Hedging on W. Loop

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Updated: March 23, 2012 8:16AM

It’s been nearly nine years that developer Philip Mappa has tried to recruit office tenants to justify construction of a tower at 645 W. Madison, alongside the Kennedy-Dan Ryan expressway connection.

Early in his quest, the site was too far west to be a top-grade office destination. But the Loop grew, big users began looking west for space and now Mappa, co-founder of Des Plaines-based MR Properties LLC, finds formidable competition around him. It includes developer Steven Fifield, who is marketing two office towers, and Old St. Patrick’s Church, which has aligned with a developer to propose an office high-rise at 625 W. Adams.

All are fighting for the same limited pool of prospects, such as Kraft Foods Inc. or CME Group Inc. Kraft is looking at a move from the suburbs and exchange operator CME has been shopping for back-office space. So Mappa, who said he wants to get something started “in my lifetime,” is hedging his bet.

He’s filed a zoning amendment with the city that, if approved, would let him make the site residential instead of commercial. Details are left open, but Mappa said his proposal would give him flexibility for one or two apartment towers on the relatively large site. It’s almost two acres.

He’s currently allowed to build up to 1.5 million square feet of office space on the site, at the southwest corner of Madison and Desplaines. That could translate into a 50-story building.

With a switch to residential, Mappa said he’d build less square footage. He said he plans to hire an architect in about four months.

He said the best option for the property would be a casino. It has the necessary size, expressway access and it’s “shovel ready,” as there’s just a parking lot there now. But he acknowledged that the politics of that idea is too much to overcome.

OPERATIC OVERTURE: The landmark Civic Opera Building, 20 N. Wacker, has sold for $125.78 million. Tishman Speyer Properties LP, which paid $185 million for the building in 2007 as part of a blockbuster deal for six Chicago buildings, sold it to an affiliate of Berkeley Properties LLC.

While the building adds up as a loser for Tishman, Berkeley hopes a renovation will allow for higher rents. Leasing has been assigned to J.F. McKinney & Associates. President Jack McKinney said the building is about 80 percent occupied and he hopes to bring that number to more than 90 percent.

Among the decisions the owners face is what to do with the Tower Club dining space. The old-style membership and drinking club that traced its founding to electricity tycoon Samuel Insull shut its doors at the end of last year. McKinney said the space is being marketed, but it could also be revived as an amenity for tenants.

The sale does not involve the Lyric Opera of Chicago’s performance space or its offices.

PRITZKER PLACE: Business must be good at the Mayne Stage, the concert venue and restaurant at 1328 W. Morse that reopened a couple years ago with the backing of James Pritzker. The venture helped revitalize a Rogers Park commercial strip. Pritzker’s company, Tawani Enterprises, also owns the property next door and has advised the local alderman, Joe Moore (49th), of plans to build on it.

Moore said Tawani plans a five-story apartment building with 12 units, one commercial space and 12 indoor parking spots at 1334 W. Morse. No zoning change is needed. Demolition of a vacant building on the property will begin soon, Moore said.

NEW HOTEL FLAG: The former Comfort Inn at 15 E. Ohio is due to reopen in May as an Acme Hotel, a new brand that aspires to hipness. With 130 rooms, including 25 suites, the hotel promises guests the latest in high-tech toys.

The owners are Gene Kornota and Anthony Klok, who also were behind the Dana Hotel and Spa at 660 N. State. After replacing a blighted hotel for transients at that location, they had the good sense to change the address from the former 666.

GOING SOLO: There’s a big honking redevelopment opportunity in Highland Park. CBRE Group Inc. said it will auction the former headquarters and manufacturing center of Solo Cup Inc. on March 6.

The 28-acre site is at 1660 Old Deerfield Road. Douglas Johnson, managing director of CBRE Auction Services, said the property has “significant power and fiber redundancies in place,” so it could become a data center or technology campus.

Multi-family housing is on the laundry list of other possibilities, of course. But since it’s the North Shore, it’s unlikely anybody will mention affordability or “workforce housing.”

DOING THE DEALS: Bridge Development Partners LLC bought a 212,000-square-foot industrial building at 2201 Lunt in Elk Grove Village for $3.6 million. Leased to stationery company House of Doolittle and trucking firm CR Express, the building is going to be transformed into an air cargo center starting in the spring of 2013. The seller was Welsh Cos.