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Gov. J.B. Pritzker wants to sell off an abandoned industrial site on Chicago’s lower west side best known as a backdrop for the 2014 Hollywood blockbuster “Transformers: Age of Extinction.” The state will accept bids this fall for Damen Silos at 2900 S. Damen Ave. along the South Branch of the Chicago River, a 23.4-acre property also familiar to drivers on the Stevenson Expressway for its towering old grain silos.
Officials said selling Damen Silos will relieve the state of a financial burden, and a buyer could transform it into a data center, telecom facility, cannabis business or an industrial complex, giving surrounding neighborhoods an economic lift.
“The sale of this surplus property will generate significant economic opportunities in Chicago’s Lower West Side and McKinley Park communities while also saving the State the cost of annual operating expenses,” said Anthony Pascente, acting director of the state’s Central Management Services, in a prepared statement.
It may not be an easy property to unload. The state tried to auction off Damen Silos in 2014, but officials ended up canceling the potential deal, according to Mike Senner, an industrial expert and executive vice president at Colliers International.
“It was pulled because the auction had limited participation,” he said. “There were concerns about the cost of asbestos removal, the costs of demolition, the costs of building a sea wall and other environmental costs.”
But Damen Silos could attract more bidders now than it did in 2014, Senner added. In the past eight years, builders filled development sites throughout the Chicago area with new logistics and distribution warehouses as consumers increasingly bought products online, and few vacancies remain.
“The demand should be better because there is such limited supply,” he said.
High inflation, interest rate hikes and other economic uncertainty in the first half of 2022 didn’t quiet Chicagoland’s logistics boom, according to Colliers International. Product distributors occupied another 23 million square feet, outstripping last year’s record-breaking pace, and sending the vacancy rate down to 4.58%, a record low.
Selling Damen Silos is part of Pritzker’s initiative to rid the state’s real estate portfolio of properties either obsolete or too expensive to maintain. The administration sealed its most prominent deal in that effort earlier in the summer when Google agreed to buy the James R. Thompson Center, which state officials estimate will save taxpayers nearly $1 billion over 30 years.
The Illinois Department of Transportation took over Damen Silos from a railroad nearly a century ago, eventually using it to mix road construction materials. But in 2005, department officials said they had no more use for the property and transferred it to the state’s Central Management Services for disposal. By 2013, “Transformers” director Michael Bay was using it to set off fiery explosions.
The state is selling the property in “as-is” condition, and initial bids, which must be a minimum of $3.25 million, are due by October 19. Officials will choose the winning bid by November, according to a marketing flyer from commercial real estate firm JLL.
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