It may seem surprising that a city as dynamic as Chicago – among the top five most populated cities in the United States – should have trouble building a highrise smack in the middle of the city center.
But a combination of land values, interest rates, inflation, the lingering effects of the pandemic, and the fact a previous developer filed for bankruptcy, meant a 2.2-acre piece of otherwise prime land near the corner of Lakeshore Drive North and the Chicago River sat empty for almost two decades.
That included an embarrassing 76 foot deep hole left when the previous builder, Garrett Kelleher, couldn’t finance the project, one that would have seen the tallest tower built in the Western Hemisphere. That building, called The Spire and designed by acclaimed Spanish architect Santiago Calatrava, would have seen a 2,000 foot curving edifice, dwarfing NYC’s One World Trade Center, which stands at 1,776 feet, currently the hemisphere’s tallest.
Now, Related Midwest, part of the Related Companies group which developed Manhattan’s west side Hudson Yards, has taken over the property and plans to build two residential structures, the first scheduled to get underway early in the new year.
That will be a 72-storey, 857-foot highrise designed by the city’s renowned Skidmore, Owings & Merrill architects. It will contain 635 rental apartments, 20 per cent of them affordable.
The estimated $1 billion project is being financed in part by the Illinois Housing Development Authority (IHDA) to the tune of $510 million in bonds.
No date has been set for when the second tower could get off the ground. It would be 765 feet and have 500 apartments with no commitment on affordability.
“Related Midwest looks forward to bringing to life the iconic sister towers at 400 Lake Shore Drive as well as the 3.3 acre DuSable Park for all of Chicago to enjoy,” Related Midwest president Curt Bailey said.
“Positioned on the last waterfront site where Lake Michigan meets the Chicago River, the development of this site will strengthen the city’s connection to the River and Lake Michigan through the creation of beautiful public spaces and spectacular residences that will be a great new addition to the Streeterville neighborhood.”
But the first building is considered a feather in the cap for the city’s downtown historic Loop, which has seen growing pains with minimum new construction in recent years.
Veteran developer and real estate observer John Murphy is thrilled Related has been able to make the numbers work.
“It’s a great looking project. It’s got marquee profile to it, so I think it’s going to do quite well,” he said.
A reason is that the Loop has limited rental accommodation.
“There’s such a lack new supply addition in Chicago,” Murphy said.
That’s especially true in core district Streeterville, “a strong submarket with limited apartment inventory.”
Murphy suggested the groundbreaking would symbolically show major city projects can get done.
“There’s virtually no tower cranes up in Chicago right now, it’s very unfortunate,” he said.
Why? It’s because of issues like the city’s affordable housing ordinance, realty taxes which are “completely out of control,” and interest rates, “the simple cost of capital is very high,” he adds.
Andrew Field, spokesperson for the IHDA, said an affordable apartment is defined as between 30 to 50 per cent of Area Median Income. Therefore, a two-bedroom at 50 per cent works out to US$998. By comparison a two-bedroom at market rate is $5,594, “so a significant difference.”
Field added his agency’s bond issue “is certainly helping get this development off the ground.”
Field said IHDA’s mission is to create as much affordable housing as possible. Breaking into the “typically very very high priced” Streeterville neighborhood with 127 units means lower income people can live in a choicer area.
Field said the neighborhood is an ideal people place close to Navy Pier and DuSable Park alongside Lake Michigan which had been closed and is being redeveloped thanks to a $10 million donation from Related.
Michael Edwards, CEO of the Chicago Loop Alliance, applauded the project, saying “there is more demand now for living in downtown Chicago and the Chicago Loop.”
He said “people have rediscovered the Chicago riverfront” which empties into Lake Michigan.
“It’s just kind of an interesting active place.”
Besides entertainment and cultural attractions, the Loop “is a very walkable” place, he said. “In 15 minutes, you can do a lot of different things here.”
To have the former Spire site finally filled in is “like a new day,” Edwards added.
As for actual construction, Related is carefully planning how to move heavy equipment into and out of the congested neighborhood and minimize noise with weekday construction only and between 8 a.m. and 8 p.m.
The tower’s foundation and garage will fill and cover the gigantic hole while using some of the defunct building’s caissons.
Recent Comments
comments for this post are closed