CME wants city subsidy for renovation of the Chicago Board of Trade Building

CME Group Inc. is seeking $15 million in city aid to help pay for a major renovation of the Chicago Board of Trade Building, which became the exchange’s headquarters after its 2007 buyout of the Board of Trade.

The CME has promised to create 900 jobs over the next 10 years, in addition to the 1,800 current employees, in exchange for the tax-increment financing grant, according to Alderman Robert Fioretti (2nd), whose ward includes the building at 141 W. Jackson Blvd.

The subsidy would cover about a quarter of the $61-million cost of rehabbing the landmark Art Deco property, the longtime anchor of the LaSalle Street financial district.

The CME’s request is likely to spark more questions about the city’s use of TIF money, which critics call corporate welfare but city officials defend as an important job-creation and development tool. Mr. Fioretti contends that the CME grant is money well spent, saying it would keep the company from moving its headquarters to another city.

The city offered the CME a generous aid package — totaling as much as $40 million — around the time the exchange was wrapping up its $12-billion acquisition of the Board of Trade in July 2007. But so far, the discussions between the city and CME have resulted only in the current $15-million TIF proposal.

The CME acquired the New York Mercantile Exchange last year, opening up the possibility of a move to New York, says a CME spokeswoman.

Companies occasionally threaten a headquarters move as a negotiating ploy, but Mr. Fioretti says it’s a real possibility in the CME’s case. A CME spokeswoman says the exchange is “committed to Chicago,” but relocating to New York is “always an option.”

The city and exchange are still negotiating the TIF proposal, which was to be considered Tuesday by the city Community Development Commission but was pulled off the meeting agenda last week. The commission may review the request at its October meeting, a spokeswoman for the panel says.

“We want to be a very viable and appealing option for them,” she says.

The City Council would need to approve a TIF grant.

The Board of Trade Building sits in one of more than 130 TIF districts created by the city to spur development. In a TIF district, a portion of property tax revenue that would normally go to school districts and other government bodies is set aside for projects that city officials believe wouldn’t happen without a subsidy.

The CME would use the TIF subsidy to help pay for the rehab project at the 79-year-old Board of Trade Building. The renovation, parts of which are already under way, includes the expansion of the exchange’s trading floors and mechanical upgrades.

“The building’s a landmark building and it needed some work to make it appealing to tenants,” the CME spokeswoman says.

The project would follow a $20-million renovation completed in 2006 to fix up the building’s interior and exterior public spaces. The 765,000-square-foot tower is 96% occupied.

In addition to being one of the Loop’s largest employers, the CME supports jobs at many nearby local businesses, including trading firms and restaurants, says Mr. Fioretti, the alderman. For every job at the CME, related businesses employ 2.74 people, he says.

“This is the type of project that benefits the city and the country,” he says.