The City of Chicago’s Community Development Commission approved more than $30 million in Tax Increment Financing (TIF) funds for a redevelopment project in the historic Central Manufacturing District at 1769 W. Pershing Road, Chicago.
As previously reported here in the McKinley Park News, a proposal from the IBT Group LLC won the 2023 selection in a process that included pitches from three finalists to develop the city-owned site, which includes both a massive historic warehouse and adjoining parking lot and vehicle shed at 1717 W. Pershing Road, Chicago.
Mixed Uses
Operating under the corporate entity Pershing 1769 LLC, the IBT Group intends to develop the site for mixed use, including more than 230,000 square feet of office and laboratory space in the basement and bottom floors of the historic warehouse, and 172 residential units on the building’s top floors, capped by a rooftop garden.
Presented at the March 7, 2023, community meeting hosted by the Chicago Department of Planning and Development, an architect's rendering displays the rooftop and Chicago skyline as envisioned by prospective developer IBT Group.
The adjacent property would see the vehicle shed demolished and replaced with a 42,000 square foot retail center with 144 parking spaces. Twenty percent of the development’s residences would be provided as affordable housing.
Rising Costs and Funding
The city’s development commission approved TIF Developer Designation for the project at its July 8, 2025, hearing. In addition to increasing the proposed amount of TIF funding from the original proposal, the overall development cost of the project has risen to $186 million from its original $121 million cost.
The commission’s July 8 resolution formally authorized the city to negotiate a redevelopment agreement and land sale to 1769 LLC.
Funding Sources and Use
The project’s Staff Report to the Community Development Commission details many elements of the project, including design by the Epstein architecture firm, contracting by Arco Construction Company and financing provided by global asset manager PGIM.
Charts from the staff report detail the financial structure of the redevelopment project, including where project funding comes from and how it will be used:
| Sources | Amount | Percent of Total |
|---|---|---|
| Equity (developer) | $22,195,613 | 11.9% |
| Senior Loan (lender) | $93,427,172 | 50.2% |
| C-Pace | $16,462,798 | 8.8% |
| Federal Historic Tax Credits | $23,784,209 | 12.8% |
| TIF Funds (city) | $30,175,000 | 16.2% |
| Total Sources | $186,044,792 | 100% |
| Uses | Amount | Percent of Total |
|---|---|---|
| Purchase Price | $10 | 0% |
| Acquisition Cost | $100,000 | 0.1% |
| Hard Cost | $108,209,098 | 58.2% |
| Tenant Improvements | $26,243,430 | 14.1% |
| Soft Costs | $20,815,418 | 11.2% |
| Contingency | $11,861,681 | 6.4% |
| Interest Reserve | $15,536,860 | 8.4% |
| Financing and Closing | $3,278,294 | 1.8% |
| Total from Sources | $186,044,792 | 100% |
Great Assets
Both 12th Ward Alderwoman Julia Ramirez and the McKinley Park Development Council submitted letters advocating for the IBT Group’s redevelopment of the site.
“I’m pleased with the outcome as the addition of affordable housing, retail and commercial space, all while preserving the historic integrity of the building, will be great assets to the 12th Ward and McKinley Park neighborhood,” Ramirez wrote in her support letter.
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