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Colony Building goes residential under plan

exterior shot Old Colony Building know for its rounded bays landmark status. February 15  2013 I Scott Stewart~Sun-Times

exterior shot of the Old Colony Building, know for its rounded bays and landmark status. February 15 , 2013 I Scott Stewart~Sun-Times

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Updated: March 18, 2013 6:55AM

The Old Colony Building, a Chicago landmark that has struggled to pay its way for years as an office building, is in line for a sale and a conversion to residential use.

Veteran Chicago developers and property investors Michael Moyer and Keith Giles have a contract to buy the 17-story building at 407 S. Dearborn. They have filed a zoning application indicating plans to convert the building into 204 homes.

“It’s a tired office building. It has a higher and better use awaiting it as a residential building,” Giles said.

For years, the 1894 Holabird & Roche design had scaffolding in front of it to protect pedestrians from falling terra cotta. But that work has been completed, Giles said, so he’ll be able to focus on the interior.

He estimated the work will cost about $50 million and take about 15 months to complete. If zoning approval is granted, it could start by yearend, Giles said.

The Old Colony Building is known for its rounded corner bays. With its neighbors the Fisher, Manhattan and Monadnock buildings, it’s part of a working museum of early skyscraper construction.

Property and corporate records show the Old Colony is owned by a venture of Sidney Ferenc, with a business address in Omaha, Neb. His representative did not return a call and Giles did not discuss terms of the pending sale.

Others familiar with the property said that with the façade restoration complete, the Old Colony is more attractive for development. Real estate experts said the building, with about 150,000 square feet, is more than half vacant.

“We looked at it and we think the building lays out well for studios and one-bedrooms, which is really its target market,” said architect Ray Hartshorne, principal of Hartshorne Plunkard Architecture. He noted that the building has slender floors and generous window openings, making it suited for residential layouts.

Hartshorne’s firm is not working with the Moyer-Giles partnership, which has contracted with the firm Pappageorge Haymes Partners as its architects.

Giles said that to abide by federal rules for historic tax credits, he will preserve key elements of the interior, such as an original stairway, windows, elevator doors, and certain hardware. The lobby was significantly altered more than 20 years ago and will be redone, he said.

Plans call for the ground-floor space to continue as retail space. The developers plan a landscaped roof and a small addition to a rooftop penthouse.

While the apartments won’t be labeled as student housing, Giles said he expects to get some residents drawn by the proximity to Loop colleges and the John Marshall Law School.

Giles was among the most active developers on the Near South Side prior to the housing crash. His past projects have included turning a former cold storage warehouse at 1530 S. State into condominiums and converting the Roosevelt Hotel, 30 E. Roosevelt Road, into student housing.

Moyer is managing member of PalMet Venture LLC, an investor in the Hotel Allegro at 171 W. Randolph and its connected Palace Theatre. PalMet’s website said its more recent deals have been in Iraq.

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