News Coverage

Building sale promises Randolph St. upgrade

July 6, 2005

A firm that builds and operates apartment buildings has closed on the acquisition of a Jazz Age office building in the Loop. The deal could serve as a catalyst for improvement on a grubby stretch of Randolph Street.

Village Green Cos., in partnership with Everhardt & Nesis Co., has purchased the 45-story 188 W. Randolph building, best known here in recent years for showering terra cotta upon pedestrians near Randolph and Wells. It was bought out of bankruptcy for $10 million.

Based in Farmington Hills, Mich., Village Green has set itself apart in Chicago by investing in rental apartments and staying with them, not flipping them for condos. Its most recent project here was the conversion of an old office building at 185 N. Wabash into luxury apartments.

The company's chairman, Jonathan Holtzman, said he'll continue operating 188 W. Randolph, also called Randolph Tower, as an office building for 20 months while redevelopment plans are worked out with the city and the terra-cotta repairs continue. He said the building is only about 40 percent occupied and it's possible a major tenant, the Randolph Athletic Club, might remain after the conversion.

The 1929 building by the architectural firm Vitzhum and Burns could accommodate about 300 apartments, Holtzman said. But also of interest is the fate of three small buildings immediately east of 188 W. Randolph, properties the city once considered condemning for redevelopment.

Holtzman said he believes another buyer has a contract to purchase two of the buildings. The third building, 174 W. Randolph, is city-owned and under one plan would be leveled for a parking lot. He said he will monitor the situation to make sure any development will complement his plans.

Connie Buscemi, spokeswoman for the city's planning department, said the agency is unaware of any pending sale of the small buildings. No action has been taken on the parking lot proposed by Clovis Investment LLC. The design calls for cars to access the lot via an alley, something other parking operators grumbled the city would never allow anywhere else.

WEST SIDE DOWNSIZING: Harlem Irving Cos. and investor William Senne have taken a scalpel to plans for new condominiums on the site occupied by the Chicago Christian Industrial League at 123 S. Green. What was supposed to be 280 units has been whittled to 180 units in two 11-story buildings, said Rick Filler, Harlem Irving's development director.

Progress on the nearly full-block site has been slower than expected and the allowable density on the property became more restrictive when the city enacted a new zoning ordinance. But Filler said market conditions, not zoning, led to changes in the project's design.

The league, one of the region's leading service organizations for the poor, is moving to 2750 W. Roosevelt, where their new home is under construction. Executive Director Judy McIntyre said the group hopes to be in the new space a year from now. Its current base is a warren of rundown buildings now out of character with the surrounding neighborhood.

The land sale on Green Street closed last year but McIntyre said her group couldn't vacate the premises as quickly as it thought. She praised the developers for their patience and for giving the league extensions to stay at the property rent-free.

INDUSTRIAL STRENGTH: The Chicago area's industrial market served up a hopeful sign of economic growth in the second quarter. Vacancy levels declined during the period in both the city and suburbs, said research from Trammell Crow Co.

Suburban vacancy now stands at 9 percent, compared with 9.5 percent at the end of the first quarter, Trammell Crow said. Leasing activity was heaviest along the I-55 corridor and near O'Hare.

Vacancy in the city is 10.3 percent, vs. 10.9 percent at the close of the first quarter, but the research found that all the improvement occurred on the North Side, with the South Side looking slow.

OOPS! My apologies for misspelling the name of Chuck Fendrich, senior vice president of Shorenstein Co. LLC, in last week's column.

DOING THE DEALS: It's not big, but it's a start. The NanoBusiness Alliance, an advocacy group for the nanotechnology industry, is becoming the first tenant in Forest City Enterprises' Science & Technology Park in Skokie. The group is taking 550 square feet in a move from downtown. The project at 4901 Searle Pkwy. ultimately calls for a million square feet in nine buildings. Forest City bought the old G.D. Searle site from Pfizer for $43 million. Boutique law firm Donohue Brown Mathewson & Smyth is expanding its space at 140 S. Dearborn, the landmark Marquette Building. Represented by Geraghty Group, the firm is going from 24,000 to 34,000 square feet. ...Jones Lang LaSalle Inc. signed Tetra Tech for 26,000 square feet at 1 S. Wacker. CB Richard Ellis represented Tetra Tech.