When Chicago advertising agency Euro RSCG Tatham began looking for new office space a couple of years ago, agency executives wanted something out of the ordinary, and of course, creative.
It eventually found it in the most unexpected place–within John Buck Co.’s $450 million North Bridge development, a major entertainment/retail complex currently under construction off of North Michigan Avenue.
The only problem at the time was the North Bridge complex wasn’t necessarily being designed for office space.
To Tatham executives, that was perfect.
So the agency and Buck worked out a deal, adding two unique floors of office space to a complex that will house an ambitious and curious structure containing a Nordstrom and the new DisneyQuest indoor theme park.
More importantly, the deal sums up what’s driving building in and around the Loop these days.
Ten years ago, big burly office buildings were the rage.
Today, it’s entertainment and destination retail.
“There’s an example of an entertainment center that drove an office-space transaction,” said Jacque Ducharme, manager of the downtown office of Julien J. Studley, which brokered the ad agency deal.
Ducharme can’t recall a similar instance where an entertainment center has driven that kind of transaction.
And it may not be the last.
There may be little to the current downtown skyline, such as arching cranes towering over the skeletal frames of major office complexes, to suggest that an aging Rust-Belt city like Chicago is at the cusp of a boomtown-like growth spurt.
Office building growth has indeed sputtered for the time being.
But retail and entertainment projects, including commercial and not-for-profit arts and cultural projects, continue to fuel much of the Loop and near-Loop building boom.
Though there are some signs of a slowing–recent sales slowdowns of big theme restaurants in River North have chilled some plans–entertainment, arts and destination retail projects are likely to be the biggest growth areas in real estate in and near the Loop in the near future.
Beside Buck’s North Bridge project, other major retail and entertainment projects include:
– MCL Co.’s $1 billion River East complex that will include apartments, a suites hotel and an entertainment center with megaplex cinema.
– The completion of the North Loop theater district, including the new $53 million Goodman Theatre that will be housed in the historic Harris and Selwyn Theaters by the end of 2000.
– Completion of the ambitious $150 million Lakefront Millennium Park–a mix of open space and entertainment, which will include a new indoor performance theater and outdoor stage.
And the city isn’t alone in attracting entertainment-anchored development. Two projects in the suburbs are part of the trend as well:
– The former One Schaumburg Place retail strip mall at Illinois Highway 53 and Higgins Road is being transformed into The Streets of Woodfield by developer Dan McCaffery, whose previous projects include the NikeTown redevelopment on Michigan Avenue.
The 650,000-square-foot center is being remade to include a new 20-screen Loews Cineplex theater complex, a Steven Spielberg GameWorks movie-themed entertainment venue and a Dick Clark American Bandstand diner–all set to open later this year. They will join a 200,000-square-foot Gaylan’s Trading Co., an innovative sporting goods operation, and Maggiano’s/Corner Bakery already up and running on the site.
– In north suburban Lincolnshire, construction is under way on CityPark, a $70 million, 47-acre project anchored by a 20-screen Regal Cinemas movie complex with IMAX and 3-D IMAX shows. Lettuce Entertain You Enterprises has opened a Big Bowl restaurant on the site at Milwaukee Avenue and Aptakisic Road and plans to add a Wildfire eatery.
Also slated for the project by developer Environmental Community Developments are a Rock Bottom Restaurants brew pub, an outdoor music amphitheater and an ice rink. A mid-rise office building is also planned.
“Retail is definitely not just retail anymore,” said Sharon Kahan, one of the leasing representatives with Hiffman Shaffer Anderson Associates responsible for the project. “With the success of CityPark and other similar centers, chances are that as we approach the millennium consumers are going to see new, innovative centers that encompass much more than a usual trip to the mall.”
Even though the suburbs are getting their share of entertainment-related development, the city remains the cornerstone. Fueling the interest in the core is an urban lifestyle trend in which a mix of singles, young married couples with no kids, and older Baby Boomers whose kids have moved out, are moving in closer to the downtown area, developers say.
That has fired up an unprecedented housing boom near downtown and has resulted in a fanatic growth for destination retail and entertainment spots in and around the Loop.
“The city has been under-retailed, historically, compared to the suburbs,” said Garo Kholamian, president of GK Development Inc. “Thanks in part to the residential growth, especially in the West Loop, you’re seeing more upscale and destination-oriented retail coming in.”
The area around the North Loop theater district has been the biggest beneficiary of late, with ambitious entertainment, retail and cultural plans that tie into the redevelopment of the Oriental Theatre and other nearby theaters, and eventually the lakefront.
“If we take a clue of other downtowns of America, like Boston, if they can get people to live there, the whole idea of entertainment (downtown) is more viable,” said developer W. Harris Smith, who is building a multi-use building for the School of the Art Institute of Chicago at the corner of State and Randolph.
Smith’s vision is to align the $50 million project–which will include a dormitory for 490 students, a new location for the Film Center and 40,000 square feet of retail–with the nearby theater district and thereby add momentum to the emergence of a 24-hour bustling entertainment and cultural center.
Smith says the hope is that the projects together will develop a critical mass since critical mass seems to be the key to luring and keeping people downtown.
But can critical mass spawn overbuilding? With the redevelopment of the Oriental Theatre, The Palace Theatre, and existing commercial and non-commercial theaters, some question whether there will be enough patrons to support it all.
Yes, say theater directors in the area.
“There’s no question this metropolitan area has a population that can support the kind of life that’s projected downtown,” says Roche Schulfer, executive director the Goodman Theatre. “If there are good shows, audiences will come downtown.”
But most entertainment developers agree that the projects need a cohesive plan to tie them all together, including restaurants, which haven’t yet popped up in the Loop.
Already, in the more cluttered commercial entertainment-driven areas in River North, overenthusiasm has gotten the better of some developers who are now being forced to scale down earlier big plans. The closing of Viacom’s entertainment-themed store on Michigan Avenue has served as a reminder that not all concepts can be hits.
Between the mega projects of Buck’s North Bridge and MCL Co.’s River East, there still will be plenty of building going on off of North Michigan Avenue.
But the probability of anything rivaling the size and scope of both of those projects isn’t likely, developers say.
“I think you’ll see one or two mega projects,” said Dan McLean, president of MCL Cos. “There’s been an awful lot of sobriety that’s entered the market.”
Still, the prediction by many developers is that if plans keep rolling forward, it will only be a matter of time before the city can boast of being a true 24-hour playground.
“Chicago will continue to urbanize itself,” said Ducharme. “Along with that, you’ll continue to have entertainment and retail along with it.”
FUELING THE FUN
– River East in the Streeterville neighborhood: Developer MCL Co.’s $1 billion complex will include apartments, a suites hotel and an entertainment center with megaplex cinema.
– North Bridge in the River North neighborhood: Developer John Buck is bringing a DisneyQuest indoor theme park, ESPN SportsZone, cinemas and a Nordstrom’s Department Store to the area just west of North Michigan Avenue.
– The Streets of Woodfield in Schaumburg: Developer Dan McCaffery is remaking a former strip center to include a Steven Spielberg-themed entertainment center, a Dick Clark American Bandstand diner and a 20-screen cinema.
