Developer behind McKinley Park's Pershing Terminal project receives $250,000 grant

IBT Group was one of two Chicago developers to recently receive a $250,000 grant from the Federal Home Loan Bank of Chicago's Community First Developer Program, whose goal is to help emerging real estate developers and support community-focused housing solutions.

IBT will use the funding to support paid internships and a senior fellow who will help lead housing efforts on the developer’s next project: Pershing Terminal in McKinley Park.

The roughly $179 million investment will transform the former Quartermaster Depot, 1769 W. Pershing Road, into a mix of workforce housing, life sciences lab and office space, retail and green space. The depot was built for the U.S. Army in 1918.

The project will also help advance the city’s goal of spurring more economic development and employment opportunities in McKinley Park.

“If you go through those streets, most of those houses, they're well kept, family owned for a long time but haven't seen material investment,” IBT Group founder and President Gary Pachucki said. “This will be a big investment, which will create jobs, [and] have an impact on their whole neighborhood. I think it's going to help bring life and bring new housing, and then hopefully, that will spur other housing as well.”

IBT was selected by the city to redevelop the site in September 2023, following Requests for Proposals in 2022 for redeveloping the city-owned site. Other redevelopment proposals at the time included a movie studio and mixed-use business space.

The former warehouse is a “complicated building," Pachucki said. The 571,476-square-foot, six-story building has massive floor plates, which Pachucki plans to break up by carving out a center courtyard.

“By taking out the center third of the building, you effectively create two apartment towers, and they have this big atrium,” Pachucki said. “Those buildings are really solid — they're all concrete — so it's going to be a massive demolition project, but then what you'll have is this really cool space.”

Plans call for about 172 apartments, but Pachucki said they're trying to include 200. The units will be below market rate, with 20% of them affordable, according to Pachucki.

The units, an average of 1,000 square feet, are also slightly larger than the typical apartment because of the intended demographic. IBT is targeting scientists, tech workers and other life sciences professionals who want to live where they work. They're often in their late 20s to 30s and want space for their partner or children, Pachucki said.

The building's rooftop will include two amenity decks and green space.

The eastern portion of the 6.5-acre site, which has a one-story city maintenance facility, will be redeveloped into free-standing retail and parking.

Pershing Terminal builds off IBT’s The Terminal in Humboldt Park. That $70 million project is Humboldt Park’s first horizontal science and technology campus, offering affordable spaces for startups and growth-stage companies. Pachucki hopes that vision can be replicated in McKinley Park.

Pachucki thinks Pershing Terminal will help fill a void that startups are facing: a lack of affordable office space.

IBT is raising funds for the project, and once it's fully capitalized, Pershing Terminal should take about two years to complete.

In addition to IBT, Beauty for Ashes Developers was also awarded $250,000. Beauty for Ashes, a women- and minority-owned firm founded in 2019, will use the funding to expand its fellowship and internship programs.

Amalgamated Bank of Chicago, a member of FHLBank of Chicago, helped the two developers secure the grants, which were announced last month.

Kimberly Kam, senior vice president and sales director of union and commercial services at Amalgamated Bank of Chicago, said the funding is key for the selected developers. The award will allow them to keep housing affordable by helping to cover staffing costs, as opposed to paying out of pocket and raising project costs.

It also expands opportunities for women and people of color to get their start in the commercial real estate industry, she said.

“The biggest part of this grant is really just creating and paving a path for future commercial developers,” Kam said.