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City chooses developer to acquire, renovate two South Loop buildings

The city has found a buyer for two of four buildings in a key South Loop block. | Provided

Two months ago, Mayor Rahm Emanuel put four vacant State Street buildings out to bid to remove what he called “monumental obstacles to development of an entire block” in the South Loop.

On Thursday, the longstanding impediment was removed.

The mayor announced that two of those buildings — at 202 and 220 South State — are being sold to the city’s designated developer, CA Ventures, in a three-way transaction brokered by the city that will pay the General Services Administration $10.38 million.

That will pave the way for CA Ventures to spend $141 million to redevelop the “venerable” buildings on the marquee street.

The 16-story Century Building, 202 S. State, was designed by Holabird & Roche and completed in 1915. It will be rehabilitated and expanded to accommodate 159 furnished studio and one-bedroom apartments.

The 22-story Consumers Building at 220 S. State, completed in 1913, will be rehabbed to create 270 “micro” apartments.

City Hall said the buildings will have a 25,000-square-foot retail and commercial base that will incorporate the historic storefront at 214 S. State St., designed by architect Isadore Alexander and completed in 1935.

The buildings in between those two anchors — at 212 and 214 S. State — are three- and six-stories tall respectively. The 212 S. State building will be demolished to make way for a 15-story building. Historic features of the building at 214 S. State will be retained as part of a newly constructed two-story building.

All four buildings were acquired by the federal government in 2005, amid plans for another federal building complex to buffer the courthouse and government office buildings nearby.

The GSA nixed the project and opted to unload the buildings.

Emanuel said the adaptive reuse of the two, century-old buildings will “enhance the ongoing renaissance of the Loop’s historic shopping corridor.”

“Redevelopment of this section of State Street will ensure its future will be even brighter than its storied past,” the mayor was quoted as saying in a press release.

“This project represents a significant investment in Chicago that will generate economic opportunities, revitalize an underused asset and contribute millions of dollars to expand affordable housing in our neighborhoods,” he added.

Downtown Ald. Brendan Reilly (42nd) said the sale of the two South Loop buildings “presents an exciting opportunity to dramatically improve and reactivate retail frontage” along a key stretch of State Street.

Reilly noted that he has been a “strong supporter of adaptive reuse of historic buildings downtown” during his 10 years in the City Council. He called the project an “important step toward the transformation of this historic stretch” of State Street.

“The Loop is one of the largest college campuses in the Midwest — with nearly 60,000 students attending our downtown universities,” Reilly wrote in an email to the Chicago Sun-Times. “Introducing a residential component to these former commercial buildings could help fill a growing demand for smaller, less expensive rental units for the growing student population in the Loop.”

Bids were accepted only for renovation, not demolition of the two buildings sold to CA Ventures. Both are considered “contributing structures” to the Loop Retail Historic District. It might even meet the criteria for designation as a Chicago landmark.

The city was open to demolishing the buildings in between, but only if developers agreed to preserve the storefront at the 131-year-old building at 214 S. State.

The 350,000-square foot South Loop project is expected to trigger a $4.4 million payment to the Neighborhood Opportunity Fund and $5.65 million for a fund created to build affordable housing.

Emanuel created the Neighborhood Opportunity Fund to
rebuild neighborhood commercial corridors with contributions from developers allowed to build bigger and taller downtown projects.

The project is also expected to create 200 temporary construction jobs and 100 permanent jobs.

CA Ventures is a partnership between developers J.J. Smith, Keith Giles and Joe Slezak. They have a track record for “historic reuse” projects.

“The historical significance of the properties at 202-220 South State Street is just one reason we are so excited to be selected to bring new residential options to this vibrant part of Chicago’s South Loop,” Smith, a principal at CA Ventures, was quoted as saying.

“Our firm is uniquely qualified to maintain the character of the neighborhood via this redevelopment. We successfully converted the Old Colony Building into modern apartments and transformed the Gibbons and Steger buildings into the Infinite Apartments just blocks away from the State Street site, both of which have ground floor retail as well. With this latest historic preservation project, we plan to remove and catalogue the storefront and upper-level facade elements of 214 South State Street in hopes of restoring the Art Deco accents for future reinstallation.”

John Cooke, the GSA’s acting regional administrator, said the three-way transaction brokered by the city allows the agency to “find new uses for properties that are no longer critical to the federal government’s needs.”

“It will make better use of these real estate assets and help the City of Chicago continue to revitalize the State Street corridor,” Cooke was quoted as saying.