Office developer on track to build over tracks at Lake/Canal
BY DAVID ROEDER firstname.lastname@example.org August 28, 2012 6:40PM
Rendering shows a planned 45-story office tower at 444 W. Lake, along theChicago River. submitted image | Sun-Times
Updated: September 30, 2012 6:16AM
Almost from the day it was announced last May, the planned office building in the West Loop was greeted with skepticism.
Hines Interests LP said it would build the riverfront tower at Lake and Canal “on spec,” or without committed tenants, a risky proposition that hasn’t been tried here since 1998. With backing from property investor Ivanhoe Cambridge, Hines promised a groundbreaking by yearend.
Some doubted Hines could follow through on the pledge, even if was publicly witnessed by Mayor Rahm Emanuel, who called it “a vote of confidence in the Chicago economy.” And anyone strolling by the Lake-Canal site will still find a parking lot with no construction equipment in sight.
But Hines Senior Vice President Greg Van Schaack said work will start by yearend, give or take a few weeks. “We’re waiting for permits and things. We’ll be selecting a general contractor next week,” he said.
The first phase of work on the $400 million project will include covering over the Amtrak-owned commuter rail tracks that adjoin the property. Van Schaack said Amtrak requires that work first for safety reasons. The deck also will form the structure of the riverfront park the city gets out of the deal.
The 45-story building, called River Point, actually won’t break ground until late 2013, Van Schaack said. Delivery is expected in early 2016, the same schedule Hines promised the mayor.
The phasing of the project gives Hines a little financial breathing room and extra time to find tenants.
The project is in line for $29.5 million in tax-increment financing from the city. Some reports have questioned the city’s ability to pay it because declines in property values have cut the balances in TIF accounts. Van Schaack, however, said the subsidy will derive directly from the building’s value at completion. “We’re eating what we kill ourselves,” he said.
The property, which would be downtown’s first new office tower since 2010, is expected to pay $175 million in taxes over 15 years.
PURPLE PEOPLE METER? The architectural firm Koo and Associates Ltd. is handling the redesign of Lincolnwood’s old Purple Hotel, and it’s looking for suggestions about a name for the project.
The firm is using its Facebook page to take name ideas. Koo is working for developer Jake Weiss in the planned reworking of the 8.5 acres at 4500 W. Touhy. The existing hotel, famous for its purple bricks, would be kept but its effect would be softened with a mesh. Stores and a banquet hall would be added, and the parking reconfigured.
People appear to need a little inspiration. The best suggestions I saw on the Facebook page were the Ultra Violet and the Lavender on Lincoln. (The property fronts on Lincoln Avenue.)
411 ON 444: The 444 N. Michigan building is getting $13 million worth of improvements designed to make it appeal to tenants who want a prestige address and the latest in technology. The owner, Munich-based GLL Real Estate Partners, said the work will focus on the 36-story building’s infrastructure, elevators and common areas.
The building also will offer “spec suites,” ready-to-occupy offices for firms that want to move in quickly.
GLL said that by yearend it will have 16 new leases representing 92,000 square feet. It has hired Telos Group LLC as the leasing agent.
CALENDAR NOTES: Make time for a couple of interesting programs coming up next month.
DePaul University and the Real Estate Investment Association sponsor a Sept. 13 program on a possible “perfect storm” in the economy (think of the federal government’s “fiscal cliff”) and its affect on property. It’s a breakfast program at Maggiano’s Little Italy, 111 W. Grand, and information is at reia.org.
Roosevelt University hosts a program Sept. 27 about the impact of Chicago’s 2004 zoning reform. The 5 p.m. event is at 425 S. Wabash, the new 32-story building on the Roosevelt campus. Find details at roosevelt.edu/RealEstate.aspx.
DOING THE DEALS: Miraya Vlacho, vice president at L.J. Sheridan & Co. handled the $8.875 million sale of the 177,000-square-foot building at 310 S. Racine, known for its Helix Camera shop. The buyer was Life Storage Centers. Vlacho represented the seller, Helix. She said the store will close in a few months and floors one through five will be converted to storage units. Office floors above them will be renovated, she said. . . . Caribou Coffee Co. said it plans to open in some Jewel stores, including those in Barrington, Hoffman Estates and Countryside.
David Roeder reports on real estate at 6:22 p.m. Thursdays on WBBM-AM (780) and WBBM-FM (105.9). The reports are repeated at 10:22 p.m. Thursday and 7:22 a.m. Sunday.