While locals and tourists alike enjoy Millennium Park's numerous amenities, including interactive fountains and elaborate gardens, developers are carving out residences and retail around the destination at the eastern edge of downtown.
Since the July opening of the 24.5-acre, $475 million park, which also features a performing arts pavilion, theater, restaurant and ice-skating rink, “the sheer number of people in the area has exploded,” says Roark Frankel, vice president of U.S. Equities Realty and project manager for the park. “Overnight it went from solely a business center to a super-sized neighborhood.”
The park replaces a former rail yard, parking lot and desolate grassy area. “Now you see people of all ages, speaking different languages, laughing and pointing,” says Frankel, who has worked across the street for more than 10 years. “Residential developers are picking up on that vibe. They either predicted it, or are now rushing to the area to feed off that energy.”
Condo developers undertaking newin the area are taking profits of 15% to 20%, reports Arthur Burrows, senior vice president of investment services for NAI Hiffman in Oak Brook, Ill.
Buyer demand is evident. The submarket surrounding the park recorded 408 contracts and reservations for new construction condo units in the first half of 2004 vs. 182 for all of 2003, according to Chicago-based Appraisal Research Counselors.
The Heritage at Millennium Park, a nearly sold-out 57-story tower that will overlook the park, pioneered a different kind of product for the area — luxury, high-end units.
Sales are brisk at other developments such as 340 on the Park, a 62-story, 340-unit condo tower at the northeast edge; The Regatta, a 44-story building a few blocks further north; and The Columbian, a 46-story, 220-unit high-rise south of the park. Three-bedroom new construction units range from $700,000 to $1.6 million.
Gail Lissner, vice president of Appraisal Research Counselors, says the residential buzz “is making every owner of an under-performing office building rethink their highest and best use.”
Louis D'Angelo, president of Metropolitan Properties of Chicago LLC, is one developer seizing the opportunity. He's converting the 80-year-old Britannica Centre office tower at 310 S. Michigan Ave. into the 220-unit Metropolitan Tower.
New, hip retail also is emerging. Caribou Coffee and Jamba Juice replaced some of Michigan Avenue's dingy first-floor vacancies. Segway's new store in the Santa Fe Building, 224 S. Michigan Ave., will sell personal transportation movers as well as use them for architectural tours.
Just north of the park, a three-block stretch of Michigan Avenue also is benefiting from the fanfare. This fall, China Grill will debut in The Hard Rock Hotel Chicago, a 381-room hotel that opened in December 2003, and a new Morton's Steakhouse will provide fine dining next door.
Although the scope of the project grew considerably beyond initial plans, many Chicagoans and business leaders now praise the boldness of the public-private partnership. Mayor Richard Daley spearheaded the project, and John Bryan, retired chairman of Sara Lee Corp., was key in organizing the private contributions totaling $205 million.
Besides the economic boost from up to 3 million tourist visits annually, says Millennium Park Inc.'s project design director Edward Ulir, the city benefits from real estate tax revenue generated by the new development.