Two high-profile Chicago eyesores that for four years served as testimonials to the recession’s chill on real estate have found new life in recently announced developments. Once destined to be the first Shangri-La Hotel in the United States, the concrete base at 111 West Wacker Drive has stood unfinished since May 2008. The then-named Waterview Tower was originally designed as a 1,000-foot, 1.3-million-square-foot luxury hotel and condominium building. But without end financing, Teng & Associates abandoned the project.
In 2011, developer Related Midwest revived the stalled project with money from their recovery fund, which focuses on distressed properties. The new plans call for a slightly shorter tower, but at 57 stories the new design should easily fit in among the towers of Wacker Drive’s canyon.
“One eleven West Wacker Drive is an incredibly prominent location in Chicago. In fact, the architectural boat tour starts at this location,” said Related Midwest president and CEO, Curt Bailey. “We recognize the significance of the location and are designing a building befitting its importance. It’ll be an incredible addition to the Chicago skyline,” Bailey told Bloomberg News.
Just half a mile north at 127 West Huron Street, fresh investment has reinvigorated another stalled development, in River North. Oxford Capital Group is expected to fulfill the potential of 16-story Staybridge Suites by completing construction on an upscale hotel sometime next year.
Wrapped in white sheets like a mummy since the money ran out four years ago, the Valerio Dewalt Train–designed high-rise is the first building in Chicago to employ a staggered truss system.
Oxford’s reboot is expected to maintain the architecture firm’s exterior design, with a modified interior design and program. Instead of an extended-stay hotel, 127 West Huron will be a lifestyle-boutique hotel designed to complement Oxford’s upscale Hotel Felix next door.
Though they sometimes arrive with baggage, distressed deals also come at a discount. If the Chicago hotel and rental markets rebound as expected, Related and Oxford could turn yesterday’s zombies into relatively safe investments.
Census data shows that even while Chicago’s overall population declined markedly over the last decade, the population downtown has ballooned. The Loop saw a 76 percent increase in inhabitants between 2000 and 2010, even while downtown jobs declined by 60,000. Mayor Rahm Emanuel, in a bid to cast off the legacy of Chicago’s “lost decade,” announced his plan for economic development in February, promising jobs and growth.
Of course, sluggish growth threatens the general economy’s recovery, which could undercut the positive momentum seen locally. In resurrecting these downtown developments, Related Midwest and Oxord Capital appear confident that the U.S. economy will continue to heal.