New owner wants office tower along river

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Updated: February 12, 2012 8:17AM

It’s official. A vacant downtown site that awaits the next construction boom has a new developer in charge.

John O’Donnell said he closed the deal in December for a nearly half-acre parcel at 400 W. Randolph, on the west bank of the Chicago River between Randolph and Lake. O’Donnell is a former executive of the John Buck Co. who is now putting together deals on his own.

The site is alongside Amtrak-owned railroad tracks that feed Union Station. O’Donnell would need an air rights agreement to build over the tracks. He said he’d like to put up an office building in the 40- to 50-story range, covering some 900,000 to 1.2 million square feet, similar to the Wacker Drive buildings Buck erected while O’Donnell worked there.

Don’t look for it to happen soon. O’Donnell said he’s betting the market will be ready for his building by 2016 or 2017.

O’Donnell said he’s targeting tech-oriented companies for the space, which would be across Randolph from the Boeing Co. headquarters, also built over the tracks, and would enjoy close access to the commuter stations. When I commented that he’ll probably be paying a call on Google Inc., which is looking for space downtown, O’Donnell laughed. “It would be great to have them, but I’m not expecting it,” he said.

He’s working with architect James Goettsch, president of Goettsch Partners Inc., who did topnotch work for Buck. His leasing agent is Drew Nieman, principal of Colliers International and another Buck alumnus, whose career has included filling Sears Tower with tenants and handling a Buck project in Abu Dhabi.

O’Donnell would not discuss terms of the sale. The property was under the control of Michael Reschke, who once proposed twin residential towers for the site. Reschke said it was time to find better uses for capital and that the office project will be tough to finance.

“That’s probably a $450 million project with $200 million in equity, and it’s tough to do that these days,” Reschke said.

O’Donnell also is working on a project in Evanston at the southeast corner of Chicago and Main, where he proposes to build a retail and office complex of about eight stories.

BIG CLOSING: The 55 W. Monroe office building, formerly known as the Xerox Center, has a new owner following a $136 million sale.

The 40-story, 803,000-square-foot tower was sold to Hearn Co. by LaSalle Investment Management. Jones Lang LaSalle Inc. brokered the sale on behalf of Hearn.

Even though Hearn is Chicago-based, the deal amounts to a homecoming. The company has spent most of its time the last few years on investments in California, Arizona and Colorado.

Jones Lang said Hearn plans to improve the entries and common areas of the building. It also said it arranged an $86.5 million mortgage from Wells Fargo Bank and $21.5 million in mezzanine financing from Redwood Commercial Mortgage Corp.

PROMOVILLE: Want to stay at the old Ambassador East at 1301 N. State Parkway for next to nothing? Then the New York-based owner, Ian Schrager, has a deal for you.

It’s now called the Public hotel and if you go to the web site, publichotels.com, and register, you will be notified when a 90-day sale begins that offers a few rooms per night for $1. Then you can check out his “reimagined” Pump Room.

Trying to jazz up the city during the winter, the Chicago Loop Alliance has started a “lightscape” display on State Street. It’s inviting people to suggest their favorite love songs, and the winner, to be chosen at random, gets played on the street to a choreographed light display starting Valentine’s Day. Enter at lightscape.chicagoloopalliance.com.

SMASHING TEACUPS: No, that probably won’t be the name of a Chinese-style teahouse going into the Ravinia business district in Highland Park. But maybe it should be considered.

Billy Corgan, founder and frontman of the alternative rock band Smashing Pumpkins, is behind the venture, for which he leased 1,200 square feet at 582 W. Roger Williams, the former Highland Park Post Office.

Millennium Properties R/E Inc. brokered the lease, representing both Corgan and the building owner. Opening is due in the spring.

DOING THE DEALS: Shorenstein Properties LLC closed on its $228 million purchase of the former Apparel Center, 350 N. Orleans, where the tenants include the Sun-Times. The seller was Vornado Realty Trust. … Duke Realty Corp. spent $32 million to add to its Chicago portfolio, buying two fully leased industrial buildings in Carol Stream. They are a 360,000-square-foot building at 720 Center Ave. leased to food packager Peacock Engineering and a 75,000-square-foot building at 189 Easy Street (yes, there is such a thing) leased to Chicago Title Co. … Emmi Solutions nearly doubled its space to 20,000 square feet at 300 W. Adams.