CHICAGO | 108 North State (Block 37)

[ardecila]

Originally Posted by SamInTheLoop

There was always far too much government involvement in general in block 37 (real estate development is clearly not a core competency of any government unit), and I agree with you that the edict for a large mixed-use project further set it up for 'challenges'...such projects have a fairly poor overall track record - at least financially speaking - across the U.S. due in part to the complexities in hitting multiple property type market cycles within the same project. However, there is nothing fundamentally 'wrong' with the retail component at block 37 from a market viability perspective....the concept, layout, etc works - provided its filled with wise choices as tenants. The reason the mall is only 40% or whatever leased has little to do, frankly, with market fundamentals - it has virtually everything to do with the project being dramatically undercapitalized, the construction loan presumably being tremendously underwater, seemingly little money either being available, or being made available for necessary tenant improvement work to both land tenants initially and allow them to open once signed on, and.....oh yeah - the project going through the foreclosure process. What caused all this? Certainly the fact that it would appear that far too little equity was contributed to the project (the property was remarkably over-leveraged) certainly didn't help....but also let's not forget that commercial real estate values in general nosedived 30-50% (for development projects, it would probably lean toward the high-end of this range, if not even slightly higher) over the 2008-2009 period. Finally, although this project has faced so many setbacks over the past 20+ years that I've completely lost track, one of the more (granted, in hindsight, which is invariably 20/20), shall we say, boneheaded decisions, was the selection by the city 7 or 8 years ago of Mills Corporation to be the master developer. It was a positively indefensible choice that I believe really hobbled the project in so many ways during the height (2003-2006) of the decade's commercial property boom, which by the end of 2007 or so a fabulous, vibrant, gold-plate tenanted mixed-use office/retail/entertainment/dining residential/hotel/transit could have been successfully delivered to the market...

I take it this should be moved to the block 37 thread...

Agreed 100%... The complexities of construction led to delays that made the retail space hit the market at the absolute worst time. It says something for the Chicago economy that retailers are STILL interested in spaces at Block 37, but are hesitant or unable to move forward because of Freed's financial woes.

I'm optimistic that the mall will get filled eventually. The Empire State Building sat mostly empty for a decade before tenants started moving in. Compared to that much square footage, Block 37 should be easy to fill!

[spyguy]

http://www.chicagorealestatedaily.co...37-foreclosure

Freed cites recession to stop Block 37 foreclosure
By: Eddie Baeb November 05, 2010

In a last-ditch effort to avoid losing the Block 37 mall, Joseph Freed & Associates LLC wants to use the severity of the recession as a defense against a foreclosure suit.

...Freed also said in its filing last month that the leasing restrictions imposed by the redevelopment agreement with the city — which call for unique tenants and prohibit some uses — further hampered the developer’s efforts.

[spyguy]

Block 37...with people?!


Nathan Kam/ flickr

Or is it an illusion?

Nathan Kam/ flickr

Ladies & Gentlemen now open on the third floor (all photos from their Facebook page)



Hardcore Block 37 enthusiasts - maybe he's the foursquare mayor?

[spyguy]

http://www.chicagorealestatedaily.co...7-mall-to-bank

Judge gives Block 37 mall to bank
By: Eddie Baeb November 19, 2010

Developer Laurance Freed has lost his battle to keep Block 37.

A Cook County Circuit Court Judge on Friday issued a foreclosure order against the four-level downtown shopping center, which means a foreclosure sale could be set in the next two months.

[spyguy]

Simply Thalia (pedway)

Simply Thalia/ Facebook


Block 37/ Facebook

It's been nearly one year since the first stores at Block 37 opened. While I've been critical of the way leasing has been handled and the quality of potential new tenants, I do commend the receiver for the amount of work that has taken place in the last few months. Nearly all of the confirmed stores are now open. Opening the Lettuce food court and getting better entertainment venues will go a long way towards fixing the rest of Block 37's problems.

[killaviews]

Let's hope the banks turn around and sells this quick. I remember a while ago the suspicion that Buck could acquire the project. They could have a buyer lined up already. That would be awesome.

[spyguy]

Smart move. It would have been a huge error to let go of such a high quality tenant. As for the gym, theater, and others, I don't really care and I'm sort of glad that TI hasn't been approved for them. Hopefully they'll find better tenants.


http://www.chicagorealestatedaily.co...lock-37-tenant

Lenders approve buildout money for Block 37 tenant
By: Eddie Baeb November 24, 2010

While banks are far from en vogue these days, they may be coming around — at least a little bit — at Block 37.

The lending group on the year-old Block 37 mall, which on Friday won a judge’s order for foreclosure, has agreed to fund the buildout of a new store for Eileen Fisher, an upscale women’s apparel chain.

[Nowhereman1280]

Originally Posted by spyguy

Hardcore Block 37 enthusiasts - maybe he's the foursquare mayor?

Man that guy's a real blockhead...

[spyguy]

http://www.myfoxchicago.com/dpp/news...merce-20101206

Chicago Chamber of Commerce Pushes 'Block 37' Casino Plan
By Mike Flannery

The CEO of Chicago's leading business association said on Monday he thinks a casino should go into the long-troubled Block 37 development right in the Loop.
---

A Harrods on State Street? Cirque du Soleil in the Sullivan Center? I hope this is a rumor otherwise I have to wonder what he's on.

There's a reason why slots and table games are always in front of the main entrance(s), not on the fourth floor, with shops and restaurants on the perimeter.

[trvlr70]

Originally Posted by spyguy

[url]A Harrods on State Street? Cirque du Soleil in the Sullivan Center? I hope this is a rumor otherwise I have to wonder what he's on..

Give me a break. It would be a waste of time to even ponder such ridiculous, not going to happen ideas.

[Chicagoguy]

Originally Posted by spyguy

http://www.myfoxchicago.com/dpp/news...merce-20101206

Chicago Chamber of Commerce Pushes 'Block 37' Casino Plan
By Mike Flannery

The CEO of Chicago's leading business association said on Monday he thinks a casino should go into the long-troubled Block 37 development right in the Loop.
---

A Harrods on State Street? Cirque du Soleil in the Sullivan Center? I hope this is a rumor otherwise I have to wonder what he's on.

There's a reason why slots and table games are always in front of the main entrance(s), not on the fourth floor, with shops and restaurants on the perimeter.

Oh how one could dream right? I think State Street would be a great location for a Cirque du Soleil show, but not in the Sullivan Center. I actually wouldn't mind a casino in Block 37...I think it would draw alot of people in and honestly the mall would fill right up then. If we see a casino go in I think that mall would start to transition to more upscale stores...ie Coach, Louis Vuitton, maybe a couple nice jewelery stores, and so on. I mean think of all the money that could be spent when people are winning!

[Tom In Chicago]

A casino at Block 37 doesn't sound as far fetched as some might want it to be. . . although I think even as a concept it has serious obstacles and don't anticipate any real discussion about this going forward. . . never say never. . .

. . .

[chicubs111]

i think a casino is a great idea...but wouldnt they need much more space than whats available?... maybe if they incorprate the future tower with the casino i can see some sort of hotel/casino combination

[J_M_Tungsten]

Nothing says classy Chicago like nickel slots on State!

[VivaLFuego]

I'd be surprised if any private casino owner/operator would bite --- as already noted, there's a reason large casinos are generally laid out on a single giant gaming floor, readily accessible from all modes of access (street-level walkins, passageway from parking garage, or direct connection from transit stations, or some combination thereof).

Lakeside at McCormick Place, the old Post Office, a substantially renovated Congress Hotel, those are some of the more plausible locations that have circulated.

Never say never, but safe to say highly unlikely.

[pip]

Originally Posted by J_M_Tungsten

Nothing says classy Chicago like nickel slots on State!

haha true!

people ever been to these casinos dotting all over the country? its depressing. tourists now are generally depressing enough, lets not drop the bar any lower.

[tommaso]

http://www.wbez.org/story/block-37/s...e-put-block-37

Should a casino be put in Block 37?
by Tony Arnold Dec. 07, 2010
Listen to this Story

(Photo by Joe Balynas via Flickr)
A casino located in Joliet, Illinois
Chicago's business community is already preparing to add a casino downtown, even before the gambling expansion gets approval from state legislators.

The Illinois legislature is looking for ways to close a budget gap that could reach $15 billion. One proposal the House could vote on next month would create five new casinos in Illinois, including one in Chicago.

"We're a lot further along than we've been in many, many years," Jerry Roper, who heads the Chicagoland Chamber of Commerce, said.

He said he's lobbying representatives and the governor. Roper said if it passes, the new development at Block 37 would be the perfect location for a casino.

"Put it where it's going to have the biggest impact," he said. "Where we don't have to build additional theaters, where we don't have to build addition restaurants."

Block 37 has been going through its own financial rough times lately. The downtown property's developer lost ownership of the mall in a foreclosure suit.

Meantime Gov. Pat Quinn won't say whether he'd sign a gambling expansion bill.

[tommaso]

http://www.myfoxchicago.com/dpp/news...merce-20101206

Chicago Chamber of Commerce Pushes 'Block 37' Casino Plan
Updated: Tuesday, 07 Dec 2010, 8:11 AM CST
Published : Monday, 06 Dec 2010, 7:33 PM CST

By Mike Flannery, FOX Chicago News

Chicago - The CEO of Chicago's leading business association said on Monday he thinks a casino should go into the long-troubled Block 37 development right in the Loop.

Several years after a retail mall opened on the site, much of the building is still vacant.

Leaders of the Chicagoland Chamber of Commerce claim it's the best possible location for a proposed new downtown casino.

"I want it to go in a location that will take advantage of our restaurants, our hotels, Macy's," said Gerald Roper, Chamber of Commerce CEO. "This is the type of amenity we need to have: an entertainment/casino to continue to attract people to our city, to keep people here more than one day, more than two days."

Roper said a casino might draw other attractions to State Street, including perhaps a branch of London's famed Harrod's department store. And the old Carson Pirie Scott store that's been vacant for several years might host a Chicago-based company of Cirque du Soleil.

Roper said a Chicago-based casino could create 17,000 new jobs.

He said the proposed casino would not be garish, like some in Las Vegas, but a tasteful looking casino, similar to how it’s done in European cities.

Last week, the Illinois State Senate passed a bill approving a Chicago casino. The House could vote next month. Quinn's position on the proposal is not yet clear.

The Block 37 location could hold a casino with 4,000 gaming positions, including slots and cards.

[ChiPsy]

^^ Interesting, but baffling in some ways too: Jerry Roper & the Chamber of Commerce are credible thinkers, but would a casino really help Macy's or lure Harrod's to State Street? Isn't Macy's traffic built more on downtown workers and occasional (e.g., Holiday) suburban/city visitors? Would people really hit the slots before shopping for a coat or picking up eye liner?

Meanwhile, is he just talking out of his ass about Cirque du Soleil, or does he have inside news that Target is not filling, after all, the Carson's space?

[ardecila]

How can a circus fit into an old department store with closely-spaced columns?