the station.

MPC analyzed using this type of innovative financing to redevelop Chicago Union Station and supports SB277, a bill currently in the Illinois General Assembly, that would allow the City of Chicago to create a transit facility improvement area to help fund the Union Station Master Plan, by directing a percentage of the increase in future property tax revenues surrounding the stations to repay the loan.

Transformational investment takes big thinking and a willingness to keep at it. Chicago Union Station redevelopment is a great example of how MPC works—thinking ahead to prepare the region for the needs of tomorrow, proving the need to government, community and business leaders and being persistent to get it done.