Setting the stage for construction of a big, mixed-used development on the Near South Side, the Daley administration has agreed to provide an $8.6 million public subsidy to finance streets and alleys for a site controlled by Higgins Development Partners LLC, a Chicago-based development firm backed by the billionaire Pritzker family.
The agreement, coming after lengthy negotiations, is crucial to the long-awaited development of the key, 25-acre parcel bounded by Roosevelt Road and Wells, Polk and Clark Streets. In addition to the Pritzkers, the land is also owned by construction executives Matthew and Daniel Walsh and their former development partner, John W. Higgins.
Construction is likely to begin this year with a multistory retail development, possibly anchored by a Target department store or Home Depot, sources said.
Last year Higgins was working on a deal to sell a portion of the land for a 325,000-square-foot telecom hotel, an office complex housing telephone switching equipment and computer servers, to be developed by Telecom Routing Exchange Developers, sources said. But T-REX is being spun off from its parent company, Florida-based Terremark Worldwide Inc., and the status of that deal could not be determined
Higgins, the chairman and CEO of the Chicago-based firm that bears his name, could not be reached for comment.
Northern stays put: While some downtown banks look to move to the edge of the West Loop in order to grow, Northern Trust is expanding while staying in the heart of the Loop.
Northern has renewed its leases at two Loop buildings near its headquarters at 50 S. LaSalle St., which the Chicago-based bank owns, a spokeswoman said.
It has renewed a 130,000-square-foot lease at 10 S. LaSalle, while the bank will add 90,000 square feet to its offices at 181 W. Madison for a total of 350,000 square feet.
Northern is advised by the Chicago office of Dallas-based real estate tenant representative Staubach Co.
Suburban office abundance: The suburban office vacancy rate slipped to 10.1 percent during the fourth quarter, compared with 10.5 percent during the same period in 1999, as demand for suburban office space kept pace with the building boom.
Yet the amount of new office space is likely to outpace demand this year, pushing up vacancy rates and pushing down rents.
In 2000, the demand for space, as measured by net absorption, was 3.7 million square feet of office space, or two-thirds more than the annual average of 2.2 million square feet over the last decade, according to a market survey by the Chicago office of CB Richard Ellis Inc. Net absorption is the change in the amount of space leased and occupied.
In 1999, the suburban market matched the annual average of 2.2 million square feet.
Yet the building boom, which added 3.8 million square feet to the market last year, has many investors nervous. About 4.7 million square feet of new office space will be completed this year, while absorption will slow to about 3 million square feet.
And the slowdown of the economy has many tenants reconsidering their expansion plans.
“The suburban market has been exuberant for a long time, and all this bad economic news is clearly putting a damper on the enthusiasm,” said Jeffrey S. Barrett, senior managing director with CB Richard Ellis.
