The 84,400-square-foot (7,800-square-meter) building will be two stories and set in the Peterson-Pulaski Industrial Corridor.
Officials said at the Wednesday ground-breaking that the project will bring 430 workers to the Sauganash neighborhood. Construction will create 250 temporary jobs.
Mayor Rahm Emanuel attended the ceremony. He says the investment will turn a vacant lot into an economic boon.
Peoples Gas hired McKissack & McKissack and FH Paschen to design and build the new facility in partnership with Epstein.
Work should be complete by late 2019.