CHICAGO — The Mills Corp. may have bungled some of its former development projects, but Block 37 has the potential to become a premiere retail destination on State Street and launch a major revitalization of downtown Chicago retail as a whole.
Formerly known as Block 37, 108 North State Street was an eyesore in Chicago's Loop. It sat undeveloped for decades and passed through the hands of multiple developers before landing with Mills in 2002. The company had planned a major office, residential, retail and entertainment center, including a bowling alley and restaurants, but as the company crumbled due to mismanagement, it sold the development rights to the site piecemeal.
The site is a sensitive subject for Chicagoans, to say the least. But Joseph Freed & Associates, a local developer that acquired the retail development rights to the site from Mills last year, hopes to turn the tide. The company controls the roughly 265,000 square feet of retail on Block 37. Golub Co., another local developer, acquired the office and residential development rights. They expect the project to open in the fall of 2008.
Having this historic site in the hands of Chicago companies has eased the minds of retailers and residents, especially given Block 37's location as the northern hub of the Loop. The massive project encompasses an entire city block, bordered by the trendy, restaurant-packed River North neighborhood and the booming theater district. It sits across the street from the historic Marshall Fields-now-Macy's flagship, which still suffers soft sales since its conversion to the Macy's banner in fall 2006. Many retail real estate executives are optimistic that redevelopment of the site will spark a renewal on State Street, which they say is short on retail and ripe for redevelopment.
"Mills had too many other issues with the company to really focus on the development," said Sharon Kahan, a Chicago retail specialist with brokerage CB Richard Ellis. "Freed is homegrown and understands Chicago and what we need."
Still, some skepticism surrounds the project. Ross Glickman, chief executive officer of Urban Retail Properties, who was a previous owner of the Block 37 site with JMB Realty, questions how the development will be executed.
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