Investors pitch data center beneath Grant Park
DAVID ROEDER email@example.com August 30, 2011 9:26PM
The proposed garage under Millennium Park (right) and a possible Playboy Club location at 12 S. Michigan. | Lawrence Okrent
David Roeder reports on real estate 6:22 p.m. Thursdays on WBBM-AM (780). The reports are repeated at 10:22 p.m. Thursday and 7:22 a.m. Sunday.
Updated: November 16, 2011 1:30AM
Not that anyone will feel sorry for them, but the group that took over Chicago’s parking meters on a long-term lease is having trouble with another of its investments, the four underground garages in the East Loop.
The garages contain more than 9,000 spaces and are not heavily used except during special events along the lakefront. So the investors, Morgan Stanley and Chicago Loop Parking LLC, are looking for ways to fill empty, below-ground space they control on a 99-year lease.
One idea circulated in the market and with city officials is to convert part of the East Monroe Garage into a bunker-like data center, a facility that houses servers and other computer equipment. Data centers require steady temperatures, good security and reliable power, but operate quietly with few employees heading in and out.
The plan advanced by Dennis Pedrelli, chief executive of Chicago Loop Parking, would place the data center south of Randolph Street and east of Columbus Drive. That’s close to where the Chicago Children’s Museum wanted to place a new facility, only to be overcome by funding trouble and local opposition.
Avis LaVelle, a spokeswoman for Pedrelli, emphasized that the data center plans are just conceptual. She said it might take up just 400 parking spaces in the 3,200-space East Monroe garage, which is closed for renovation. It is due to reopen next July 31.
Working with CB Richard Ellis Group Inc., the garage operators have discussed the idea with real estate brokers who represent users of data centers. One broker, Jim Kerrigan, executive vice president of Grubb & Ellis Co., said he wasn’t overly impressed.
Kerrigan said he doesn’t believe the site has inherent advantages over an above-ground location. “The garage already leaks and they have to build a lot of new infrastructure to make it usable,” he said.
The approach, however, is understandable. “Chicago is probably the tightest market in the country for data centers,” Kerrigan said. “It’s on an ‘if you build it, they will come’ basis.”
Kerrigan said other ideas for the garage that were broached to him included a movie theater or a car dealership.
Downtown Ald. Brendan Reilly (42nd) said the investors gave him the data center pitch. “It seems to me it could be a reasonable use for the space,” Reilly said.
Or at least more reasonable than another suggestion the investors gave him: a big-box type retailer tucked beneath Grant Park. It would invite crowds and require signage somewhere on Chicago’s “forever open, clear and free” front yard. “I told them that might be a more difficult cat to skin,” Reilly said.
PLAYING THE FIELD: Reilly was surprised when reports surfaced that investors were scouting sites in his ward for a Playboy Club that would bring women in bunny costumes back to Chicago after a 25-year hiatus. Reilly said he has had “zero conversations” with Playboy Enterprises Inc. or any licensee about the project.
He is not against the concept, but he wants it where it won’t raise trouble with the neighbors. One potential site, the Il Mulino restaurant at 1150 N. Dearborn, is “ringed by high-density residential buildings,” Reilly said.
Reilly said he’d have to examine whether a Playboy Club needs a special liquor license.
Investors in the Playboy Club concept also are considering the empty Chicago Athletic Association building at 12 S. Michigan (see picture above), Reilly said. The building needs a new life, but putting Playboy across the street from Millennium Park won’t be to everyone’s liking. The bunnies might eat the rich donors’ tulips.
LIVE DRAMA: A North Side landlord, Newcastle Ltd., is getting heat from some businesses along busy Clark Street in Andersonville and from Ald. Harry Osterman (48th). It’s all over Newcastle’s plan to lease a building at 5419 N. Clark to a restaurant, Jerry’s Sandwiches.
Osterman and owners of the Hamburger Mary’s establishment at 5400 N. Clark said they’ve had a better idea. Brothers Brandon and Ashley Wright of Hamburger Mary’s and co-investor Mark Adams wanted to invest in a live theater at 5419 N. Clark. Brandon Wright said Andersonville already is full of restaurants and that a theater would generate business for them. He said other businesses signed a letter supporting the theater idea, but Newcastle has opted to negotiate with the restaurant.
“I am fully supportive of developing a theater [at 5419] and I have conveyed that to Newcastle,” Osterman said.
Laura Giampietro, a spokeswoman for Newcastle President Michael Haney, said the company checked out prospective tenants with the alderman and local groups for 18 months and that the sandwich shop had gotten support. She said that during that time, promoters of the theater idea have been unable “to secure written commitments from theater companies supporting the concept, nor address neighborhood concerns regarding the parking impact of the proposal.”