(Above) Workers assemble windows in retail spaces along the Chicago Riverwalk east of Dearborn Street on December 23, 2014. (Click on images to view larger versions.)
Operator expected to hit the Riverwalk running, get events programmed by summer and help get $98 million DOT loan repaid.
7-Jan-15 With the opening of three blocks of the Chicago Riverwalk just four months away, the city is now deciding who the operator will be, but MB Real Estate Services, LLC, has a sporting chance.
Thats because the Chicago-based real estate company is the only bidder.
There was a single response to this solicitation, confirmed Cathy Kwiatkowski, Director of Public Affairs for the citys Department of Procurement Services, on Tuesday.
The city will identify the lone bidder only as Riverwalk Partners LLC.
Riverwalk Partners LLC was formed on October 9, 2014, one day before the Riverwalk bid was opened. Its principal office, according to the Secretary of State, is 181 West Madison Street, Suite 4700, the headquarters of MB Real Estate Services. The manager appointed to run the LLC is John T. Murphy, president of MB Real Estate Services.
28 people attended a pre-submittal conference at City Hall on August 20, 2014. They included representatives of Jones Lang LaSalle, Related Midwest, U.S. Equities Realty, and MB Real Estate Services.
Services provided by the company include asset and facilities management. They responded to a request for proposals that was advertised on August 6, 2014, and by November 13, 2014, according to City of Chicago records, had met with representatives of the Department of Fleet and Facility Management, or 2FM for short.
MB Real Estate Services did not respond to messages on Wednesday from Loop North News seeking confirmation.
(Above) Retail leasing diagram of the stretch of Riverwalk between State Street and Dearborn Street. Marina Plaza will have 4,700 square feet of exterior space for lease and development and 1,750 square feet of interior space in the arcade under Wacker Drive. Recreational boats will be allowed to dock there. (Below) The Cove will have 1,750 square feet of interior retail space at which only human-powered watercraft will be allowed to dock.
Being the only bidder does not guarantee anyone they will be awarded the contract. The city has the right to reject all proposals and issue a new RFP. But if selected, MB Real Estate Services would develop, promote, lease, build tenant spaces, program events, and operate the entire Riverwalk along the south bank of the Chicago River from Lake Shore Drive west to, eventually, Lake Street. Phase 2 of the Riverwalk, being constructed now, will connect State Street to LaSalle Street.
Retail space will be located under Wacker Drive on stretches of Riverwalk called Marina Plaza, between State Street and Dearborn Street, and The Cove, from Dearborn Street to Clark Street.
For River Theater, between Clark Street and LaSalle Street, proposals that include docking of water taxis, a restaurant boat, or other boat programming will be considered.
The mayor envisions a mix of recreational, cultural, entertainment, restaurant, and retail facilities along the Chicago River, reads the RFP, creating a vibrant Riverwalk used by residents and visitors alike.
(Above) River Theater, where water taxis and charter boats will dock, will have no retail space.
Money from Riverwalk concessions will help pay back DOT loan
The city is hoping that revenue from the Riverwalk will be enough to make payments on its $98.66 million loan from the United States Department of Transportation. The loan, tapped only as needed, has a fixed interest rate of 3.34 percent and will be repaid in equal installments every January 1 and July 1 through January 1, 2048.
Chicago has high hopes for Phase 3 of the Riverwalk, which will be constructed in 2015 and 2016 and include the longest of the blocks, between Franklin Street and Lake Street. The Boardwalk is intentionally the least designed section.
According to the RFP, the design of the area has been left very basic to allow for creative development ideas to maximize opportunities at this location.
The city will only be looking for ideas that provide for very significantly increased revenues.
Some revenue would come from advertising along the Riverwalk. 26 locations have been identified as potential advertising opportunities. A sponsor could buy out a specific area and the city says it might sell naming rights to all or part of the Riverwalk.
(Above) Diagram of what area in top photo will look like when finished.
Existing concessions no longer under Park District control
The new operator will take over for the Chicago Park District, which has been managing retail vendors on the completed Riverwalk between Lake Shore Drive and State Street since 2009. The Chicago Park Districts right of entry to the Riverwalk expired on December 31, 2014.
Five vendors that were on the Riverwalk east of Wabash Avenue last year will have to get a short-term concession license from the city to operate again this year. While the city says the new operator is welcome to sign existing vendors, new agreements are required and expected to be economically advantageous.
In 2013, the existing Riverwalk concessionaires collectively paid $1,081,303 to the city. From 2010 through 2013, the total was $4,903,505, according to the Chicago Park District.
(Above) Pie chart of how much each Riverwalk concession made for the city from 2010 through 2013.
The city is clear that operating the Riverwalk is not without risk. They might be flexible on terms, according to the RFP, like when the DOT loan is repaid, allowing the operator to start making money before the city gets a cut.