Plans to build a 44-story mixed-use hotel/office tower appear to be in a state of limbo until the developer can land a major tenant. The proposed building at 590 W. Madison first broke cover in in late 2014 and hopes to add 330 hotel rooms, a rooftop restaurant, and 616,000 square feet of office space to the western edge of the Central Business District between the Chicago River and Kennedy Expressway. Proposed by Florida
-based Third Millennium Properties and designed by Chicago
's Goettsch Partners, the 582-foot tower would become Chicago's tallest building west of Clinton Street if built. While the project has a hotel partner on board, the building was not going to move forward without a major office space commitment, according to a conversation Joseph Mizrachi of Third Millennium Properties had with Crain's earlier this month.
Because the location was originally approved as a twin of ABN AMRO Plaza at 540 W. Madison (also owned by Third Millennium), zoning and other entitlements for 590 W. Madison were already in place. When the original plan evolved into Goettsch's taller design, the city allowed the project to proceed without reapplying for approvals -- provided construction started before mid September of 2015. Many development watchers were excited to see fencing go up at the north end of the site along Washington and Jefferson and demolition begin on a portion of the surface parking lot. Excitement turned to confusion when, instead of foundation equipment, mature trees arrived on the site. As it turns out, work had only commenced on a small pocket park included in the site plan. While no work on the actual building had taken place, the park landscaping was deemed sufficient to keep zoning intact past the city's exploding September, 2015 deadline. Without an anchor tenant signed to its office portion, it's unclear how soon a deal can be announced and work on 590 W. Madison can begin in earnest. Worst case scenario: the southeast corner of Washington and Jefferson gets a new green space.
While 2015 saw office vacancies drop to their lowest level since 2008, developers are clearly not prepared to build 600,000 square-foot projects purely on speculation. With new class-A office stock coming on line and companies like CNA downsizing into new smaller spaces, the next few years will see a considerable amount of commercial space open up downtown. The Central Business District is also no longer the only game in town when it comes to office space with West Loop, Fulton Market, Goose Island, and Clybourn Industrial Corridor getting in on the action with either new construction or adaptive reuse. (via Curbed