At the end of April, the owners of a former Chicago Sun-Times printing plant announced an agreement with QTS Realty Trust Inc. to develop a Chicago data center at the facility.
The building, which originally closed in 2011, was set to be purchased by another buyer last year, but the deal collapsed, allowing the owners of the newspaper printing plant to pursue other options. QTS Realty Trust Inc. is paying between $17 and $19 million for the structure, located on the south side of the city, Chicago Real Estate Daily reported.
Space for future expansion
Once the details of the agreement are finalized and if everything goes as planned, QTS Realty Trust will leverage the new property for a new Illinois data center. The site, situated in close proximity to the Chicago River and Interstate 55, attracted interest from other prospective buyers as well due to its 30-acre footprint, which would allow for the establishment of another structure beside the former printing plant.
TIF repayment challenges
While the deal seems to be on track, there are some challenges that still need to be addressed, including the repayment of tax-increment financing funds. When the Sun-Times printing plant was first being developed in 1999, the city granted the property owners $7.5 million in TIF capital to help with the establishment of the $100 million structure. The city leverages TIF funds to spur public and private investments in a range of projects to bring underutilized properties back to productive use.
When the property first came onto the market and other organizations expressed interest, the Chicago City Council approved an ordinance that would enable the owners to sell the plant without repaying the TIF funds. However, city officials may decide to pass another ordinance that would call for QTS to cover the repayment, or if the transaction would take care of this matter as it stands.
Currently, owners of the printing plant are declining to comment on the TIF funding repayment.