Chicago developers busy despite talk of a slowdown

Zoning proposals for six large-scale projects in neighborhoods just west and northwest of downtown were submitted Wednesday to the City Council, indicating an active construction market here despite worries about a slowdown.

Four of the new projects are for office buildings and two involve apartment buildings. Industry data have shown commercial property investors have scaled back on Chicago acquisitions this year. The inventory of new residential high-rises also is declining.

Developers and other real estate experts cite worries about property taxes, the debt loads of local government and mandates to build affordable housing as reasons for a go-slow attitude.

But the new zoning filings show continued interest in areas where developers have swarmed. “People seem to be seeing continued office demand, especially in the Fulton Market area. [Developer] Sterling Bay has an unbelievable appetite to build there,” said Alan Lev, chairman of housing developer Belgravia Group.

The zoning requests introduced to the City Council involved these sites:

• 1200 W. Fulton Market, where Ryan Cos. U.S. plans two office buildings containing 556,000 square feet and 335 parking spaces. The tallest would be 300 feet. The project entails a large component of commercial and retail space, about 150,000 square feet.

• 1200 W. Carroll Ave., where Sterling Bay plans a 14-story office building with 90 parking spots.

• 900 W. Fulton Market, site of a nine-story commercial project backed by Buffalo Grove-based Shorewood Development Group.

• 344 N. Canal St., a Cassidy Tire location would be replaced by a 33-story apartment tower with ground-floor retail space. The proponent is Habitat Co., which has declined requests from a preservation group to save a five-story factory on the site that dates from 1902 and was moved to its present home long ago.

• 777 N. Franklin St., where Centrum Properties wants to replace a small building with nine stories of commercial space next to a CTA Brown Line stop.

• 1140 W. Erie St., near Ogden Avenue’s crossing over the Kennedy Expressway, where Chicago-based Bond Cos. wants to build 87 residential units and 33 parking spaces.

Preservation Chicago

The applications will lead to hearings before the City Council’s zoning committee and, in most cases, the Chicago Plan Commission. Developers usually wait for aldermanic consent before they submit a proposal that’s often been critiqued by local groups.

Despite talk of a slowdown, developers seek opportunities in popular locations. Lev said Belgravia plans to move ahead on a condo project in the West Loop, unusual given that housing deals lately have been for rentals.

Lev said his firm plans to start marketing 72 units at the southeast corner of Jackson Boulevard and Racine Avenue. He said he will pursue the project without a zoning change, which means he can avoid the requirements of Chicago’s Affordable Housing Ordinance.

“A lot of developers are starting to make these calculations. They’ll build smaller buildings to avoid having to meet the requirements,” Lev said.

The ordinance requires developers of 10 or more units to set aside 10% of them at prices or rents deemed affordable for those with lower incomes or provide money to build the units elsewhere. It applies when there’s a zoning change or other form of city help.