From the 3/19/2009 Sun Times:
March 18, 2009
BY DAVID ROEDER
droeder@suntimes.com
The most watched office lease deal in downtown Chicago has been scrapped, perhaps killing plans for a new riverfront skyscraper.
The developer, Hines Interests LP, said Wednesday that investment bank William Blair & Co. LLC has withdrawn from a lease to anchor a planned 50-story tower at the northeast corner of Lake and Canal. Hines said it hopes to salvage the project by reducing the building’s size and extending its timetable for construction.
Hines could not obtain financing for the more than $500 million building even though it had secured tenants for almost two-thirds of its space. Blair had signed for 325,000 square feet but couldn’t afford further delays because its current lease at 222 W. Adams runs out in 2011.
Another early tenant, the law firm Baker & McKenzie LLP, remains committed to leasing 300,000 square feet at the location, Hines said. Baker & McKenzie doesn’t need to move until 2012.
C. Kevin Shannahan, chief executive of Hines’ Midwest region, said he hopes “the extended schedule and high pre-leasing commitments will better position the project to obtain financing.”
The building’s original design was by Pickard Chilton Architects. Hines started a project in partnership with landowner Larry Levy. Earlier plans for a hotel to join the office building also have been scrapped.
The project would have included a new riverwalk and a 1.5-acre public park over adjacent commuter rail tracks.
Blair’s terms with Hines are unknown, but the lease cancellation probably includes a multimillion-dollar penalty. Blair now must find space elsewhere or negotiate an extension with its current landlord, Tishman Speyer Properties LP.
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