Seems like yesterday that Helmut Jahn, a star architect even then, stood before Chicago’s Urban Renewal Board and described his “vision” for Block 37 in the North Loop.
Actually it was 17 years ago, though my notes from the meeting look like they were scribbled yesterday.
“We will combine the language of the new building with that of the old ,” said Jahn, resplendent that August afternoon in his saddle shoes and continental-cut summer suit.
The board had gathered to see presentations by two teams competing to redevelop the now-infamous block between the Daley Civic Center and Marshall Field’s State Street store.
One partnership was called Sidcor Loop Associates. It offered to pay the city $15 million for that portion of the block it didn’t already own and to build a straightforward office-over-retail structure to be designed by Donald Hackl.
The other was FJV Venture Corp. It offered to pay $12.5 million for the piece it didn’t own and to build, well, to build a Helmut Jahn.
The German-born, Chicago-based architect told the board he was inspired by the original “Galleria” in Milan. His drawings were spectacular. A curved, five-story vaulted-glass shopping atrium swooped through the middle of the block, east to west, visually connecting Field’s famous display windows with the Picasso in Daley Plaza. Just as neatly, the grand enclosed space connected two shimmering office towers sited on Randolph and Washington Streets. Best of all, Jahn proposed not just to restore, but to draw inspiration from, the landmark McCarthy Building. The post-Fire Italianate gem at the corner of Dearborn and Washington was designed by Chicago’s first architect, John Van Osdel.
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For a hot moment there, at that 1983 meeting, I thought Elizabeth “Liz” Hollander, the late Mayor Harold Washington’s commissioner of planning, was going to leap from her chair and kiss the hem of Jahn’s imported coat.
It was no contest. FJV won going away.
So began the sad story of Block 37, one of the most embarrassing failures in the history of American urban renewal.
The city proceeded to condemn those pieces of the block controlled by Sidcor and others at a total cost of $42 million, including professional fees and relocation assistance. It then sold the property to FJV for the agreed-to price of $12.5 million, making the initial “write-down” subsidy about $30 million.
Pretty soon FJV said it couldn’t proceed unless it could knock down the McCarthy Building, which interfered with FJV’s revised plan for parking ramps on that corner. Commissioner Hollander swallowed hard and had the McCarthy de-landmarked so it could be demolished. At least the city would still get that sensational Jahn design and a $400 million property-tax cow.
But months turned into years and FJV couldn’t get its act together.
Granted, the market for office space tanked in the early ’90s, though somehow other downtown developers managed to snag build-to-suit clients like Leo Burnett advertising, Blue Cross-Blue Shield and Chicago Title & Trust. Such was FJV’s marketing prowess that when Cook County needed loads of space for additional courtrooms and offices, FJV ended up buying the Brunswick Building directly across the street. Meanwhile, carrying costs squeezed out two of FJV’s three corporate partners, leaving JMB Realty and its president, Neil Bluhm, in charge.
Bluhm tried several combinations of hotels and movie theaters, stores and residential towers. His spokesperson complains city planners kept changing their minds about what the project should include. Perhaps so. But from the outside, it has looked like prospective tenants either get cold feet . . . or warm palms for more public subsidies. Two years ago Bluhm said he had Macy’s, the big New York retailer, on the hook. But Macy’s wanted a $55 million tax subsidy. Mayor Richard Daley called that “ludicrous,” which is exactly what it was. Now Bluhm is back with Lord & Taylor, which could be talked into locating an upscale department store within a retail-hotel-condominium complex for only $41 million in city funds.
So Daley has a decision to make. Lately the mayor has been handing out eight-figure subsidies to get or to keep companies like Sears Roebuck and Quaker Oats. The city needs to be competitive, he argues, often compellingly. But on Block 37, where the city already has sunk $30 million, Daley has indicated he’ll chip in no more than $34 million from the downtown property tax fund.
Some of his advisers, though, are telling Daley to split the difference and be done with it. They’re saying it would be worth $38 million-or-so to get Block 37 monkey off his back.
I’ve got a better idea.
Burton Natarus, the downtown alderman, has placed before the City Council an ordinance to terminate FJV’s urban renewal contract for lack of performance. It authorizes the city to condemn their two lots on Block 37 and to go find another developer who can get the job done.
Insiders say Bluhm/FJV still wants to develop the block and would need $65 million to “go away.”
After 17 years, the only thing Daley should say to that is: See you in court.
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