|November 6th, 2004, 01:52 AM||#1|
Join Date: Jul 2004
Likes (Received): 15
New Retail center planned for old Fannie May site
West Loop retail planned for Fannie May site
November 5, 2004
BY DAVID ROEDER Business Reporter Advertisement
Its empty floors still fragrant from chocolate and honey, the former Fannie May candy factory on the Near West Side has new owners who hope to detect in the location the sweet smell of real estate success.
A development team has acquired the property at 1137 W. Jackson and has started marketing it as a multilevel retail building, with movie theaters as a possible addition. The 500,000-square-foot factory, closed last January as part of Fannie May's bankruptcy, would be demolished.
The site also could include a mid-rise condominium building. But the owners' more immediate concern is to secure interest from retailers, including a large-scale anchor such as an office supply chain.
If approved, the site could fill what many analysts regard as a yawning need for retail on the Near West Side. The neighborhood in the last decade has come alive with condos and loft conversions, but few businesses have followed the available dollars.
"We think it's a good time to try this,'' said J. Michael Drew, a principal of Structured Development. Structured owns the site with retail development specialist IBT Group LLC and Marc Realty, an owner and manager of office buildings.
"The West Loop neighborhood has gotten established much faster than the South Loop, which took years,'' Drew said. "We think there's a critical mass in the neighborhood that can support a project like this.''
Gary Pachucki, principal of IBT Group, said the characteristics of the site allow for ambitious goals. Being adjacent to the Eisenhower Expy. and to the 25,000 students at the University of Illinois at Chicago, the stores should tap a market greater than that of nearby residents, Pachucki said.
"We have visibility and accessibility off I-290. It could draw people from as far away as Oak Park,'' he said. Drew and Pachucki emphasized that their plans are in the early stages and could be revised.
The owners closed on the property in August, paying $12.2 million to Fannie May's bankruptcy trustee. The brand itself was sold for $38.9 million to Alpine Confections, now manufacturing such Chicago favorites as Pixies and Mint Meltaways in Ohio and Utah. Property records show the partners obtained a $12.37 million mortgage from National City Bank.
Loans for more than the purchase price are common when a borrower expects substantial redevelopment expenses. Drew said the partnership has "put a substantial amount'' of equity into the deal and is under no financial pressure to quickly sign leases.
The city would have to change the site's industrial zoning to a planned development classification. Pachucki said he hopes to submit the zoning application in a couple of months and start the demolition next year. He said the project could be delivered in early 2007.
The developers said preliminary support came from the area's alderman, Madeline Haithcock of the 2nd Ward. Haithcock could not be reached Thursday.
Eric Sedler, president of the West Loop Community Organization, said it hasn't seen the plans but likes the talk of more retail. "We're excited about any project that would bring serious, first-class retail to the neighborhood,'' he said.
Plans call for the larger stores to have frontage on Van Buren Street, which is closest to the expressway.
Smaller businesses such as florists or coffee shops would be grouped along Jackson.
Retail broker Michael Bell, president of Pentad Realty, said the project should meet the neighborhood needs, but the developers must be careful about the design. He said that if some stores are above the first floor, they'll need a 10- to 12-screen theater to draw people inside the building.
But relying on movie theaters also is risky. If the theaters fail, perhaps because Hollywood issues too many duds, they are hard to lease to another user.
The building would have parking on levels above the stores. The nearly four-acre parcel includes a closed Fannie May retail shop at the southwest corner of Jackson and Aberdeen. Drew said Alpine has voiced interest in having a Fannie May store in the new building.
IBT has been involved in building various types of shopping plazas and has ties to such chains as Old Navy, Home Depot and Jewel-Osco. Drew and business partner Daniel Lukas have completed several projects in the city and, with Marc Realty, redeveloped the former MarchFirst Inc. corporate headquarters at Fulton and Ada.