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PARALLEL UNIVERSE: World’s Most Famous Vacant Lot Under Development in Chicago’s Loop

Posted by kinchendavid on July 25, 2006

By David M. Kinchen

Chicago, IL – Every time I visit Chicago – at least once a year, sometimes more often – I walk down State Street and take a look at the most famous vacant lot in the world – Block 37 – a lot that inspired a wonderful 1996 book by a nephew of the late playwright Arthur Miller.

“Here’s The Deal: The Buying and Selling of a Great American City” by Ross Miller is really a look at the politics of development in a big city. It centers on the three-acre Block 37 – an original part of the 1830 plan for Chicago – bounded by State Street, Washington Street, Dearborn Street and Randolph Street. I strongly recommend “Here’s The Deal” for anyone interested in how things get done – or in the case of Block 37 for almost 20 years – don’t get done in a major city. In the wake of the U.S. Supreme Court’s infamous Kelo vs. City of New London decision in June 2005, the book is even more relevant a decade after its publication.

So it was with great surprise that during my mid-July 2006 visit to my favorite city I came upon construction workers and fences across the street from Marshall Field’s – it still hasn’t been rebadged with Macy signs – telling of the wonders to come at 108 North State Street, a mixed-use office, retail and residential project by the Mills Corp., Arlington, VA. The northern Virginia developer broke ground Nov. 15, 2005 – not long after my September trip to Chicago – on 108 North State Street.

Here’s what the press release has to say: “The complex will feature retail, entertainment and dining offerings; a state-of-the-art CTA transit station providing service to and from Chicago’s O’Hare and Midway airports; office space; a luxury hotel and residential units.”

Mayor Richard M. Daley: “This is a great day for all the residents of the city of Chicago. We’re beginning construction of a one-of-a-kind retail, residential, entertainment and transportation center that will make downtown Chicago even more attractive and enjoyable than it is today. And this new project isn’t just about downtown. It will benefit every neighborhood, by providing 2,700 jobs for the hard-working people of our city – on top of hundreds of construction jobs.”

“By entering the construction phase of this project, The Mills has accomplished what no other developer has been able to achieve with this site,” said Laurence C. Siegel, chairman and chief executive officer of The Mills Corporation. “We look forward to transforming this high profile, long-vacant land parcel into a vibrant new destination that will create tremendous value for our investors, the City of Chicago and visitors to 108 North State Street and the Loop.”

To date, The Mills has received commitments from several retail tenants for 108 N. State Street, including CBS 2 Chicago Broadcast Center, Boggi Milano, Sisley, Andrew’s Ties, Banana Republic, Rosa Mexicano, David Barton Gym and new concepts by Steve Lombardo, creator of Gibsons Steakhouse and Hugo’s Frog Bar, and Steven Foster, creator of Lucky Strike Lanes in Hollywood. In addition, a CTA transit station will also be a part of 108 North State Street.

Mills is the developer of shopping centers that usually have the name “Mills” in their designation: Gurnee Mills north of Chicago, Ontario Mills in Southern California, etc. Their web site — http://www.themills.com. — describes the publicly traded firm (NYSE: MLS) as a “developer, owner and manager of a diversified global portfolio of retail destinations.”

Mills – usually referred to in printed material as The Mills — currently owns 42 properties in the U.S., Canada and Europe, totaling 51 million square feet. In addition, The Mills has various projects in development, redevelopment or under construction around the world. Its portfolio of real estate properties generated more than $8.7 billion in retail sales in 2004. Again from the press release of last November: “As part of the groundbreaking ceremony, The Mills also unveiled the latest architectural designs of the project. The designs feature transparent corners of the project’s facade that will pull visitors into the space, and each corner will feature a different component to surprise and delight visitors, whether with the CBS studio, restaurants, or dynamic retail options. Crystal-clear street-level glass panes will create a seamless experience between the building’s interior and exterior.

“The Mills has assembled a team of world-class architectural designers and artists for the design of 108 N. State Street. The team includes: Gensler, Perkins + Will, Rockwell Group and James Carpenter, an artist known for developing new and emerging glass and material technologies.

“I’m excited for the city and for what this project and our new Broadcast Center will mean for this block,” said Joe Ahern, President and General Manager of CBS 2 Chicago. “And, I’m even more excited for our viewers who will experience something fresh and dynamic each day when they turn to CBS 2.”

“Today’s groundbreaking is significant for the CTA both for the state-of-the-art transit station that will provide convenient airport service for our customers, but also for the partnership with the City of Chicago and The Mills that made it possible to leverage our resources for an extraordinarily important infrastructure improvement that provides a critical rail link for our entire system,” said Frank Kruesi, president of Chicago Transit Authority.

“The Mills completed the purchase of the land parcel at 108 North State Street from the City of Chicago on November 11. The CBS 2 Chicago studio and office tower are expected to be completed by late 2007, and the retail, dining and entertainment component is estimated to be completed by Spring 2008.

“Located in the heart of the City of Chicago, 108 North State Street will be an urban mixed-use destination. The new Chicago icon will feature approximately 400,000 square feet of gross building area (GBA) of retail, entertainment and dining offerings and a state-of-the-art CTA transit station providing service to and from Chicago’s O’Hare and Midway airports; 200,000 to 450,000 square feet of office space; a 200- to 300-room hotel; a 200- to 300-unit residential tower.”

Sounds a lot like the Time Warner Center at Columbus Circle in Manhattan, only on a smaller scale. That project, which I toured in the fall of 2004, has twin skyscrapers, retail, residential and broadcast facilities. I’ve read a number of blogs detailing problems facing the project, including work stoppages and financing falling through, but it appears that development will appear on Block 37. Chicago is a maze of construction, with work progressing on the Trump project on the site of the old Sun-Times building and dozens of condo towers, many just north of Millennium Park near Randolph, Wacker and Columbus.

So if all goes well – not a sure thing in the risky world of real estate development — the world’s most famous vacant lot will be vacant no longer. I remember the area from my days of living in Chicago in the early 1960s. It contained a jumble of buildings, including a supermarket that I frequented in my walks from my office at Madison and Wacker. You could find just about anything in the block, from discount clothing and shoe stores to movie theaters showing the kind of movies that once were prevalent in Times Square. Ross Miller describes the area very well before the site was razed in the late 1980s.

Here’s Ross Miller’s vivid – he’s an English professor and a great writer — description of Block 37:

“The story of Block 37 is the history of the American downtown in microcosm. At the center of Chicago, this typical urban block missed no trend, from the first office buildings in the 1870s to the early skyscrapers of the 1890s and the supermarkets of the 1930s. Even through long decades of decline, from the perceived street anarchy of the 1960s to the massive urban renewal of the 1980s that finally demolished the block, Block 37 has mirrored the enthusiasms and fears of the city. The movie palaces, seedy political hangouts, fine billiard parlor, novelty store, and gourmet food hall made it a primary destination for those seeking the Loop’s pleasures. Also a place of work where small newspapers were published, violins repaired, hair cut, and fortunes read, this one city block, in its prime, attracted thousands of people an hour. On a typical day it housed the population of a small town, only to be completely empty at night. All the city’s variety was packed into 16 buildings of various size and condition. Its landlords, high and low, were among Chicago’s first families and fabled entrepreneurs. A scene for brilliant acts of charity and extraordinary moments of predation, Block 37 was a prime arena for the urban arts, from fly-by-night retailing and three-card monte to international real-estate deals involving hundreds of millions of dollars. To understand the rise and fall of this one block in some of its daunting detail is to appreciate Chicago’s unique attraction to city lovers and haters alike. To know Block 37 is to know Chicago. “Favored by its unique geography, the land that was to become Block 37 already had a rich history before the first Europeans canoed into the swampy prairie on Lake Michigan. At least 100 years before Chicago was surveyed, scribed, and squared, the Potawatomis pursued an active commercial life on the site. With its proximity to the lake and to the main branch of the Chicago River, the block was important too after Fort Dearborn was established and the area became a key area of settlement of the Northwest Territories.

“The block was platted in James R. Thompson’s 1830 survey and numbered as one of the city’s original 58 blocks. Its strategic location between State and Dearborn Streets to the east and west and Randolph and Washington to the north and south assured that the block’s original eight lots, equally cut from only 120,000 square feet of ground, would become fully deployed in the city’s remarkable political, commercial, and industrial development. “After Chicago’s incorporation as a town in 1833, Block 37, situated only several hundred yards from the Cook County courthouse and across the street from the city’s largest bank, boomed along with the city. When the Great Fire of October 8, 1871, razed the entire downtown, the block had already been densely developed for decades. Rebuilt immediately after the fire at over four times its original square footage and increasingly added to over the next century, Block 37 shared the fortunes of other American downtowns from New York to San Francisco. Resiliently prosperous and endlessly inventive in the sort of commerce it could support, the block survived not only the fire, but a worldwide Depression and a host of cunning mayors and dealmakers, until it finally fell prey in 1989 to the final “improvement” that flattened, in the name of urban renewal, every one of its buildings—including, without distinction, its architectural treasures and notorious firetraps.

“Block 37 was, in the end, a victim of the very trends that it had so efficiently exploited in the past. After the World War II, as Chicago’s population began its permanent migration away from the core and out to the suburbs, the block started to suffer from the neglect that would eventually make it a candidate for urban renewal. Beginning in the early 1960s, the historic Loop was bypassed for the redevelopment of North Michigan Avenue. The old downtown was perceived and relentlessly advertised as hopelessly decayed and dangerous. The once superior location of Block 37 at the matrix of the city’s political, commercial, and social life now doomed it. By the 1970s, State Street had lost its preeminence as a shopping center to the department stores on Michigan Avenue and to the large regional malls multiplying out in the suburbs. The entertainment “rialto” along Randolph—Chicago’s equivalent to Times Square—had closed down its live shows and was subsisting on pornography and action films, while on Washington Street, the gourmet shop Stop and Shop, a city institution, went out of business. Offices for lawyers, political activists, and skilled artisans on the block’s Dearborn Street side went unrented as the center of Chicago shifted to the grand new towers of the West Loop. None of the billions of dollars flooding the city during the skyscraper boom of the 1980s reached Block 37 in time.

“Ironically, the block’s very dereliction became its last chance.

Speculators and city hall insiders had written down the land values of the entire North Loop to the point in 1979 when the Chicago Plan Commission declared 26.74 acres, seven full or partial blocks including Block 37, “blighted.” This designation qualified the area for a “taking.” Once valuable commercial property was seized from its lawful owners, condemned, and written down as worthless. After speculators had delayed the taking almost a decade and bid up land costs, the city paid nearly $250 million for the entire North Loop, including nearly $40 million for Block 37 alone. In 1983 a local development group, JMB, won the rights to develop the entire block. A series of delays, beginning with a challenge from historic preservationists and prolonged by costly legal battles, put off the block’s demolition until 1989, when the city completely leveled the land and traded the title to the developers for $12.5 million, less than a third of what it had paid. Plans to build two towers and a large retail mall fell prey to the national real-estate crash of 1990. For almost a decade, the block was put to temporary use as a winter skating rink and a summer student art gallery.

At the opening of the twenty-first century, this once diverse and active place still lies empty, an unwanted orphan of progress. The history of Block 37 will continue to mirror the rise and fall of Chicago’s downtown. Its long and various history is an intimate calibration of the history of a great American city.”

–Ross Miller

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