Chicago’s CBS affiliate says it plans to begin broadcasting from its new studio on Block 37 in July, as what was for a generation a vacant lot begins to fill up with buildings housing journalists and financial analysts and eventually gym rats, moviegoers and fashionistas.
Block 37’s success is critical, industry observers say, to ensuring that an urban neighborhood becomes a vital destination.
“I think there is a high probability of success,” said Tom Kirschbraun, managing director of Jones Lang LaSalle, an international real estate firm, which is not involved in the project.
“This kind of retail reinforces the city’s vision for the Loop,” he said. “That vision is a place where people don’t just work, they also play and shop.”
Since 1989 Block 37 has seemingly been jinxed. Developer after developer crashed and burned trying to build something on the land bounded by State, Dearborn, Washington and Randolph Streets.
The first tenant was WBBM-Ch. 2, the CBS affiliate.
“I had my heart set on that corner,” said Joe Ahern, general manager of WBBM. He and 220 colleagues will occupy Floors 1 through 5 of the 16-floor tower.
The site’s redevelopment is actually two new buildings. Golub & Co. is in the last stages of finishing the building at Dearborn and Washington. Wrapped around the offices is a four-story retail complex midway through construction being developed by Joseph Freed and Associates LLC.
‘Our Times Square’
While Ahern and his staff will have a view of the Picasso sculpture and Daley Plaza, from the plaza the public will have a view of a giant 80-by-20-foot video screen displaying WBBM news and major sporting events.
“Going east on Washington, you will see this video wall,” Ahern said. “It’s kind of like our Times Square.”
Morningstar Inc. is taking Floors 6 through 14 of the tower; the top two floors are still available for lease.
Joe Mansueto, founder of Morningstar, is consolidating about 1,000 employees who work at a couple of locations. The firm, known for its independent financial analysis, will move in this fall.
Mansueto acknowledged that Block 37 was a long time coming but said it was worth the wait.
“It’s got great transportation out to O’Hare,” he said, referring to the Blue Line station beneath the building.
“We will have an outdoor terrace,” Mansueto said, as well as a 200-seat auditorium. “We plan to bring a lot of clients into the space and use it as a showcase for Morningstar.”
While the office tower is 85 percent leased, workers are still laboring on Joseph Freed’s retail project. On a recent day visitors dodged ice slicks on the project’s bare concrete floors and only a few windows were in.
Still, Kevin Brown, chief executive of Lettuce Entertain You Enterprises Inc., is already planning the menu for an 18,000-square-foot cafe, food court and meals-to-go market that will locate there.
Brown said he is encouraged by the changing nature of downtown, which not long ago was typically drained of people in the early evening.
“This part of the city is robust and growing. You have the daytime population, the office component for lunch,” Brown said. “There are hotels around us so there is a tourist component. There is a very strong residential component.”
Brown says he plans to hire 200 to 250 people for the cafe, which is close to the theater district.
Other Block 37 tenants include a multiscreen movie theater, David Barton Gym, Rosa Mexicano restaurant and clothier Club Monaco.
Pedway space available
Paul Fitzpatrick, senior vice president of development for Joseph Freed, says the company has considerable space available for lease in the pedway that runs beneath the building.
“We are working with fashion tenants,” Fitzpatrick said. “We are not working on fast food.”
Fitzpatrick’s company substantially redesigned the project when it took over last year, enlarging the central atrium to bring more natural light into the building, although that took away valuable space.
The Freed project also includes plans for apartments and a hotel to eventually be built atop the retail space, which is scheduled to open in the spring of 2009. Fitzpatrick would only say that the company is talking with major hoteliers and declined to be more specific about a potential operator.
Jon B. DeVries, director of the Marshall Bennett Institute of Real Estate at Roosevelt University, is among those who agree the office component of Block 37 is a done deal. But he is also optimistic about the retail and entertainment aspects of the project.
“There is a trend to mix entertainment and dining and retail venues in an urban setting,” DeVries said. He noted that Joseph Freed has leased the upper floors of its development, the hardest to market, while lower floors are an easier sale for retail.
Because of financial problems, Mills Corp. of Chevy Chase, Md., exited from the project more than a year ago, an awkward time as CBS and Morningstar had signed on as tenants and construction had begun.
“When we came in it kind of stabilized the situation,” said Lee Golub, executive vice president of the firm that bears his family’s name.
The company, which does business around the U.S. and in Eastern Europe, is headquartered in Chicago, as is Joseph Freed.
“It probably makes sense that local firms control the deal,” said Michael Newman, CEO of Golub.
Newman said that although the development of Block 37 has been complicated, dividing it into two parts, each controlled by a big firm experienced in urban work, was probably the best way to proceed. It helped that his firm and Joseph Freed are familiar with each other and enjoy cordial relations.
“It worked out the way it should work out,” Newman said.
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rmanor@tribune.com
