After 20 years, Block 37's development is still haunting Mayor Richard M. Daley.
Another financial deal involving the downtown location went up in smoke this morning after Loews Hotels Inc. announced that it was pulling out of a $175 million hotel construction project on the corner between Randolph and Dearborn, despite buying the air rights for its construction plans for just $1.
The luxury hotel company, which owns properties in 17 different North American cities, had initially agreed to build a four-star, 384-room hotel that would have completed the mayor’s 20-year long dream of having a multiuse block with retail space, condominiums and a hotel, all packed together in one of the city’s most visible blocks.
Loews’ withdrawal causes further delays to other projects that have been struggling to find financial backing, such as the construction of a Chicago Transit Authority subway station underneath the property. The station’s construction has been stalled for several months after it was clear that the initial cost estimates at $213.3 million were way below the actual project’s costs. According to Crain's Chicago Business, the CTA wants the station to link the Red and Blue lines into a superstation that will also have express trains come and go from both O’Hare and Midway airports.
But looking for a new hotel company to fill in the gap left by Loews is not the only task Block 37 developer Joseph Freed & Associates LLC will have to deal with.
After the office space opening earlier this year, the retail and commercial area’s opening has been postponed to November, when different stores such as Puma athletic apparel and women’s clothing store Anthropologie will open to the public. Still, a third of the retail space remains vacant after Apple Computer Inc., yoga-wear retailer Lululemon Athletica Inc. and David Barton Gym of New York all cancelled their leases last year, reported Crain's Chicago Business.
Are these all bad signs for the upcoming Olympics Committee vote in Copenhagen to decide whether Chicago is up to the task of hosting the 2016 Olympic Games? Probably not, but the mayor needs to act quickly if he wants his Block 37 dreams to come true.