Chicago Sun-Times: December 07, 2005

Condo tower back on track on S. Michigan

By David Roeder

The parking lot that is the 1000 S. Michigan site is one of the largest gaps in the streetwall that serves as a backdrop for Grant Park. But development plans are on track for the site now that it has new owners.

Oak Brook-based Renaissant Development Group LLC, where veteran builder Warren Barr is president, has purchased the site from a group headed by Guy Gardner, who secured city approval to build there but never could line up financing. Barr will pursue Gardner's objective of a 40-story, 350-unit condo tower designed by Chicago's DeStefano and Partners Ltd.

Barr declined to comment on terms but a source said the entire development site, which includes parcels on Wabash that could be built on later, went for $43.8 million. Its value was enhanced because Gardner, even as he was struggling to pay lenders, managed to get his plans through a long and expensive zoning process.

A sales office will open on the site by late January and construction could begin in October, Barr said, adding that he's evaluating "two or three'' proposals for construction loans. He said he hopes to make a positive impact on the southern end of the Historic Michigan Boulevard District.

The project could generate sales leads for another deal Barr contemplates in the same neighborhood at 830 S. Michigan. Barr has shown community groups plans for a 70-story condo tower that would be built behind an eight-story former YMCA at that location. He said the scope of that project is still under discussion with the city.

The former Y would be preserved because it's viewed as integral to the landmark streetwall.

For the new construction at 1000 S. Michigan, Barr said the DeStefano design makes ample use of terra cotta to make it fit with adjacent structures that date from the early 20th century.

Under Gardner's ownership, the project's sales team reported that buyers reserved 240 units with nonrefundable deposits. Barr said he's going through those deals to see which are solid and has confirmed 150 so far. The discrepancy reflects the project's drawn-out nature and not any dishonesty by the seller, Barr said. "They've been very open with us throughout this process. Their word has never been a problem,'' he said.

Gardner, who could not be reached for comment, has been involved in several small-scale projects but was new to the high-rise game. He's part of the family that used to own Chicago's Soft Sheen hair care firm.

Despite having financial headaches over 1000 S. Michigan, Gardner apparently gets a hefty profit from the sale. Property records indicate his partnership acquired some of the parcels included in the development for just $4.8 million in 1998.

Barr also gets zoning authority for two 32-story buildings on Wabash. They would contain about 323 units and would be built if demand warrants.

The law firm DLA Piper Rudnick Gray Cary advised Barr. The sale short-circuits a strategy of selling the property through sealed bids.