The Chicago Plan Commission on Thursday approved a developer’s proposal to transform a 57-year-old office tower on the Magnificent Mile into a residential building.
Commonwealth Development Partners wants to gut the interior of 500 N. Michigan Ave., a 24-story building designed by noted architectural firm Skidmore, Owings & Merrill, and replace its office space with up to 324 apartments, including 64 affordable units.
“There are a lot of people who are moving to Chicago every day, and we think that’s going to continue,” company co-founder Matthew Faris told the Plan Commission. “Chicago has been one of the top five performing residential markets in the country.”
The plan still needs a green light from City Council. It’s the latest attempt to revive downtown buildings by replacing obsolete or vacant offices with residences, and the project would also bring more activity to the Magnificent Mile shopping district, which lost many retailers in the wake of the pandemic.
“I think it’s an excellent redevelopment play, because as an office building, it was languishing for so long,” said Dougal Jeppe, executive vice president of Colliers, who represents office tenants in 500 N. Michigan Ave. “It was kind of a zombie building, with no leasing velocity.”
Most of the office space in the 324,000-square-foot building is vacant, he added. Many companies now prefer renting more modern offices in the West Loop or Fulton Market, where employees also have quicker access to commuter trains.
The overall office vacancy rate for North Michigan Avenue just hit 22.4%, up from 18.3% a year ago, according to a Colliers report.
But apartment dwellers are attracted to the Magnificent Mile, Jeppe said. The street is still beautiful, even though some storefronts are vacant, and residents will be in walking distance to the Loop, Lake Michigan, and all of River North’s restaurants and amenities.
“Residences will be a much better use of (500 North Michigan Avenue),” he said.
Plan Commission members said they would like to see other similar projects get underway, especially in the Loop, where many older properties also struggle to retain office tenants. Mayor Brandon Johnson has been promoting an initiative, launched by his predecessor Lori Lightfoot, to transform a set of aging LaSalle Street office towers into residential buildings with about 1,000 total apartments, including hundreds of affordable units.
“I think this is a big deal, and a great complement to the other projects we’re supporting along LaSalle Street,” said Ciere Boatright, commissioner of the Chicago Department of Planning and Development.
Transforming offices into apartments is very expensive, Faris said, and isn’t feasible for many buildings. But 500 N. Michigan Ave. is slender, with floorplates of about 14,000 square feet, and has huge windows on all sides, so each residence will enjoy natural light, one of the most important factors when renting apartments.
“It’s a rectangular footprint with really good window lines, not all buildings work that way,” Faris said.
The big windows are a concern for environmentalists, who say migratory birds often can’t tell the difference between glass and sky, leading to collisions and deaths. That’s especially true for residential buildings, which are more likely than office buildings to be lit up at night, when many bird strikes occur. They asked Faris to consider adding bird-friendly design, such as fritted windows, which birds can more easily see.
“Our city is the most dangerous in the U.S. for migratory birds,” said activist Andy Burnham. “Help us be the best city in the U.S. for birds instead of the worst.”
Plan Commission member Ald. Daniel La Spata, 1st, supported Faris’ plan, but said he was also concerned about potential harm to migratory birds, and asked whether the renovation could include more bird-friendly design.
“We are willing to consider that,” Faris said. “We need to do more research.”
The Plan Commission also approved Thursday the construction of a two-tower apartment complex in Fulton Market. Developers JDL Development and Fulton St. Cos. plan to create a total of 1,079 units, with 20% of the units reserved as affordable, at 1200 W. Fulton St. and 310 N. Racine Ave.
Although many developers are struggling with high borrowing costs and have put off groundbreakings until interest rates sink lower, Faris said Commonwealth Development Partners already has enough capital to get the transformation of 500 N. Michigan Ave. underway.
“We’d like to start construction early next year,” he said.
