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Digging up the ghosts of Chicago’s past is not Gene Gottfried’s job. Far from it. But it seems to come with the territory these days.

He has become an urban archeologist of sorts. Wearing a hard hat rather than a pith helmet, he has uncovered a chunk of the city’s history.

As project manager for Chicago Urban Properties’ new Erie Centre Lofts and Tower in the city’s trendy River North neighborhood, he has been directing the conversion of aging and obsolete commercial buildings into new residences.

Chipping away at vintage bricks can yield surprises. Demolition and reconstruction can unearth unexpected byproducts.

If the well-worn walls could talk, they could tell many a fascinating tale–about fortunes made, and perhaps lost, and about the businesses that built Chicago.

Gottfried’s discovery was an abandoned tunnel 80 feet underground that had been dug in the 1890s to transport water from Lake Michigan to the city.

“We found it when we bored down for the caissons for the 24-story tower,” he explained. “We later learned that the tunnel had been closed in 1935.”

Other historical oddities are turning up all over the central city as the loft boom continues.

The recycling of old plants, warehouses and offices started to pick up in 1993 with 238 sales. That was followed by 690 sales in 1994, 559 in 1995 and 828 in 1996, according to Tracy Cross, president of the Schaumburg-based real estate research firm that bears his name.

“The underlying currents are strong,” said Cross, who predicts a whopping increase to 1,612 sales this year. “Affordability is key. Where else can you buy at affordable prices and in such a strong location?”

With so much loft recycling, there are bound to be some unusual stories:

– One developer was able to cash in on an old safe (not Al Capone’s) that he found in a vintage structure.

– Another building had served as the location of a Civil War munitions plant.

– At other locations, new residences are being carved out of spaces that once were used for coffee roasting, pickle processing and jelly making.

– At still another, a former shoe factory is being shined up for residential use.

– Condos are for sale in what once was the world’s tallest building.

Large vaults for the storage of cash and other valuables were common in many old buildings. One of them was found in the five-story structure at Irving Park Road and Ravenswood Avenue, which is being revamped for 67 units by Kenard Corp.

“The safe was too big to remove, so we just converted it into a closet, one that is about the size of a room,” said Harold Lichterman, president of Kenard.

The project is called Post Card Place because of its colorful history.

Built in 1898 and expanded in 1927, it was the headquarters of Teich Printing Co. Curt Teich came to the United States from Germany in the 1890s and, together with his son, developed the largest color printing firm in the world with 1,000 employees at its peak. Teich dispatched an army of photographers to small towns across America to take photos and post-card orders.

Now the lofts at Post Card Place, priced from $115,990 to $178,990, are nearly sold out.

A Civil War connection is claimed by the 176-unit Clinton Street Lofts, just northwest of the Loop. It sits on the site of the Shot Tower Building, dating from 1857.

“During the Civil War, E.W. Blatchford & Co. manufactured various types of ammunition for the Union Army in the building, which was razed in 1901 to make way for the current timber-beamed loft manufacturing and warehouse property,” said Michael Lerner, president of MCZ Development Corp., developer of Clinton Street Lofts, where units are priced from $94,800 to $254,800.

The aroma of food processing has long since ceased to waft from the John Sexton & Co. plant, the six-story, 400,000-square-foot brick and terra cotta building at 360 W. Illinois St., just across from the East Bank Club.

According to Sexton sources, it formerly was a “mammoth beehive” for food manufacture, storage, refrigeration and shipping.

The loft rehab will erase all traces of such activity, but future residents may be interested to know that pickle curing and canning took place in the basement, freight trains rumbled through the first floor, coffee and teas were packed on the second floor, soaps and cleansers were stored on the third floor, syrup and mayonnaise were made on the fourth, preserves and jellies were cooked on the fifth and the laboratory was on the sixth.

The redevelopment of the Sexton is a project of Concord Homes, a Palatine-based home buiding firm.

However, the renovation for the 235 lofts is on hold until November, when a major business tenant in the building is expected to move out. Meanwhile, construction is scheduled to begin on 17 townhouses that will be built in the parking lot.

Prices at the Sexton range from $120,900 to $451,000 for lofts and $461,900 to $495,000 for townhouses.

Some loft buyers may find that an old shoe factory will fit them just right. The former headquarters of Florsheim Shoe Co., 130 S. Canal St., is being converted for 212 residences, ranging in price from $125,000 to $475,000. Called Metropolitan Place, it is being developed by Everest Partners.

While not in the classic mode of older loft buidings, it does have exposed ducts, round interior columns and high ceilings–10 to 11 feet.

Dating from 1949, the six-story concrete and steel building was designed in the International Style, an early genre of modern architecture.

The good news for buyers is that the windows, in horizontal bands wrapping around the structure, allow in plenty of natural light.

“The U-shaped building is perfect for residential use,” said David Haymes, vice president of Pappageorge/Haymes, the project architect. Plus, the concrete floors represent a major advantage in sound control, he added.

But the transformation from shoes to homes will really kick in with the construction of four more stories atop the original six-story building and the addition of balconies and terraces.

Construction is scheduled to begin this fall, with first occupancies 12 months later.

Are potential buyers lured by the past glory of a building?

Frank Baloun thinks so. As president of Chicago Custom Homes Inc., he is the developer for the condo conversion of the Manhattan Building at the northeast corner of Congress Parkway and Dearborn Street in the South Loop.

“This building is renowned for its history, and people are attracted by that,” said Baloun.

Designed by noted architect William Le Baron Jenney, the 16-story, steel-framed structure was built in 1891, when it claimed the title of world’s tallest building.

Because it was built before the extensive use of electricity, it features large windows to let in the maximum natural light.

Originally an office building, the Manhattan was listed on the National Register of Historic Places in 1978, and converted to rental apartments in the 1980s. Today’s condo units are priced from $59,900 to $279,900.

Not everyone agrees that a building’s past is a big deal. One of them is Tom Ablum, who moved with his wife, Lora, into the 136-unit River Bank Lofts, another Kenard Corp. project, in November, 1995.

Originally the Railway Terminal and Warehouse Co. Building, erected in 1909 at the end of the old Kinzie Street railway line, it later became a printing plant.

In a clever adaptive reuse, Kenard turned the machine rooms above five elevator shafts into penthouses.

While a building’s past uses may not be a drawing card for Ablum, he admires the look of the past. As president of the River North Residence Association, he would like to preserve the traditional mid-rise character of the area.

“High-rises are inevitable, but we would prefer that they maintain facades that are similar to existing buildings,” he said.

Sold on loft living, Ablum likes the airy ambience of high ceilings, exposed brick and beams and flexible floor plans.

“We have all the benefits of a home without living in the `burbs. It’s an oasis in the city with two decks, 360-degree views of the city’s skyline and underground parking,” he said.

But lofts are not perfect.

“The building is very solid, yet there are some noise problems. Also, you should seal the brick, and you can get some dust that has been left from all the sandblasting,” Ablum said.

Sandblasting is just one of many important steps in the birth of residential lofts.

Just ask Gottfried, of Chicago Urban Properties (a division of Sundance Homes), who describes his job as “making old, ugly buildings beautiful.”

The three tired warehouses at 375 W. Erie St. required a “classic gut job.”

Hundreds of dumpsters of junk were removed, “but we saved the old timbers, the 16-by-6-inch beams that were 14 to 18 feet long, and gave them to a salvage guy who cut them up into 2-by-4s and sold them as lumber.”

The industrial-strength six-story buildings had walls that were over two feet thick.

“Wood was a lot less expensive back then, so timber and beam construction was used, with a brick facade,” said Gottfried.

The job of carving out the 106 lofts, priced from $135,000 to $350,000, has been complicated by the fact that “nothing was square because the building had settled.”

Gottfried added that it will be easier to build the new 24-story tower, which will have 126 condos priced from $125,000 to $490,000, plus 231 indoor parking spaces.

Another loft project, this one on the Near West Side, may make shoppers might feel right at home. Stadium Center Lofts, a five-story concrete structure at 100 S. Ashland Ave., formerly housed a Wieboldt’s department store.

The 233,000-square-foot building will be developed in two phases. Under contruction are 12 condominium lofts in Phase 1 with prices starting at $119,500.

The 125 units in Phase 2 will be priced from $108,000. The Ashland Partners project is being marketed by Beliard, Gordon & Partners Inc.

Amenities will include 14- to 17-foot ceilings, exposed brick walls, hardwood floors, decks and panoramic views–of the Loop to the east and the United Center, which is within walking distance, to the west, a prime convenience for Bulls and Blackhawks fans.