The E.W. Corrigan Construction Co. felt compelled in February to issue a press release and photograph of a tower crane being used on a West Side construction project. The crane, Corrigan said, would be the last one seen anywhere near downtown in some time.
Today, the cranes that once seemed synonymous with the downtown landscape-Corrigan alone had five up just two years ago-are in hibernation, their slumber signaling a none-too-restful end to the heyday of office tower construction in the Loop.
With the last of those edifices that went into the ground in the overexuberant 1980s now open or about to open, more than 50 million square feet of new office space-double what was there before 1979-will have been added to the Loop area.
But it is anybody`s guess when the next skyscraper will break ground, reawakening the need for the skeletal steel hoists.
”The only good news downtown, relatively speaking, is the lack of new space to be added,” said Jim Lockhart, vice president with the real estate firm Grubb & Ellis. ”After the Chicago Title & Trust Building comes on-line
(in September), we probably won`t see another speculative development until the late 1990s at the earliest.”
In the suburbs, new speculative office construction-that is, office space built without tenants lined up in advance-virtually halted more than a year ago.
No significant projects have been added in the west, north or northwest corridors since early 1991, nor in the O`Hare market since late 1991.
There have, however, been sizable build-to-suit developments-including those for the Sears Merchandise Group, Ameritech and Spiegel Inc.-that have gone forward. Those projects usually are fully leased before groundbreaking.
Though some major projects have been placed on the back burner in the suburbs, the most visible holes remain in and around the Loop. And they are likely to remain for some time.
”There are some disturbing things that people don`t like to talk about in our business,” said Stephen Hearn, president of the Hearn Co., a Chicago development and management firm that has specialized in the renovation of vintage Loop office buildings.
”We`ve cut the supply off, but just cutting the supply off doesn`t resolve the issue. You have to have demand for office space,” he said. ”But it appears the service industries that are vital to the growth downtown have pulled back. They`re more automated and more fragmented.
”Certain things revived our business in the past, and those things aren`t here this time around,” Hearn said.
Those include the entrance of large numbers of women into the workforce and the assimilation of the Baby Boomers into office jobs, factors that drove much of the office construction of the `70s and `80s.
”Maybe we`re skidding along the bottom, but there isn`t a lot of momentum to turn the market around right now,” said Jacque Ducharme, who heads the Chicago office of Julien J. Studley Inc.
”With 25 million square feet vacant downtown, you need two or three years of absorption and the economy getting better before the market will turn,” he said.
According to brokerage firm and real estate development and management company statistics, 50 office buildings downtown each have 100,000 square feet or more vacant or for sublease.
Yet at one time or another, 20 additional office towers representing as much as 25 million square feet were being planned. As of today, every one is labeled ”On Hold.”
Here, according to brokerage and development companies as well as news reports, is a rundown of what might have been.
– The Miglin-Beitler Tower, which would be the world`s tallest building, has been the most talked and written about real estate project of the 1990s, though developer Miglin-Beitler hasn`t come close to finding financing for the 125-story needle.
Proposed for the southwest corner of Madison and Wells Streets, the project would be directly west of Miglin-Beitler`s 181 West Madison, designed by Cesar Pelli, also commissioned for the world`s tallest.
It has been reported that the lender on the land, the Mellon Bank of Pittsburgh, has foreclosed, seeking payment of about $23 million. Miglin-Beitler says it remains in negotiations on restructuring the deal. Two tentative groundbreaking dates have come and gone. The third time may be the charm, but no one is willing to name the date.
– Block 37, bounded by Dearborn, State, Washington and Randolph, was to have helped revitalize retailing along State Street. The building slated for it, 111 North Dearborn, is a joint venture of three of the city`s best known and most powerful development firms: Metropolitan Structures, builders of Illinois Center; JMB Realty Corp., which put up 900 North Michigan Avenue and owns Water Tower Place; and The Levy Organization, developer of One Magnificent Mile.
Architect Helmut Jahn designed a two-tower project, the first phase of which would have had 1.2 million square feet, including a retail concourse along State Street across from Marshall Field`s department store. Though the retail space may have leased, the project was designed to move forward only when the first office tower could be constructed and there was no anchor tenant to be had for the office space.
In place of the building, Gallery 37 has been operating in the summers. The student art exhibition space has been so big a hit with the public that some people are advocating the city take back the block and create a permanent public open space.
– Dearborn Tower was to have risen from the rubble of the former Montgomery Ward store at State, Dearborn and Adams Streets. The 2.5 million-square-foot tower proposed by Bramalea Inc. had secured the financial participation of Dutch pension fund interests but never found an anchor tenant. Bramalea announced in July that it was seeking to sell the site.
– One North Wacker Drive, a 2 million-square-foot tower proposed by developer Harvey Walken, has the backing of the Ameritech Pension Fund. The site has been cleared for the 83-story project, giving tenants in the recently opened One North Franklin Street office building a clear view of the classic Civic Opera Building across Wacker. It is unlikely One North Wacker, designed by architect Kevin Roche, will interrupt those site lines soon.
– The old Morton International Building was to have been redeveloped into 100 North Wacker, a 1 million-square-foot office tower, once Morton moved into its new headquarters at 100 North Riverside Plaza. ORIX Real Estate, despite backing from its Japanese parent, reportedly has decided not to exercise its option on the site, returning it to Morton, presumably to sell to someone else later.
– 150 North Dearborn was planned as a 1.1 million-square-foot office tower designed by Lohan Associates Inc. The site on the northwest corner of Dearborn and Randolph was to have been developed by Miller-Klutznick-Davis-Gray Co., a partnership that has since dissolved. The parcel is up for sale.
– Franklin Center was to have been a 64-story neighbor for the Sears Tower directly west of its block. The 1.5 million-square-foot project of Homart Development, a Sears` division, was designed by Skidmore, Owings & Merrill. The site is still a parking garage.
– 31 South LaSalle was a planned 52-story tower of 1.35 million square feet designed by Loebl, Schlossman & Hackl. Trammell Crow and Taisai America Corp. put together a redevelopment plan for the site, occupied by the Marmon Building and Chicago Bar Association Building.
The developers, who would demolish the existing buildings after mid-1995, agreed at the time they submitted their plans to the city to abide by new restrictions the city imposed on the amount of time the site could be vacant. But the point is moot, because the development deal fell through.
– A 1.2 million-square-foot tower was proposed for the site at Monroe, Wacker and Franklin Streets. JMB, which acquired the parcel in its purchase of Cadillac Fairview, was said to be considering a joint venture with Jaymont Properties, which owns the adjacent Kent College of Law building on Wacker. No developer or architect was selected.
– The southeast corner of Monroe and Wells was to have been the site of a 1.1 million-square-foot project by the Lurie Co. Again, Skidmore was the architect.
– Another Skidmore design, 111 West Wacker would have been a 34-story, 630,000-square-foot project for Jaymont Properties. Jaymont has closed its Chicago marketing office with no plans to proceed.
– Wacker, Lake and Couch Place is a redevelopment site controlled by Hiffman Shaffer Anderson Inc., which has proposed a 36-story, 750,000-square- foot project. No architect has been selected.
– 550 West Madison Street was to have been the second phase of the Northwestern Atrium Center project that would have added a hotel and executive facilities to the complex. The same developer and architect, Tishman Midwest Management Inc. and Helmut Jahn, were aboard, but the project never left the station.
– At Union Station, a plan to redevelop the current office space above the rail facilities also never got on track. U.S. Equities Realty Inc. wanted to build twin 26-story office towers over the landmark station. A renovation of the commuter and retail areas of the station was completed, however.
– Gateway V, proposed for Van Buren and Canal, would have added 1 million square feet to the pioneering Gateway complex that brought development west of the Chicago River in the 1960s. Tishman Midwest was the developer, Skidmore the architect.
– 623 West Monroe Street would have been Farnsworth McKoane & Co.`s big entrance into the Loop office development scene. When the project was announced in 1989, it looked possible for a mostly suburban firm to get in on the action.
The 43-story, 1 million-square-foot project was designed by Lohan Associates. But it won`t go forward for Farnsworth McKoane, which has sold the parcel. No new plans have been announced.
– 300 East Randolph is the next scheduled office tower for the Illinois Center development. The proposed 34-story, 850,000-square-foot building was designed by Fujikawa, Johnson & Associates.
Illinois Center is a mixed-use project designed in the mid-1960s to be built over 20 or 30 years. That may stretch to 40 or more.
– The parking garage on the north side of the Chicago River west of LaSalle was to have been replaced by a 1.2 million-square-foot project, 300 North LaSalle, designed by Hammond Beeby & Babka, which was part of the team on the Harold Washington Library. The site has been under option to various developers, but none has followed through.
– The World Trade Center was to have completed a full-block redevelopment on Kinzie Street between Clark and Dearborn that includes the Hotel Nikko and Quaker Tower. But before the 877,000-square-foot project could move forward, developer BCED Inc. underwent a shakeup brought about by the desire of its parent firm to sell real estate assets.
– At River Bend, The Levy Organization has won approval for a mixed-use project of almost 2 million square feet that would include a hotel, parking and offices. The plans for the site along the Chicago River between Lake and Canal Streets were the first to be drawn incorporating the city`s riverfront development guidelines, designed to provide more open space and accessibility along the river.
Two other mixed-use developments, Central Station and Cityfront Center, have seen residential projects move forward, as well as a build-to-suit deal for the University of Chicago Graduate School of Business at Cityfront. But no new office towers have been proposed, though there is zoning in each project for millions more square feet.
And though the 311 South Wacker Building, developed by Lincoln Properties and the Teachers Insurance and Annuity Association, is up and running, the site directly south of the Sears Tower is planned to include two additional look-alike companions to the 1.3 million-square-foot tower.
