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Owner Razes Chicago Avenue Building, Leaving Vacant Lot For Now

Crews demolished a one-story brick office building at 1515 Chicago Ave. this week. A spokesperson for the owners said they would like to build an extended stay hotel, but the city prefers office space.

After crews demolished an office building at 1515 Chicago Ave. this week, the site could become a vacant lot if the owners can’t find a new development that meets city approval.

Robert Barr, CEO of the real estate firm that manages the property, said that his company razed the building because it didn’t make sense to renovate, and because property taxes are less expensive on a vacant lot. He also said that a developer is interested in constructing an extended stay hotel on the site—but city officials have said they’d prefer to see commercial office space. 

“We have a ready, willing and able tenant,” he said. “If we can’t get the extended stay contract done on the site, we’re just going to let it sit vacant.” 

The property at 1515 Chicago Ave. is located in the city’s “downtown transition” zoning district, according to Steve Griffin, director of community and economic development for the city. Permitted uses include both hotels and office space as well as residences, financial institutions and certain types of restaurants, according to city code. However, any development greater than 30,000 square feet in size would require city council approval, Griffin said. 

Barr said that his firm had met several times with city officials and Ald. Judy Fiske, who oversees the first ward where the property is located. At first, city staff said they might consider an extended stay concept, and he went back to work on that plan, according to Barr. 

“Then all of a sudden, their direction changed and they said, ‘No we want office,’ and that includes Alderman Fiske,” Barr said. 

Fiske did not return a call for comment on Tuesday. Griffin confirmed that the city preferred an office project, but said that he had told Barr that economic development staff would also consider an application for an extended stay hotel.

“That’s our second choice,” Griffin said. “It’s revenue-producing, it involves some jobs.

He said that the city’s No. 1 choice for the site was office space, because it would preserve a balanced mix of uses downtown and create jobs, a high priority for the economic development office. 

“It’s not just about this site, it’s about the whole downtown,” he said. 

But Barr said that his firm did not believe it could find a tenant willing to pay the kind of rents needed to make office space financially viable, given the city’s property taxes. He noted that the building’s most recent tenant, the property management firm Heil & Heil, had moved to Skokie to save money. 

“They relocated from Evanston because they could get a cheaper, more attractive, less expensive rate,” Barr said. 

In March 2011, students from Northwestern University’s Kellogg School of Management studied several vacant lots and “underdeveloped” properties downtown and their potential for office space. They concluded that the city had trouble attracting large anchor tenants for office space, in part due to high rents that rivaled those in Chicago’s West Loop. 

“Prospective companies that are considering relocating to either of these areas would clearly be targeting an urban location, and Evanston and its various market drivers and amenities will come into direct competition with what Chicago can offer,” the students wrote. For some potential tenants, that would put Evanston at a competitive disadvantage.   

Looking specifically at 1515 Chicago Ave., the students concluded that the property had “strong redevelopment potential,” and was big enough to support a large-scale office building. However, they also said the property would face “the same anchor tenant hurdle that has proven highly difficult to overcome in Evanston.” 

Meanwhile, Barr said that the developer of the extended-stay hotel did not want to go forward with the time and expense of preparing an application without clear approval from the city and city council.

“A developer is not going to advance a plan if there’s a low probability of success,” Barr said. “If there’s a majority of people who feel that’s not what they want, then why waste your time and money to do it.” 

Barr said he planned to lease parking for local retail establishments on the site if the extended stay hotel deal did not go through. According to Griffin, constructing a parking lot is not one of the permitted uses, and would require the zoning board of appeals and city council to approve a text amendment.

lucas January 09, 2013 at 06:30 PM
Thanks Jennifer Why they issue that. If no plans to replace building
Lyn Warner January 09, 2013 at 06:57 PM
Office Space?! I don't think the City of Evanston is paying attention to what is happening here. People/companies are fleeing Evanston as soon as they can to get away from all the taxes and government nonsense that is here. We don't need more condos, restaurants or office space...we need real, interesting places. An extended stay hotel sounds interesting....office space does not.
Jennifer Fisher January 09, 2013 at 07:38 PM
@Lucas, as I understand, the property owners have a right to demolish the building, even if they don't have a plan for something new.
Larry January 10, 2013 at 03:18 PM
I had the same thought as Jim above when I saw this. AS far as I know, the owners of property in a free country with private property rights can decide on what to build and what kind of business makes sense. The City of Evanston has no right to do this. If the regulators want an office, they shouldraise their own money in the private marketr, buy the lot and build an office building. meantime, as Lyn notes, lower taxes and less government nonsense might help.
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