The Chicago Community Development Commission (CDC) today recommended that the City Council grant the City’s Department of Community Development (DCD) approval to negotiate a redevelopment agreement with the Chicago Mercantile Exchange’s (CME) and to recommend the City Council designate Chicago Mercantile Exchange, Inc. as the developer. This project consists of the renovation of office and trading space in three buildings that will house CME’s corporate headquarters and operational staff. The buildings include 141 W. Jackson Blvd., 10-30 S. Wacker Dr. and 550 W. Washington St.

The CDC today also approved recommending TIF assistance in the amount of $15 million for the project. This project and financial assistance are the culmination of discussions that began in 2007, during the final stages of negotiations of the CME/CBOT merger, when the InterContinental Exchange (ICE) emerged as a competing bidder for the CBOT. In order to complete the transaction, CME wanted to raise its proposed price and requested the City’s assistance in helping to cover redevelopment costs for the consolidation. ICE is headquartered in Atlanta and if ICE were the successful bidder, it is likely they would have moved the headquarters and many CBOT jobs to Atlanta. 

After successfully merging with the CBOT in 2007 and acquiring NYMEX Holdings, Inc. in 2008, the CME is now the largest and most diverse financial futures and options exchange in the world, and also operates the largest clearing house in the world. 

“There are significant public benefits, both direct and indirect, from CME’s presence in Chicago, and we are very pleased they will continue to be a part of our vibrant downtown economy,” said Acting Department of Community Development Commissioner Chris Raguso. “With its large employee based, CME ranks as one of the largest employers in the city and the state. Further, the Federal Reserve Bank of Chicago has recognized that the reason Chicago is a financial center is due to the Chicago Mercantile Exchange and the Chicago Board of Trade’s presence in the city.”

The TIF financing will require CME to keep not only their corporate headquarters in Chicago, but also to retain their current 1,750 full time positions in Chicago, and create no less than 638 jobs in the City over a period of ten years.  Estimates have shown that Loop office workers spend an average of $7,000 annually downtown supporting area businesses, providing a boost to the local economy as well as the tax coffers.

TIF funds will only be used to reimburse CME for TIF-eligible costs, which are limited to the renovation work at the 141 W. Jackson building, as it is the only property located within the LaSalle Central TIF District. However, all three buildings are being required to comply with the City’s MBE/WBE, prevailing wage, and City residency requirements. The City will initially pay CME $2 million in TIF funds after the renovation of the office space is completed and 10% of the remaining funds will be paid each year for ten years.