New construction slated for the Poetry Foundation in River North.

The Poetry Foundation, designed by Chicago’s John Ronan Architects, is slated to begin construction sometime soon at its new location on the Southwest corner of Dearborn and Superior Streets.  The Foundation’s new office is slated to open in June 2011 and will be one of a few actual places devoted to the advancement of poetry in the United States.

You go…Poetry Foundation!  I suppose I never would have thought poetry needed a building to advance itself but if the building turns out like these photos, advance away.  I love the contrast of the black, sleek, modern look next to the older buildings that are made from stone and concrete. 

Check out a nice article from the Poetry Foundation’s website by clicking HERE!

New Retail Space at Presidential Towers Taking Shape!

No photos yet, but from driving by on Jefferson and Monroe Streets, you can definitely tell construction is fully under way for the new retail spaces at Presidential Towers.  You can even see a new addition on the roof of the parking area for what could be part of the new Fitness Formula Club (FFC)  gym. 

Has anyone walked/driven by there to see for themselves?

Ritz-Carlton Residences on Michigan Avenue moving forward! Positive news for sure.

Kuwaiti bank pegs Michigan Avenue condos at $242 million

By: Todd J. Behme Dec. 28, 2009

(Crain’s) — A Kuwaiti bank that has invested in the Ritz-Carlton Residences, a 40-story condominium tower under construction on Michigan Avenue, said Sunday that the project is worth $242 million.

Kuwait Finance House said in a release that it has a 95% stake in the project while Chicago-based Prism Development Co. owns the remaining 5% of the development at 664 N. Michigan Ave.

The investment is a pricey bet that the market for new luxury condos will rebound strongly by 2011, when the project is scheduled to be completed.

The $242 million refers to the gross sales proceeds from the 88 condo units, says Bruce R. Schultz, a principal with Prism. He estimates the cost of the project at $200 million. The development has a $137.5-million construction loan from the German financial institution known as Helaba.

Of the remaining capital in the deal, Kuwait Finance has put up 95%, which would be about $59 million. That includes a $40-million preferred-equity investment when the sale of the site closed last year.

After KFH and Prism each recoup their equity investments, they will split the projects’ profits 50-50, Mr. Schultz says.

The project is about 40% sold, roughly unchanged in more than two years.

But in a hopeful sign, two contracts have been signed in the past 30 days, Mr. Schultz says. The development is slated to be completed at the end of 2011, with the foundation to be complete by March 1.

“We’re moving forward,” Mr. Schultz says, adding that the project is “very fortunate” to have KFH and Helaba on board.

Despite the current slowdown in sales, the project could benefit next year from a pent-up demand for high-end condos, says Gail Spreen, president of residential brokerage Streeterville Properties.

Also, Ritz-Carlton Residences will face less competition than it might have because of cancelled projects, she says….

Check out the full Crain’s Chicago Business article by clicking HERE!

   

Union funds meant to finance The Chicago Spire construction now kaput.

From this week’s In Other News

Chicago Spire twists in wind as union funds pass on bailout loan

By: Eddie Baeb December 21, 2009

Officials at four big investment funds affiliated with labor unions say they’re not interested in rescuing the stalled Chicago Spire project.

Recent reports that Spire developer Garrett Kelleher and union officials are discussing a possible loan rekindled hope that work would resume on the twisting tower, which at 150 stories would be North America’s tallest building.

But two union funds identified by a local labor leader and a Spire spokeswoman as having expressed interest, the AFL-CIO Building Investment Trust and the union-backed life insurer ULLICO Inc., are taking a pass, according to top executives there. Representatives of two others, the AFL-CIO Housing Investment Trust and the Multi-Employer Property Trust, say the Spire isn’t a suitable investment for them.

“It’s not something we’re able to do,” says Edward Smith, president of ULLICO. “Unfortunately, these are just very difficult markets.”

Another union fund or group of funds still could step forward with a loan for the project. Mr. Kelleher also could secure funding from other sources. But the lack of interest from the four big funds narrows the Irish developer’s options as he seeks a financial lifeline for the Spire.

They’re among the largest funds of their kind, controlling about $13 billion in union pension funds and other assets. They also have a history of commercial real estate investing here and around the country, and an interest in backing projects that create jobs for union workers.

Worries about the prospects of the Spire in a moribund real estate market appear to have trumped their desire to help put union members back to work. The funds are no more eager than other real estate investors to risk money on a highly speculative project in the worst downturn in recent memory.

Mr. Kelleher seeks about $170 million in short-term financing to pay off existing debt and move the project forward. It would be a particularly risky loan because the most likely source of funds for repayment would be a construction loan for the $1-billion-plus project. Construction lenders typically advance funds only after a developer sells 50% of the units in a condominium project. After two years of worldwide marketing efforts, Mr. Kelleher has sold about 30% of the Spire’s 1,194 units.

In essence, Mr. Kelleher is asking the union funds to bet on his ability to sell condos in a stagnant downtown housing market, where mortgage and construction financing is hard to come by.

Michael Arnold, head of investor relations for the AFL-CIO Building Investment Trust, says his fund can’t take that risk. “We would obviously like to be helpful,” he says. “We understand the interest, but we’re not any different than other real estate lenders today.”

Thomas Villanova, president of the Chicago & Cook County Building & Construction Trades Council, hopes union fund managers will consider not only financial risk but also the job-creating benefits of the project.

“This just can’t be looked at in a straight investment-type view. You’ve got to add into the equation this would be 7.5 million man-hours for my members,” Mr. Villanova says. “I don’t think we’ve ever seen times as bad as they are now.”

Mr. Villanova organized a meeting in the spring between Mr. Kelleher’s company, Shelbourne Development Group Inc., and representatives of the 24 local unions that comprise his group. He says some local union officials met with Shelbourne again, but he can’t recall which ones.

More recently, Mr. Villanova arranged a meeting on Nov. 30 between Shelbourne and Mark Ayers, a Washington, D.C.-based union leader who’s a board member with ULLICO and the AFL-CIO Housing Investment Trust. Mr. Ayers didn’t return calls….

Check out the full Crain’s Chicago Business article by clicking HERE!

Photo courtesy of Crain’s Chicago Business

Story of the 2009 Market. Lincoln Park 2520 Scaled Down by a Third.

Proposed Lincoln Park condo project scaled down

By Thomas A. Corfman, July 22, 2009

(Crain’s) — Developers of a proposed luxury condominium complex overlooking Lincoln Park are slashing the number of units by nearly a third in a bid to break through the locked-up market for large construction loans.

Ricker-Murphy Development LLC told buyers last week that the number of units would be cut by a nearly a third, to 198 from the 292 previously proposed, in Lincoln Park 2520, a three-building complex proposed for the site of the demolished Columbus Hospital, 2520 N. Lakeview Ave.

As a result, developers plan to lop off eight stories from the tallest building, reducing the height to 33 stories from the 41 stories previously proposed.

“Our opportunity to reduce the scale we believe will actually make us more attractive for not only construction financing, but also more attractive for the buyers” who want a smaller project, says John Murphy, a co-principal in Ricker-Murphy, whose joint-venture partner is the General Electric Co. pension fund.

Although the building will be shorter, the changes would not affect the design by Chicago architect Lucien Lagrange.

But even at a reduced size, the project would likely require a construction loan of more than $200 million to complete. As a result, the venture plans to start work without a loan on the foundation, which alone could take 12 months to finish. A smaller building still could be completed by late 2011, as required by the current contracts with homebuyers.

The shift in strategy comes as Ricker-Murphy faces an Aug. 15 maturity date on a $28.75-million loan on the site held by Bank of America, property records show. Mr. Murphy says talks are already under way for an extension of the loan.

B of A executives could not immediately be reached for comment, a spokeswoman says.

Ricker-Murphy and the GE pension fund are taking an aggressive approach to challenges facing many residential developers, who have instead opted to put their projects on hold.

“The cheapest thing to do is to sit and wait it out,” says developer Harry Huzenis, a principal in Chicago-based Jameson Development LLC. “The type of buyer they have will be there when the market is better.”

With asking prices of $885 a square foot, the project has not been immune from the broad downturn in the condo market, despite its premium location. Sales have stalled at about 50% of the units, a level that was once more than enough to obtain a construction loan. But lenders have become fearful of new condo projects because of deep concerns about weak demand and the glut of units already being built.

By reducing the number of units, the percentage of condos under contract would increase to 74%, from about 50%, assuming the number of buyers does not change, Mr. Murphy says. Reducing the number of units eliminates 29 condos that are already under contract, giving those buyers the chance to walk away and possibly washing out any advantage to the developers….

Check out the full ChicagoRealEstateDaily.com article by clicking HERE!

Old Lincoln Park 2520 Rendering.

Old West Loop proposed mixed use development makes me miss the Boom years.

http://www.prweb.com/releases/2007/08/prweb545355.htm

IBT Group Announces Partnership with Blackrock to Build Project in Chicago’s West Loop

August 7, 2007

IBT Group LLC, a real estate and asset management firm and advisory client of BlackRock Inc., one of the world’s largest investment management firms, have announced a partnership that will provide capital for a new mixed-use development in Chicago’s West Loop.

“Our partnership with BlackRock represents a significant step forward in our growth,” said IBT Group President Gary Pachucki, who founded the company in 1999. “It not only secures capital for West Loop Promenade, but also provides access to Wall Street, and the capital that will allow us to pursue larger, more complex transactions.”

“We are pleased to become a capital partner to IBT Group and its West Loop Promenade development, which has already secured a lease with Robert Redford’s Sundance Cinemas,” said Erik Grabowski, BlackRock Vice President. “We view the West Loop as one of the fastest-growing areas of Chicago and are excited about the opportunity to bring a high quality retail/entertainment project to the neighborhood.”

West Loop Promenade is a $240 million retail and residential project being developed by IBT Group on Chicago’s Near West Side. Scheduled for a spring 2009 opening, it will include 285,000 square feet of retail space on three levels, including the eight-screen Sundance Cinemas theaters.

Even more issues in American homes because of drywall from China.

CPSC Ties Drywall, Corrosion

By MELANIE TROTTMAN and M.P. MCQUEEN

WASHINGTON — Federal regulators said Monday there is a “strong association” between chemicals emitted by Chinese drywall and metals corrosion, a finding that could pave the way for the government to help homeowners facing billions of dollars in repair bills. But who will pay for the damages remains unclear.

The Consumer Product Safety Commission said an investigation by the CPSC and other federal agencies has shown levels of hydrogen sulfide to be higher in some houses built with Chinese drywall than in those without it. The findings include results from an indoor-air study of 51 homes and two other preliminary studies on home corrosion.

“We are now ready to get to work fixing this problem,” said CPSC chief Inez Tenenbaum.

Nearly 2,100 homeowners in 32 states and Washington, D.C., have claimed their homes were damaged by chemicals emitting from Chinese drywall. Many of the affected homes were built in 2006 and after in areas of the Southeastern U.S., and most of the complaints have come from Florida and Louisiana. Some builders used the Chinese product because of a domestic shortage during the housing boom.

Homeowners have also complained of health problems such as bloody noses, headaches and asthma attacks. Regulators said more studies are needed to determine if there is a link between the drywall and health or safety issues, such as fire hazards possibly from damaged electrical wiring.

Another finding from the studies: While hydrogen sulfide gas was the “essential component” that caused copper and silver corrosion in homes where the owners complained of problems, “other factors” including air circulation, formaldehyde and other air contaminants also contributed.

The CPSC said an interagency drywall task force is working with congressional and White House officials to determine how to identify and fix affected homes and fund repairs. But it remains unclear what the remedies will be and where the money will come from. Consulting firm Towers Perrin estimates drywall damages of $15 billion to $25 billion, including litigation costs….

To read the full Wall Street Journal article click HERE!