Gov. Bruce Rauner and the University of Illinois are pursuing a sprawling innovation center in the South Loop with two other research universities, but the project’s backers have yet to forge a political consensus and a lack of detail about how it would be funded has created uncertainty about the project.
Rauner is backing the University of Illinois-led Discovery Partners Institute, a public-private facility for conducting specialized research in an array of fields, including computing and big data, food and agriculture, and health and wellness.
The center, which is to be announced officially on Thursday morning, is intended to bring together academic faculty, students and companies to collaborate on research and to parlay that work into new products and companies, U. of I. President Timothy Killeen said.
It would also give the state’s flagship public university, the Urbana-Champaign campus, a prominent footprint in Chicago — a long-held goal — and bring it closer to the city’s most prestigious private institutions. Northwestern University and University of Chicago have committed to become partners in the new center, school representatives confirmed.
“What if we formed more collaboration with those universities and created a dense network of students, faculty and research; and encouraged them to form businesses, connect them to the university, and give them the rights and ability to take their research and their technology and commercialize them, and develop products?” Rauner said in an interview last week. “We thought that would be a major magnet to keeping and growing the Illinois economy.”
Killeen said the university wants to recruit 90 new faculty members and up to 1,800 students to the center, whose total cost has not been finalized but potentially would attract hundreds of millions in investment. No opening date has been set, but a location has emerged in the South Loop on highly coveted land to be donated by the development company Related Midwest.
“It’s an attempt to really take advantage of the assets that the state and the city have to accelerate economic development and to provide opportunities for our students to stay in the state and for innovations to flow into our economy,” Killeen said.
But even as the governor and universities press ahead, many details of the project remain unclear — including whether, or if, state and city dollars would be used to get the institution up and running.
Already, the proposed project has become the subject of political battles.
Rauner said project leaders have secured numerous commitments for private funding, though the governor would not identify those donors or reveal how much they planned to contribute. The governor also identified a source of public funding for the project — the sale of the Thompson Center in the Loop, but that deal faces many hurdles.
Last week, Rauner said he planned to use proceeds from the sale of the Thompson Center to help finance the institute. Rauner has said unloading the 1.2 million-square-foot building would fetch $300 million, though the state would have to pay around $60 million off the top to buy out the leases of the current tenants.
Rauner also said that though he was seeking some public funding for the initial stages of the work, over time he expected the institute to be primarily funded through private dollars.
Steve Brown, spokesman for House Speaker Michael Madigan, said Tuesday that legislative leaders were in talks about the institute but denied there had been any such accord, “in part because there was sort of a lack of detail about exactly how the state funds might be utilized.” Brown also said the Thompson Center profits are incorporated into this year’s state budget, comprising a large chunk of new revenues.
“The money has been accounted for in the current state budget, and there is no agreement, verbal or otherwise, to support state funding for this institute,” Brown said.
That pool of money isn’t exactly earmarked for the state budget either. The bill allowing the sale of the Thompson Center has been hung up in political wrangling and has yet to be sent to the governor’s desk.
Representatives for Senate GOP Leader Bill Brady and House GOP Leader Jim Durkin both said the lawmakers supported the concept but were awaiting more details from the governor’s office. They did not say whether they supported devoting profits from the Thompson Center to the project. The office of Senate President John Cullerton, a Democrat, did not respond to a request for comment.
Rauner’s office later appeared to soften on its intent to use the Thompson Center money. This week, his office provided a statement saying that the governor hoped Thursday’s announcement would help spur private fundraising and that the governor “is hoping to persuade state and local officials to contribute public funds to the program as well.”
“Right now, how much would be needed is still undetermined,” the statement read, omitting any reference to the Thompson Center.
Any agreement about the Thompson Center would represent an extraordinary truce over an issue that has put Rauner, Madigan and Mayor Rahm Emanuel at odds. They have traded jabs for months, accusing one another of being the main blockade to the sale.
Partially at issue are city zoning codes that restrict the amount of square footage upon that can be built on the property. Rauner’s office projected the land could hold 4 million square feet of development and argues that the option for a developer to use all of that space is crucial to getting a top price. Current zoning laws only allow for only 1 million square feet.
Rauner also said in the interview that Emanuel’s office had agreed to “help us” with the zoning dispute and would seek City Council approval to use $100 million in cash for the institute. A spokesman for Emanuel did not respond to a request for comment.
The public unveiling of the project comes on the heels of a bruising summer for the governor in which the Democratic-led legislature overturned his veto to end a two-year budget impasse and as he prepares to seek re-election in 2018.
It also comes as the Chicago area formally makes its pitch to land the second Amazon headquarters, a highly sought development that holds the potential of bringing thousands of jobs to the area. Rauner said that the innovation center was not specifically related to the Amazon wooing, but said the institute’s offerings are exactly the type of thing that entices companies to set up shop.
Rauner said the research institute could create thousands of career opportunities in the state over the next five to 10 years and position Chicago to be a magnet for international business.
“Every company, they want access to tech talent, they want access to great transportation,” Rauner said. “You look at what Amazon is looking for, that’s what corporate America is looking for. This campus, with the amenities we have in mind for it, is exactly what corporate America wants.”
The early descriptions of the institute and its big-picture goals strike a familiar tone.
In January 2013, U. of I. officials first revealed plans for UI Labs, a technology research hub in Chicago. That was conceptualized as a collaboration among the university, governmental agencies and the private sector to “retain talent, support company formation and community sustainability, and enhance competitiveness through innovation and creativity,” according to a presentation made to the university’s board of trustees. At the time, officials envisioned something like the famous Bell Labs in New Jersey.
Like the Discovery Partners Institute, UI Labs — the initials stand for “university” and “industry” — had backing from leaders including Emanuel and Rauner, the latter of whom provided seed money as a venture capitalist to a group that helped bring the project to fruition. University leaders said at the time that the facility would help bring U. of I.’s prowess in engineering and computer science to Chicago, and create a scientific powerhouse that would attract businesses to the city.
Despite a year of work trying to raise capital, UI Labs struggled to get moving until it landed a $70 million research grant in early 2014 from the Department of Defense to launch the Digital Manufacturing and Design Innovation Institute on the site. Steve Koch, Chicago’s deputy mayor then, said at the time the project may have taken another two years to fulfill were it not for the federal dollars.
UI Labs opened on Goose Island in 2015. In addition to the manufacturing institute, leaders also have launched City Digital, which develops technology focused on urbanization issues.
But what UI Labs became was more limited than what Rauner had in mind.
He said he wanted to see Illinois’ top universities work together to create a culture of entrepreneurship and innovation in Chicago, akin to how Northern California and East Coast universities have helped form educational and economic engines in the San Francisco Bay Area and in Boston. Rauner said part of the reason he wanted to run for governor was to help advance this vision from Springfield.
Related Midwest President Curt Bailey confirmed his company has offered to donate part of the 62-acre parcel along the Chicago River just south of Roosevelt Road the company purchased in 2016, the largest undeveloped site in the downtown area. Exactly how much land that will entail will not become clear until designs are finalized, but Bailey said his company will offer as much as is needed to house the institute and surrounding amenities.
Having a major university institute on site, Bailey said, would allow him to create a bustling development with the corporate and academic tenants during the day, and residential and retail activity at night.
“Whether it’s someone who’s going to be teaching at this institution or studying there, they’d want to be in an environment of energy and learning and opportunity,” Bailey said.
Among other goals, state and university leaders say they hope the institute would help stem the tide of Illinoisans leaving to launch successful businesses elsewhere by providing seed money to get off the ground, enticing existing companies to operate in Illinois and creating a steady stream of potential employees to recruit.
“U. of I. alums have driven some of the biggest technological advances in our country,” Deputy Gov. Leslie Munger said. “U. of I. grows people that create these things and where do they go? They go to California. Keeping those people here so that we have the Oracles and the Siebel Systems, I think, is just a great economic opportunity for the state.”
A similar project recently came to fruition in New York.
Last month, Cornell University opened its technology campus in New York City — hundreds of miles from its main campus in Ithaca, N.Y. — in partnership with Technion-Israel Institute of Technology. Cornell Tech grew out of a $100 million contest launched by former Mayor Michael Bloomberg to build a research institute. Cornell Tech separately raised more than $750 million for the project, including a $100 million donation from Bloomberg Philanthropies.