Real estate professionals and preservationists are applauding the recent trend to convert antiquated office space in the Historic Michigan Boulevard District to condominiums.
Currently seven buildings out of the 39 forming the Michigan Avenue "Streetwall" have been converted or soon will be. Some predict that within 10 years half of the buildings fronting Grant Park will be residential.
One of the pioneers of this trend, Metropolitan Properties of Chicago, has begun selling units in their second project in five years. The Chicago architecture firm Papageorge/Haymes Ltd. is designing the conversion into condominiums of the Karpen and Straus buildings, at 318 and 310 South Michigan Ave., respectively. The Straus building is being renamed Metropolitan Tower.
Louis D'Angelo, president of Metropolitan, presented plans for the renovated building to a Grant Park Advisory Council meeting on Jan. 18, at Daley Bicentennial, 337 E. Randolph Street.
Opponents of the 2002 designation by the Commission on Chicago Landmarks of Michigan Avenue from Randolph Street to 11th Street as a landmark district predicted that the legislation would inhibit new development in the area.
To some extent their fears have been borne out, as office tenants continue to head west toward the Chicago River. But the exodus in office tenants is making room for an influx in residential owners, as condo demand continues to rise in the South and East Loop.
In order to convert an office tower in the landmark district to condos, the Commission on Chicago Landmarks must approve the developer's plans, and it is mandatory to seek community input, according to an official with the Landmarks Division.
Bob O'Neill, president of the Grant Park Advisory Council, said in a phone conversation Jan. 19 that, "One of the issues in downtown Chicago is the tremendous demand for high-tech buildings. These older buildings cannot attract a lot of [commercial] tenants because they are so outdated."
The conversions in the landmark district began five years ago with the Karpen-Standard Oil building, 910 S. Michigan Ave. developed by Vilas Development Corp. That building was followed by Metropolitan's work on the top six stories of the McCormick Building, 330 S. Michigan Ave., developing 78 residential units.
More recently, Frankel & Giles created 36 units in the Crane Building, 888 S. Michigan Ave. The Monroe Building, at 104 S. Michigan Ave., is rumored to be going condo shortly. And another building further north, the Montgomery Ward Building, at 6 N. Michigan Ave., is stalled in the midst of a conversion to condos.
Despite the problems of one property, real estate experts see a strong market. Gail Lissner, who tracks downtown condo sales as a vice president at Appraisal Research Counselors, a Chicago-based real estate consulting firm, call the area prime real estate for residential development.
"People want to live overlooking the park. Anything fronting the park is showing great strength in the market," she said.
Millennium Park, according to Jeffrey Key, president of the Greater South Loop Association, is one of the draws for the new condos. He did, however, acknowledge a downside to the trend he called a "wonderful thing."
The quadrennial full façade inspection could leave some condo owners with large special assessments if the renovation is not done well.
City studies from the 1990s expressed concern for the future of some of these older structures, say Brian Goeken, deputy commissioner for the city's Landmarks Division. The city is glad to see the conversions, and "has encouraged the adaptive reuse" of the buildings.
The 430-foot Metropolitan Tower, built in 1923 for the investment-banking firm S.W. Straus and Co., is the tallest building in the landmark district. D'Angelo said his family bought the property in 1977.
The rehabbed Tower, which should be completed in the next several years, will house 244 units, including seven penthouses in the tower and town homes on the second and third floors. Prices start at $281,500 for a one bedroom, $404,500 for a two bedroom, $920,000 for a three bedroom, and $1.6 million for the town homes. The penthouses will be priced in the spring.
Changes to the exterior of the building will be minor, D'Angelo said, including the addition of balconies to the south wall of the building, facing the McCormick Building, and the renovation of the blue "beehive" on the tower.
There will also be display boxes added to the lower floors fronting Jackson Blvd., to disguise the 295-space parking garage to be built in the rear portion of those floors. Cars will enter the garage from an alley off Jackson Blvd.
One addition to the building will be a modern, $1 million elevator shaft, requested by the fire department for safety reasons. The structure will be added to the rear of the tower, and will not be visible from most street views, according to the architects.
D'Angelo says the much smaller, 78-foot-tall Karpen building, squeezed between the Metropolitan and the McCormick, will be converted into about five units. He said his plans for the building include a "high-end, white table cloth restaurant," with outdoor seating during the summer.
There are several other buildings in the landmark district that are "ripe" for conversion, according to O'Neill, who mentioned the vacant seven-story YWCA Building at 833 S. Michigan Ave., and the 36-story Willoughby Tower at 8 S. Michigan Ave.
Downtown watchers, such as Michael Moran, vice president of Preservation Chicago, see the condo trend increasing, heading toward what he calls a "critical mass of residents," which could lead to an additional influx of residents.
He said that, "Over the next 10 years, this strip might become more like New York's Central Park West, with a majority of the buildings being residential in use."
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