Civic leaders discuss how to make State Street a 'great street' again

In 1982, the city of Chicago and the Chicago Central Area Committee agreed that an analysis of State Street was necessary to keep the retail corridor alive and thriving.

The result was a framework plan for Downtown: the 1983 Central Area Plan, which included the first concept of Millennium Park, then referred to as Lakefront Gardens, along with calls for more transportation and housing.

Today, the future of State Street is still being discussed, amid a shifting real estate landscape.

City and business leaders gathered Tuesday at Macy's Walnut Room for a sold-out summit on State Street. Panelists discussed multiple strategies for reinstating State Street as a vibrant retail and entertainment corridor, and they said the street is key to a thriving Downtown that attracts more visitors.

Among the solutions discussed were leaning into the nearby universities, improving walkability and street safety, increasing density and offering more unique experiences for visitors.

“Let's create experiences. Let's create memories. Let's create careers. Let's create educational opportunities and reasons for us to heal, reasons for us to get back together again,” Rich Gamble, interim CEO of the Chicago Loop Alliance, said. “The reason why you're hearing complaints about property taxes all throughout the city is because this right here is the economic engine for the entire city. We are everyone's neighborhood because we affect everyone's neighborhood. We employ. We educate. We entertain. We house. The Loop is just a critically important place.”

Like many retail corridors across Chicago, State Street has struggled following the COVID-19 pandemic. Since 2020, more than 15 retailers vacated the corridor, including Anthropologie, Express, H&M and Urban Outfitters, according to Stone Real Estate principal John Vance.

Vance credits many of those departures to the pandemic spurring companies to implement remote work.

“If a movie were to be made about COVID in the Loop and its effect on State Street, the opening scene would be some kind of Joker, literally wearing a Joker mask, setting ablaze a Chicago police vehicle on North State Street,” Vance said. “That would accurately describe the environment of State Street coming undone.”

But the area is seeing some signs of recovery that should “give us confidence,” Vance said, with major retailers like Barnes & Noble and Gap announcing plans to open on State Street this year.

State Street, between Madison and Monroe streets, should become “solid” within the next 24 months, he said.

For the second consecutive year, the Loop’s retail vacancy rate has fallen from 29.8% in 2024 to 28.5% in 2025, according to Stone Real Estate. Vacancies along State Street have gone from about 35% to 28.8%, for the same period.

Saira Mohan, vice president at commercial real estate firm JLL, said the corridor is currently having an identity crisis. Hotspots like Fulton Market have a reputation for drawing certain companies, like tech firms and startups. Mohan said State Street doesn’t have a strong brand or reputation to draw new retailers.

“In today's market, brands are prioritizing environments where they know their customer is intentionally showing up and not just passing through,” Mohan said. “It's not that retailers don't want to be on State Street, it’s to say that we're waiting for a clear merchandising vision and a stronger co-tenancy to emerge.”

She said experiential retail, or “anything having to do with something you can't find online,” could help improve the area's branding. Other ideas include more medical retailers and beauty experiences, along with food and beverage options.

Michael Reschke, who’s been a developer in Chicago for more than 40 years, said it's important to keep State Street as an economic engine. Reschke, with developer Quintin Primo, is working to overhaul the Thompson Center for Google's Chicago headquarters.

Conversions of Downtown office buildings into apartments will also bring more residents, who will shop and dine, though Reschke said it’s important to remember the property tax losses those conversions could bring.

Converting office buildings into hotels could be another viable solution, he said. Hotels can bring not just revenue, but people who spend money.

Chicago Department of Planning and Development Commissioner Ciere Boatright said converting office buildings to new uses is a “both and” conversation: the buildings can become housing and hotels. Both would bring more private investment back to State Street — and more broadly, the Loop.

Last year, at least 45 new businesses opened in the Loop, according to the Loop Alliance. The organization said this year at least 26 new businesses have already opened or will soon open Downtown.

Part of that is because initiatives like the La Salle Corridor Revitalization and the DPD’s Commercial Activation Program give companies faith in coming to Chicago, Kemena Brooks, chair of the Chicago Loop Alliance and the Chicago Housing Authority’s chief of staff, said.

“They're coming because they know that initiatives are underway. They know that the future of the Loop has [an] upper curve,” Brooks said.