A team made up of Chicago-based JMB Realty Inc. and a unit of New York-based Metropolitan Life Insurance Co. tried for more than 10 years to get something developed on Chicago's downtown Block 37, but failed to produce anything.
Frustrated, the city moved last week to take back ownership and, sources say, the development team isn't putting up a fight. The city reached a tentative agreement to buy out the partners in FJV Ventures for about $39 million — the same amount the city had pledged in tax-increment financing (TIF) for a project that looked promising last summer.
That plan called for a $251 million development including a 160,000 sq. ft. Lord & Taylor surrounded by 216,000 sq. ft. of restaurant/retail space, a 14-floor, 357-room Marriott Suites Hotel, 22 floors of luxury condos and a rooftop garden terrace.
However, tightening in the hotel financing market killed the hotel option. And, unlike the environment last summer, lenders now require 40% to 50% pre-leasing for condo developments — a requirement that would take at least a year to fulfill. The city plans to put out requests for proposals, and it may select a new developer by year-end.