Tuesday, January 07, 2014

The Art of the Pitch: Selling Goettsch Partner's 53-story 150 North Riverside to the Neighbors


150-Riverside from gene molchanov on Vimeo.

This Wednesday, January 8th at 12:15 p.m. at the Chicago Architecture Foundation, Steven M. Nilles and Joachim Schuessler of Goettsch Partners will be offering a preview of the firm's latest Chicago project, 150 North Riverside.   Details here.
click images for larger view
How do you sell a skyscraper?  If you're in the middle of Chicago's Loop, you don't, really.  You fill out the forms, talk to all the right people, get the approvals, find tenants, land the financing, and start the job.  If you're in an area you share with residential buildings, however, the process becomes a bit more complex.
42nd ward alderman Brendan Reilly consults with a constituent
If you have an alderman like the 42nd ward's Brendan Reily, who's fairly conscientious about such things, there are public hearings to bring developers and residents together, and often it's a clash between two very different cultures.  The developer inhabits the macro culture, populated by  accomplished specialists and connected insiders.  Residents inhabit the micro culture, reflecting personal experience and day-to-day, moment-to-moment concerns such as traffic, shadows, light and views.  When things get tense, developers, and the those in their wide, informal support structure, often paint those in the micro culture as NIMBY's, hidebound opponents of anything new or progressive, consumed by narrow self-interest.  And truth be told, some people at public hearings do exhibit a vision so constricted that a horse in blinders would look upon it with pity.
It is entirely reasonable, however, that not only those with big bucks and big plans, but the people who have created and sustained the communities that are about to be transformed also have their voices heard.  Sometimes what would seem to be obvious questions can evoke the best answers, and that was the case at a well-attended Reilly-sponsored late-summer public meeting at the Hotel Allegro, where residents got their first in-depth look at plans for a 53 story, 700-foot-skyscraper, 150 North Riverside, on a site next to and over Amtrak tracks that has been vacant for fifty years.
150 North Riverside is the maiden project of developer John O'Donnell following his 2010 retirement as CEO of the John Buck Company, where he had a 28-year history.  “This is a site I pursued,” said O'Donnell,  “for roughly a decade in my prior job.”  He seemed genuinely proud of his new baby, and
John O'Donnell
the presentation by his team was perhaps the best I've ever encountered, exceptionally well-prepared not just to pitch the preferred talking points, but anticipate community concerns.  (The one glaring exception was when an audience question about migratory bird collisions found O'Donnell's team taking on a deer-in-the-headlights look that suggested this was a topic that somehow had never come up in rehearsal.)

One audience member, a local businessman fashioning himself an amateur expert on real estate who had conducted his own extensive research, launched into an extended argument that, with office vacancy rates currently hovering around 17%, no anchor tenant yet announced, and only one  -DLP Piper - still in play and most likely headed to the already under-construction River Point tower, the most relevant question about O'Donnell's $450 million project was “Why?’

Rather than the polite, vague answers that would be the usual developer's response to such a query, O'Donnell, instead, turned to U.S. Equities' Drew Neiman. Neiman is another long-time (27 year) former Buck-ite.  In his new role at U.S. Equities, managing the leasing of 150 North Riverside, he offered a revealing look inside the mind of a developer as he calculates the odds on a project such as this . . .
The marketplace in general has about 145 million square feet in the CBD [Central Business District].  So we'll call that the denominator.  As you stated, the average vacancy - it depends upon the report - probably it can go anywhere from 13.3 to 14.5% vacant depending on who you talk to, and how they record vacancy and occupancy.  
If you would go to buildings that are similar to [150 North Riverside], we call those 
Drew Neiman
Class A+,  really technology robust type buildings.  That equates to about 10% of the total amount of square footage in Chicago, so of the 145 million, about 14 or 15 million are buildings similar to this.  Buildings that have been been developed since 2000.  So they've got floor-to-ceiling glass, 45 foot core to glass dimension, robust vertical risers for electrical and telecommunications.  These are buildings that are the next wave and the new generation. 
The vacancy rate of that 10% of what you call the cream-of-the crop, if you will, is between 3 to 5%.  That's 10% below the rest of the market.  That means that there is a demand for those type of buildings.  Every one of those buildings that have been built since 2000 has leased up.  The reason, as you state, [is] today corporations - including law firms, consulting firms - are all trying to fit more people into less space.  So they're consolidating, or in some cases you talked about even subleasing some space or giving it back.  Or if they can, relocate to a new building where they have a better floorplate, a more robust infrastructure that can handle their needs in less square footage.  And so as a result, there is a demand there.  This submarket is very healthy and there is a demand.
When pressed on whether the project had an anchor tenant in sight, Neiman was a bit more vague . . .
We can only reveal so much here tonight.  Let me just say this, that we wouldn't have proceeded and spent the money and done what we've done, if we didn't think that there was a demand with anchor tenants whose leases expire in 2016 , 2017, possibly even 2018.  And so we've done our homework and we know who's out there.  We're feeling very comfortable that this will be well received.
The questioner was right about DLP Piper.   In July, the firm announced they were moving to River Point, committing to 175,000 of that project's million square feet.  Neiman seems also to have been correct about 150 North Riverside.  Late last month, William Blair and Company announced they're planning to move to 150 North in 2017, taking up about a quarter (300,000) of O'Donnell's 1.2 million square feet.  O'Donnell is claiming construction will begin this coming summer.

There were also questions at the community meeting on 150 North Riverside's Design.  We'll be taking those up in our next post.

Read  More:

Giant Punch Stamp on the River?  First Renderings for 150 North Riverside office tower and park - Revealed and Considered.

Katherine Darnstadt at the Apple Store, Future City Regionals at UIC, Wright Before "Lloyd" - more for January

Yup, we're still adding great items to the January Calendar of Chicago Architectural Events.

This Thursday, January 9th at 6:00 p.m., Katherine Darnstadt of Latent Design brings architecture to The Apple Store on North Avenue with a free workshop, Contemporary Urban Design: Beyond the Building.


Move forward to Saturday, January 25th, and it's the Future City 2014 Chicago Regional Finals, at UIC, bringing together 6th, 7th and 8th graders using Sim City for this year's topic Tomorrow's Transit - Design a way to move people in and around the city.

And if you missed Tim Samuelson's great 2012 exhibition, Wright's Roots , you can see selections from it at the Chicago Cultural Center in Wright Before the "Lloyd",  a look at Frank Lloyd Wright's early, pre-greatest-architect-in-the-world years that runs through Mid-March.


This week, there's also SEOIA's dinner meeting on Hurricane Sandy and Coastline Rebuilding Efforts on Tuesday,  Steven M. Nilles and Joachim Scheussler discussing Goettsch Partners new Chicago project, 150 North Riverside, lunchtime at the Chicago Architecture Foundation on Wednesday, and Christopher Vernon talking about another Wright protege, Walter Burley Griffin, the Oak Park Studio's Landscape Architect, 1901-1906 at Oak Park's Unity Temple on Thursday.


There's a lot still to come this month.  Check it all out on the January Calendar of Chicago Architectural Events.

Sunday, January 05, 2014

Say Goodbye to the 1896 George H. Phillips house

click images for larger view
If everything goes as intended, January 13th won't be a lucky day for this historic house on the 4600 block of North Magnolia. It's come to be known as the George H. Phillips house, although Phillips
George H,. Phillips
didn't move in until 1901, after he made his fortune, at the ripe age of 34, purchasing 14.5 million bushels to corner the corn market at the Chicago Board of Trade.

 “It is reported,” said the New York Times, ”that in his great corn deal 300 farmers in Iowa and Central Illinois were the backbone of his fight.  It was virtually a battle between these 300, led by Phillips, against the recognized forces of the market."  Philips shared his profits with the farmers and he himself was said to have cleared anywhere from $150,000 to over a million dollars.  The paperwork of the trading was so voluminous that Philips had to merge his company into a larger concern to untangle it.

According to a report in the Uptown Update, Phillips lived in the house until his death in 1916, after which it remained the home of his descendents, the latest of whom are selling to developers who want to cash in on the double-lot property by demolishing the house and replacing it with a six-flat.

There's only one slight problem.  The Sheridan Park section of Uptown in which the Phillips house is located was downzoned a while back specifically to stop its historic homes from being bulldozed for maxed-out structures crammed onto the tree-lined streets. After what was reported to be an incredibly acrimonious November meeting on the fate of the Phillips house, area residents in December voted down the upzoning at a community meeting sponsored by 46th Ward Alderman James Cappleman. 

It's not like there's no interest in saving the property.  Although gutted by fire a few decades ago, those who have had a chance to tour the house say it still has many of its original features, including stained glass and ornate woodwork.  A realtor has written me that she had found someone interested in purchasing and restoring it, but the owners don't seem to be entertaining alternative offers, even all-cash ones.  One participant claims that at one of last month's meetings, the owner declared that the sale price was 525K for the developers, but triple that for anyone else. 

The building is rated orange on Landmarks Historic Resources survey.  The 90-day demolition delay that comes with that designation has expired, and the Commission has taken no action to save the building.   It's now set to be demolished on the 13th.

The owner's supporters trot out the usual argument that anyone should be able to do anything they want with their property to maximize its profitability (nuclear waste dump, anyone?), and if those owners assumed they'd automatically get the upzoning they wanted, its understandable.  In Chicago, zoning laws seem most often to exist only for those too poor or uninformed to simply hire one of the city's uber-connected zoning lawyers who can make strictures disappear almost at will.
And so, this is probably what will replace the Phillips house, at least for now, another empty lot looking out over cheek-to-jowl apartment blocks.   Cappleman is not legally bound to accept the  residents' vote against the upzoning, and it's unclear what political costs - if any - there would be in overriding it.
What is clear however, is that on Magnolia and neighboring streets, there's still a number of strikingly handsome historic homes that have somehow survived the long onslaught of increasingly drab apartment blocks.  
If the scorched-earth tactics deployed to destroy the Phillips house succeed, homes like these could also soon be history, and the architectural legacy of Sheridan Park needlessly erased for a monotonous pottage of absentee-landlord six-flats.

Saturday, January 04, 2014

A Day At (and around) the Museum(s)

click images for larger view (highly recommended)
 
 
 
 Take the rest of the tour . . . after the break . . .

Wednesday, January 01, 2014

Scraping Off the Wrigley: Beginning of the End for Chicago's Historic Central Manufacturing District?

click images for larger view
If you look closely at the above photograph of a banner promoting Chicago's Central Manufacturing District,  the clock tower pictured has seen better days.  The background is discolored and the hands are missing.  The reality, however, is worse.  The clockface on the opposite side of the tower, shown to the right, is not only discolored, many of the background panels are bashed or missing.  But at least the building is still standing. at lease for now.  Which is more than you can say for this . . .
How much historic architecture can you replace with strip malls before a city loses its identity in a sea of junkspace?  How much can you afford to keep when no one seems to want it?
The Central Manufacturing District is as essential a part of Chicago's history and architectural legacy as the Water Tower, Auditorium Building or City Hall.  Built on a cabbage patch just north of the Union Stockyards in the early years of the 20th century, it was arguably the world's first planned industrial park,  With its hundreds of companies and tens of thousands of employees, it was a key engine in making booming Chicago the “City of the Century”.
That was a long time ago, and now one of the anchors of the once-great CMD is coming down, all but unnoticed, like a tree falling in the forest with no one to hear it.  After six years in search of tenants, the sprawling factory complex at 35th and Ashland where, for nearly a century, up to 1,700 workers manufactured the gum that made Wrigley one of the world's most recognized brands, is being pummeled into dust and carted off to the landfill.
The William Wrigley Company was one of the CMD's earliest tenants, and it grew to a block-square complex of buildings totaling 1.3 million square feet.  Making it vanish it without a trace is going to be a big job.  In 2009, Wrigley had hired CB Richard Ellis to sell the property, with an $19 milllion asking price.  Two years later, CBRE's plan for the property had become the universal antidote for all huge abandoned industrial property: high-tech.    In a report in the Gazette, a CBRE spokesman made a brave pitch for the site's advantages - good transportation, close to power and fibre eastments, and reasonable price.

Not reasonable enough, apparently.  A year later, the Wrigley factory complex was sold to Lonbard-based Avgeris and Associates - for $5 million.  Avergis's corporate focus is in the challenging industrial property field, with its website listing over 20 sites in nine different states.  Over half of those properties are in the Chicago area, with over half of the nearly 3 million square feet of space listed on the website as “available”.  Over one half of that vacant space comes from a single facility at 4100 West 76th Street.  Avergis has only one other retail development listed on its website, at California and 47th.   It appears to completely vacant.
The multi-story, multi-building Wrigley complex is an anachronism.  It's not how industrial space is designed and built today, and Avgeris has apparently decided it's crucial to make it all go away, quickly and finally.   On Avgeris webpage for the site, the name “Wrigley” is nowhere to be found.  Nor are any structures mentioned.  The site is identified only as “3535 S. Ashland . . . just over 30 acres,” ready to “build to suit.” Reports are Avgeris is hoping to find financial salvation in that other universal antidote for urban decay: big box retailers and strip malls.  No tenants have been announced or even rumored, so why the rush to destroy?   Avgeris claims the usual, vague “safety” concerns are driving the demolition, but my bet is that not only the buildings but the Wrigley history and identity are seen as liabilities that need to be scrubbed clean from the site to make it financially viable.

Avergis's website lists another property in the CMD,  the four-story, 356,000 square-foot factory building at 3815 South Ashland.  Just a couple blocks south of the Wrigley complex, it's in another world aesthetically.  Built in the 1940's, it has none of fine detailing of the older CMD buildings.  With the demolition of the Ashland viaduct, the raw, now spalling bones of its revealed reinforced concrete frame, inset with matrices of small rectangular windows, is again on full display, its original spare elegance in full derelict retreat.
The demolition of that half-century old viaduct, the Ashland Avenue overpass over Pershing Road, marks another turning point in the CMD.  Completed in 1963, at the end point of CMD's heyday, the overpass was another lingering anachronism, its dark, slumming presence enduring long after its original purpose had evaporated.
Still, the CMD is far from dead.   If you stand on Ashland next to the mostly demolished overpass, you'll see an unending parade of tractor-trailers racing down the street.  (You have to wonder where all this traffic will go if the the proposed Ashland Corridor Bus Rapid Transit project succeeds in appropriating two lanes of roadway.)  There are still any number of going concerns doing business in the historic buildings of the CMD.
The fact remains, however, that there is vastly more supply in the CMD's buildings than there is demand.  This is critically true in the structures created in the second phase of the CMD, along what is now Pershing Road. There is where the tall clock tower was built, next a massive, now-demolished power plant.  Still rising like a mesa along Pershing Road are four massive six-story buildings, with a combined volume of 12.5 million cubic feet.  They were constructed for the mail order operations of Montgomery Ward, but with the outbreak of World War I, over half of the space was commandeered by the U.S. Army to serve as a supply depot.  The Army's presence is still found in the numerous ornamental eagles, both in terra cotta  . . .
. . .  and above the entrances . . .
From 1979 to 2000, the buildings served as headquarters for the Chicago Public Schools.  Then-superintendent Paul Vallas, calling it a “financial sinkhole”,  sold three of the massive Pershing Road structures back to the city for $1.  And then he spent $100 million relocating CPS offices to the former Edison Building at Clark and Adams, buying the structure for $8.2 million and spending another $20 million for renovations.  This year, the CPS announced it would move from that building, which it owns, to rented space at 1 North Dearborn,  which they calculate will somehow produce $60 million over the next 15 years.  The merry-go-around never stops.
I've a system that's fiendishly clever,
Which I learned from a croupier friend,
And I should go on winning forever
But I do seem to lose in the end.
         What's the Use? from Candide, lyrics, John La Touche.
In an “expose” as part of its Broken Bonds series on the City of Chicago's burgeoning municipal debt, the Chicago Tribune made the Pershing Road complex the poster child of “indiscriminate spending”, a “boondongle” sucking up $41 million in bond money for the past nine years.  Pandering to its perceived primary readership of suburbanites in the 1%, the Trib report seemed to suggest that Chicago is already Detroit, inferring that new capital projects such as police and fire stations, libraries,  and saving landmarks to sustain neighborhood character, have not only been far too expensive, but probably shouldn't be done at all.

Before it imploded in its last terms, the administration of Richard M. Daley had made supporting Chicago's industrial base a major priority, but the story of how that all played out is an object lesson in how things really work in clout city.  
Galewood Yards, 1940's, photograph: Jack Delano, Library of Congress
As reported by the Reader's Ben Joravsky and others,  the 65-acre Galewood Yards at 1900 North Central was a mostly abandoned facility far larger than the needs of the surviving tenants Soo Line and Metra.  The Daley administration had a surprisingly resolute vision of using it as an anchor for a “modern state-of-the-art industrial park,” enlisting a firm named CMC Heartland Partners to develop it, and creating the Galewood/Armitage TIF to pump in subsidies.

When CMC pushed to be allowed to switch to residential development, the Daley administration pushed back, and a year later CMC bailed, selling their interest for $6.9 million to Calvin Boender.  Originally Boender talked about how the site "would make an excellent boutique industrial park,” but by 2004, he, too, was pressing for a switch to residential.  After Boender enlisted the help of Alderman Issac Carother's and Congressman Luis Guiterez, the city threw in the towel.  It allowed a part of the site to be rezoned to allow 187 residential units and a 14-screen movie theater.    $5.3 in TIF money went to a local union so it buy a portion of the remaining acreage from Boender for a job training center.  Boender also got over $6 million for selling the land for the cineplex and residences.

At the end of 2012, the Galewood/Armitage TIF had a $23 million balance, but a ongoing paper deficit, as revenues from the TIF were used - not to support industrial development - but to float over $35 million in school construction bonds to fund the $36.5 million Jorge Prieto Math and Science Academy.

In May of 2009, Carothers and Boender were indicted by U.S. Attorney Patrick Fitzgerald on fraud and bribery charges.  Boender had given Carothers $40,000 in free improvements to his home, plus other perks, in exchange for successfully pushing through the zoning change that allowed Boender, without doing a jot of development, to sell property he had bought at $6.9 million for $11.3 million within just a few short years.

In 2010, Carothers plead guilty.  The next year a jury convicted Boender.  In a secret 2008 interview with the FBI, Mayor Daley “had trouble recalling any controversy surrounding Galewood Yards.”  This elective amnesia seems to have become the Mayor's contemptuous M.O. whenever he's called to testify on the corrupt deals that have now become his administration's legacy. 
Daley's book of (inner) laughter and (outward) forgetting also infected his staff.  When his administration helped create a new, $45,000,000 Wrigley Global Innovation Center on Goose Island with $14 million in city subsidies in 2006, Daley promised not only that the Ashland Avenue factory and its jobs would remain, but that new manufacturing would spill into the spaces vacated by the Innovation Center's opening.  And he would get it in writing.  Then everyone forgot all about it.  Apparently no signature was never obtained because just one month later, Wrigley announced it was closing the Ashland Avenue plant.  600 workers lost their jobs

And so, we're back to the beginning.  The demolition of the Ashland Avenue overpass lets us see unobstructed the proud old factory buildings.  For the first time in half a century, they've been given room to breathe - will they be denied a chance to live?  
Just last January, the former Pullman Coach factory at 37th and Ashland was consumed by a massive fire.  It took months to clear away the debris.  The site is now a vacant dirt pile that stretches farther to the east than you would have imagined.
That's the magic of the CMD.  A building like the  Machinery Warehouse may seem, by its graceful facade, to be a relatively modest structure . . .
. . . until you turn the corner and see that it extends all the way down the block in an uninterrupted, 60,000 square-foot sweep.
Now the Pullman Coach factory site is a yawning gap in the Ashland Avenue streetwall of once proud factory buildings, with their tall towers built to conceal the water tanks that provided protection from fire.  How long can they hold on?  Just up the street, that building 3815 South Ashland recently acquired by Avergis is listed as essentially vacant.  Will it become the next to fall?  Will the streetwall dissolve into a smattering of buildings between surface parking lots, or - just as likely - vanish entirely for a giant strip mall?   That's seems to be Avergis's plan.  The siteplan on their website doesn't just include the Wrigley properties, but extends another block south.  A February, 2013 report by DNAinfoChicago shows a prospective plan that wipes out every building on Ashland almost to 37th, including the eight-story former Larkin Building - three square blocks erased for a big box strip mall with stores in a dozen isolated islands swimming in a sea of 600 parking places.

Last month, mayor Rahm Emanuel's administration announced a task force bringing together the City of Chicago, local alderman, labor and consultants to come up for new uses for the 50+ now-closed Dominick's stores that failed to find a buyer.  Where's the task force for the CMD?  In 2012, Emanuel announced a plan to bring high-speed broadband to the Ravenswood Industrial Corridor.  The CMD already has the benefit of adjacency to the rail right-of-way that served the Stockyards.  Why not use it to help attract high-tech to the CMD with super-speed internet?

The Central Manufacturing District is the ugly duckling of Chicago's lost pride. When you walk among the fine old buildings, when you view the great clock tower from McKinley Park, you can see
what it could become - perhaps not exactly a swan, but more a falcon or a hawk, a workaday bird of no small majesty.  Right now, it's just prey for the vultures.
Just as its buildings contain probably hundreds of millions of dollars worth of embedded energy that is being squandered through neglect and demolition, the Central Manufacturing District is a jewel of a neighborhood waiting to be rediscovered.  An essential part of Chicago's history and architectural legacy, it might easily be discarded unthinkingly, but only at enormous cost.  An infusion of attention and imagination, with the money that follows it, could restore the CMD to being one of Chicago's most valuable assets.



Read More:

Four Buildings and a Funeral - Wrigley: The Architecture that Remains after a Great Company Dies

Outtakes from the Central Manufacturing District.


Aftermath:  Some Say the World Will End in Ice . . .

150 North Riverside, Jeanne Gang on Radical Creativity, Achilles on the Auditorium, Vernon on Griffin and more: Just Posted! the January Calendar of Chicago Architectural Events

Once more into the breach, dear friends - we've just put up the January 2014 Calendar of Chicago
Architectural Events.

The year starts slowly but we still have dozens of great items in the first month of the New Year, beginning with representatives of Wiss, Janney, Elstner and Thorton Tomasetti discussing Hurricane Sandy and Coastline Rebuilding Efforts for the Structural Engineers Association of Illinois,

Lunchtime Wednesdays at the Chicago Architecture Foundation, it begins with building previews -on the 8th, with Steven M. Nilles and Joachim Schuessler of Goettsch Partners discussing 150 North Riverside, which has just landed its anchor tenant; and the 15th finds representatives from Solomon Cordwell Buenz and Loyola discussing the school's under-construction Institute of Environmental Sustainability.  Then on the 22nd, Julia Bachrach, Elizabeth Patterson and Frances O'Cherony Archer talk about the Chicago Historic Schools website, a fantastic new resource of images and information.  On the 29th, Chicago Chief Sustainability Officer Karen Weigert talks about Building a Livable, Competitive and Sustainable City.

Want more?  Christopher Vernon flies in from Australia to talk about Walter Burley Griffin, the
Oak Park Studio's Landscape Architect at Frank Lloyd Wright's Unity Temple on Thursday, the 9th, while Rolf Achilles takes on The Significance of The Auditorium Building for Landmarks Illinois in the structure's Murray-Green Library on Thursday the 16th.

On Wednesday morning, January 22nd, Jeanne Gang talks about Radical Creativity and Collaborative Design at The Executive's Club of Chicago's Women's Leadership Breakfast, while over at APA Chicago, Adam Rosa discusses A Tale of Two Neighborhoods: The HUD Choice Neighborhoods in Action on Tuesday the 28th.

New shows:  Chromatic Patterns for the Graham Foundation:
Judy Ledgerwood opens on the 23rd, while ArchiTech Gallery launches its new show, Alfonso Iannelli and the Studios, Saturday the 3rd.

There's lot more, so check out all the goodies on the January 2014 Calendar of Chicago Architectural Events.