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It once housed as many as 2,000 workers, who assembled each day to fashion precision industrial instruments in the buildings under the tall brick clock tower.

Today, change is the only instrument at work on the North Side site. The factory, whose tower became a timepiece of renown for drivers along the Kennedy Expressway, is making way for houses.

In what city officials describe as one of the largest planned developments to be approved in recent years, Enterprise Development Co. Inc. has started construction of Landmark Village on the 8.9-acre Stewart-Warner Corp. site at 1800 W. Diversey Parkway.

Stewart-Warner abandoned its instruments manufacturing plant in late 1989. The facility had been vacant and deteriorating for several years.

Demolition of the 13-story, 1.15 million-square-foot main plant with its landmark clock tower and 11 other on-site buildings began last month on the same day as work started on the project’s 56 single-family homes and 156 rowhouses.

The Stewart-Warner demolition is part of a continuing trend in the city of Chicago, which last year saw about 1 million square feet of obsolete industrial space demolished and this year could lose more than 2 million feet to the wrecking ball.

“As far as we’re concerned in the industrial market, good riddance,” said Kevin Kete, executive vice president with Paine/Wetzel Associates Inc. “A lot of these older industrial buildings just don’t meet the demands of modern tenants.”

Stewart-Warner was not originally meant for the scrap heap. When it entered into negotiations over the parcel in 1990, Enterprise Development intended to recycle the existing buildings for residential use.

The intent was logical for a company which since 1980 had completed more than $200 million in projects that involved adaptive reuse of a former stable, soda pop factory, church, synagogue, YMCA, Masonic temple, furniture factory, food products plant, brewery and wooden wheel works.

But the Stewart-Warner “white elephant” proved too daunting.

“For nine months, we studied the main building for size and configuration but found it simply didn’t lend itself to reuse,” said John Shipka, director of construction and field operations.

“We conceded that it couldn’t be done because the interior didn’t lend itself esthetically to rehab. There was no way to make the project economically feasible,” he said.

But equally daunting is the demolition challenge now confronting National Wrecking Co.

“This is a difficult job because the building is almost fortress-like with its 18-inch-thick concrete walls and three-foot diameter concrete columns,” explained Allen Mandell, vice president.

Clearing the site will require five weeks, but none of the demolished materials will end up on a trash pile, according to Mandell.

He said 130,000 cubic yards of brick and concrete is being crushed and recycled as aggregate, 1,500 tons of steel beams will be sold for scrap and 300 loads of wood will be recycled.

Also scheduled for salvage is the main building’s four-sided clock tower that became a landmark at the Diversey site and gave the housing project its name.

The four clock faces are being dismantled by Architectural Artifacts Co., 4325 N. Ravenswood Ave., which specializes in preserving unusual items from buildings slated for demolition.

Three of the clocks will be sold; the fourth will be retained by Enterprise and installed in a small park planned as a focal point of the development.

Enterprise chairman Ron Shipka Sr. said that when it became evident the existing facility could not be preserved, he saw an opportunity to create a new neighborhood that would be compatible with the area’s predominantly residential character.

The result is a self-contained planned unit development that continues the street grid system and traditional architectural design of the surrounding neighborhood.

City officials see both pluses and minuses to the project.

“That area needs new housing and it will be a boon to the area,” said Greg Longhini, a spokesman in the city’s planning and development office.

“On the the other hand, the loss of the Stewart-Warner plant was a blow to the city. You can never make up for the loss of those jobs,” he said.

Yet since it was not feasible to retain the facility and entice another commercial user to the spot, the residential development got the green light.

“In other areas of the city, we wouldn’t allow for such a conversion,” said Longhini, referring to areas such as Elston Avenue and Goose Island, where there are more modern industrial buildings and high concentration of commercial users.

Neighborhood residents support the new development, although there were some reservations, said Lorraine Hoffmann, president of Lakeview Citizens Council.

The biggest concern was how the development will affect property taxes, she said.

Even though the project will be taxed separately because of its status as a planned unit development, it is still expected to boost values in the neighborhood.

Although they would benefit from any general housing price appreciation, people are concerned about being able to afford consequential increases in property taxes, Hoffmann said.

She also noted there was some initial concern about density of the project, but developers have scaled back and now plan fewer units than they had originally envisioned.

With a residential sales center and model already open,neighbors will be able to get a feel for the houses that will rise in the $40 million development.

Also under way is $2 million of infrastructure work that includes sewer, water, electric, telephone and cable lines as well as new streets and the extension of George and Wolfram streets through the enclave neighborhood.

The 1,700-square-foot single-family homes will be base-priced from $215,000 to $225,000 for three bedrooms, two baths, den/family room off a fully-applianced kitchen with eating bar, hardwood floors, living/dining great room, woodburning fireplace with marble hearth, vaulted ceilings in master bedrooms and one-car attached garage with additional parking pad.

With a choice of four floor plans and varied facades, the fee-simple ownership homes include choice of lot, 17-by-35-foot back yards with deck and optional basement.

Pappageorge/Haymes Ltd., architects, designed the homes with generous window treatments that bathe interiors with light.

The furnished model was provided by John Scott of Keevan Saddock Design.

The rowhouses, ranging from 1,030 to 1,650 square feet, will have one to two bedrooms or two bedrooms plus den with one to two baths.

Priced from $115,000 to $195,000, the units will include parking, hardwood floors, woodburning fireplaces with marble hearths, fully-applianced kitchens and balconies or patios.

Landmark Village is bordered by Diversey Parkway on the south, Wolcott Street on the west, Oakdale Avenue and Honore Street on the north and undeveloped acreage on the east.

“This is the largest single development we’ve undertaken,” said Shipka Sr.

Financing for the project has been provided by First National Bank of Chicago.

Ronald B. Jr., 30, marketing and finance director, said first deliveries are expected by summer. Ronald Jr. and John are sons of Ronald Sr.

Sales for the development are being handled on-site by Erdenberg/Otten Associates from a sales center that is open weekends from noon to 4 p.m. Weekday appointments can be made by phoning 312-944-1500.

Even before sales officially opened this month, strong interest has been shown in the project, according to Tim Otten, Erdenberg/Otten partner, who also handles sales for nearby Terra Cotta Village.

“Not everyone is fleeing the city,” he said.

“A substantial number of Terra Cotta sales have been to reverse commuters, and we expect the same at Landmark Village because of convenient access to the Kennedy from Diversey.”

Otten said he is optimistic for the project’s success because it is perceived as “a quality product at an exceptional price.”

Shipka Jr. said Landmark Village is geared primarily to first-time and first-time move-up buyers.

“Generally, we expect to attract the 27 to 35 age group with singles drawn to the rowhouses and couples to the single-family homes,” he said.

“What sets us apart from other developments, however, is that our homes and neighborhood are child compatible.”

Enterprise Development began rehabbing vintage apartment buildings in 1972, later moving into condominium conversions until the 1980s when it became recognized as a leader in adaptive reuse of outdated industrial buildings.

Recently the family-owned firm has focused on new construction projects, including Terra Cotta Village, 72 townhouses now nearing sellout at Clybourn and Wrightwood avenues, and the newly-opened Altgeld Commons, six rowhouses and 35 loft units at 2500 N. Bosworth St.

Based in Chicago since 1905, Stewart-Warner had employed as many as 2,000 workers at its Diversey plants.

By 1989, however, employment had dropped to 700 when British conglomerate BTR PLC, formerly British Tire & Rubber, which acquired the firm in 1987, announced it was closing the Diversey operation and eliminating all jobs.