“King of the West Loop” raises bet on upzoning trend stretching

Is Phil Denny king of the West Loop or its jester?

After closing his latest acquisition to complete an assemblage between the 1700 and 1800 blocks of West Lake Street, the sole owner of Peppercorn Capital, one of the West Loop’s largest land owners, said he wants to be known as a “wealthy clown.”

He recently played the part, showing up to a closing party for a $32 million sale dressed in a costume made from cardboard boxes, meant to resemble the three-story brick building at 240 North Ashland Avenue bought from his firm by manufacturing incubator mHub.

After that sale, Peppercorn made a new purchase, and now owns the entire 1800 block of West Lake Street, in addition to most of the 1700 block across the street. The assemblage was completed May 10, and costs totaled $7.5 million for the parcels, Denny said.

Denny, who’s been bullish on the Near West Side for more than 15 years, says his vision for the property, which he plans to sell to a developer, hinges on the city one day approving zoning for a residential high-rise in the district, currently an industrial area. With a new Green Line ‘L’ stop on Damen Avenue set for completion next year and the thriving Illinois Medical District nearby, he’s confident his prediction of more housing density getting allowed in the area will pay off.

“It’s more about my conviction level that that’s a foregone conclusion. It may not happen for five years, but if it does, I will have the property necessary to assemble for development,” Denny said. “Infill is happening from all three sides in this area, from the west of United Center, east from Fulton Market, and south from the medical district. That’s why I think a zoning change is inevitable.”

The funds for Denny’s next move come from the proceeds of his sale of 240 North Ashland to nonprofit manufacturing incubator mHub. Denny bought the property in 2013 for $13 million.

Despite his investing savvy, he said in an email to The Real Deal that such antics involving outfits made of cardboard boxes depicting buildings might not fly at other major Chicago real estate firms — and he’s just fine with that.

“The downside to these types of shenanigans,” Denny asserts, “is that I will likely never be hired at Sterling Bay or Shapack Partners.”