Park Ridge-based BJB Partners is downsizing its ambitions for a property next to Millenium Park, opting to put up a three-story commercial building rather than the 41-story tower previously proposed.
The 151 N. Michigan Ave. site on the corner of Michigan Avenue and Randolph Street, was originally set to become a 41-story residential and hotel building, according to Crain’s. In its place, BJB wants to build the three-story building, according to a letter sent to neighboring property owners.
The building has been vacant since 2008, when La Strada Ristorante closed.
BJB, which also owns an apartment building directly north of the site, planned a 184-unit tower with a small footprint — smaller than a tennis court. In 2015 the developers updated plans to add a hotel, but the project never went further.
BJB didn’t respond to a request for comment from Crain’s but has filed a zoning change request with the city.
The move allows the developer to generate income from the three-story building by adding a restaurant or retail, while maintaining the ability to sell or add on later.
The plans come at a precarious time for Michigan Avenue retail and restaurants, which took a beating during the pandemic. Full recovery is unlikely without a return to downtown offices by those currently working from home – less than 40 percent of the workforce, according to Kastle Systems.
A quarter of retail space on the Magnificent Mile is vacant, according to Crain’s. Retailers vacating the Mag Mile include Forever 21, which left 42,000 square feet along North Michigan Avenue before the pandemic. In some cases, landlords are struggling to replace them and building owners have tried to create smaller spaces for retailers. The North Michigan Avenue retail vacancy rate rose to 26 percent in 2021 from 5.3 percent in 2017, according to Cushman & Wakefield.
Millennium Park Plaza, BJB’s property to the north, has ample retail tenants including Protein Bar & Kitchen, Nutella Cafe, Bubblicious Bubble Tea and Orangetheory Fitness. The company purchased the 550-unit building for $101 million in 2004.
BJB’s main holdings are apartment buildings, with assets on the North Side in Gold Coast, Lakeview, Rogers Park, Lincoln Park and Evanston.
[Crain’s] — Miranda Davis