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August 29, 2019

Crazy 8’s

By Jonathan Zimmerman

As we approach the Labor Day weekend and unofficial end of summer, here are 8 random thoughts that recently have crossed my mind as we conclude month number 8 of 2019:

1) A big thumbs down to the City of Chicago and State of Illinois regarding their handling so far of the proposed Chicago casino.  Did they really expect a casino operator to be willing to accept such an overbearing and obnoxious tax and fee structure?  Wake up!  This would be a positive development for the city.  Please do not drive away yet another potential draw which would generate revenue and expand tourism.  Meanwhile, the budget deficit continues to get bigger and bigger with no end in sight.

2) While it might be a moot point now, if generating tax revenue is truly the ultimate goal of a Chicago casino, I do not see how it can be located anywhere but downtown.  I am all for trying to boost struggling neighborhoods and love the concept of a casino being a catalyst for future growth and development, but in reality, people are not going to stray too far from the city center for this sort of attraction. Given all the issues with the Thompson Center, this seems like a no brainer site on the surface.  However, can a casino really be located right across from City Hall?  That is questionable.  Maybe if the casino access was from Lake Street and the entertainment and hotel component faced Randolph, it could be feasible. Perhaps a better idea is to exercise eminent domain and buy up one of the remaining dilapidated blocks in the Loop –   Clark between Van Buren and Ida B. Wells Drive comes to mind – and develop a complex over there.

3) Speaking of taxes, any Landlord reps out there who have lost a deal recently due to concerns about the upcoming property tax reassessment?  I sure have.  It seems like not a day goes by without someone expressing concern, and rightfully so. At some point, Springfield needs to step in and realize that it will become counterproductive for businesses and people, in general, to remain in Chicago if the tax rates continue going up, up and up. We need some certainty and common sense applied to the situation.

4) Some of the recent leases signed in the Central Loop with larger-sized tech firms (Kin Insurance, Showpad, Snapsheet, ActiveCampaign, SpotHero and ReviewTrackers, to name a few) are very exciting and a telling sign that the office leasing market is still buzzing along at a healthy pace.  If these types of users continue to embrace the Loop, things should be in fine shape for a long time to come, recession or not. This is good since there is going to be quite a bit of space to fill in upcoming years as tenants such as Bank of America and BMO Harris scamper off to new towers in the West Loop.

5) I am fascinated to see how one of those so-called holes is going to be filled at 135 South LaSalle.  It is such a wonderful building, so rich in history and an architectural genius.  However, I have a hard time seeing another anchor tenant coming in and taking over the gigantic space being vacated by Bank of America.  This reminds me of a lot of what happened at 11 South LaSalle in the late 1990s when LaSalle Partners relocated to the former Amoco Building.  This ultimately led to the building being transformed into a Residence Inn. Could 135 South LaSalle be next in line for a partial hotel or residential conversion?  It would make sense.

6) A standing ovation to all parties involved in bringing the Old Post Office back to life starting at the very top with the ownership of 601W Companies, leasing expertise by Telos Group, property management by JLL, architectural services by Gensler and Bear Construction as lead contractor. What a truly amazing job of filling this building up so quickly with such a high-level caliber of tenants.  This has to go down as one of the greatest redevelopments in the history of Chicago real estate.  Mad respect to all.

7) Here is a good question to bring up the next time you are at a gathering of real estate professionals: has there ever been a more important lease signed in Chicago than Google at 1000 West Fulton Market?  Would Fulton Market exist today in its present form if Google would have decided to stay and expand in River North?  Discuss.

8) Sincere condolences to the families and friends of two Chicago real estate veterans who recently left us too soon, Ann Anovitz and Gerald Frank.  Ann was a true pioneer of the industry who opened up so many doors for numerous people.  Gerald was a long-time broker who epitomized hard work and ethical behavior.  Both were total class acts in every sense, wonderful people and credits to the industry. They will be missed.

I will now end on a positive note with 4 words to get everyone through the fall and winter seasons:  Super Bowl, Super Bears!