Developer scraps Streeterville condo project, sells site

214060 Resource 199230 199384 199384 1223498597914 1223498687603 Controlled Streeterville Condo Project Scraped

Changing Market

(Crain’s) — Developer <a href="http://www.chicagobusiness.com/cgi-bin/relatedStories.pl?type=company&id=1169">Centrum Properties Inc.</a> has killed a proposed 41-story condominium building in Streeterville, selling the site to <place /><placename />North</placename /> <placetype />Shore</placetype /></place /> developer David Hovey, who plans to eventually build an apartment tower there. And in a dance of developers, another site three blocks east is being put on the market by Draper & Kramer Inc. after talks fell apart to sell that site to Equity Residential, an apartment real estate investment trust.Mr. Hovey paid nearly $20 million late last week for a site at St. Clair and <state /><place />Illinois</place /></state /> streets, sources say, where Centrum had proposed the second stage of the <place /><placename />Cityfront</placename /> <placetype />Plaza</placetype /></place /> project. The three-tower <place /><placename />Cityfront</placename /> <placetype />Plaza</placetype /></place /> site stretches from St. Clair to Fairbanks Court along the north side of Illinois Street. Sales for the second phase, called the St. Clair, had stalled after more than 15 months of marketing, with contracts for just 40% of the 261 units in the proposed building. The first phase of <place /><placename />Cityfront</placename /> <placetype />Plaza</placetype /></place />, a 281-unit building at the corner of <city /><place />Fairbanks</place /></city /> and <state /><place />Illinois</place /></state />, was completed last fall and is about 90% sold. The St. Clair project joins a growing list of downtown condo projects that developers have dropped this year before construction started. Projects totaling more than 1,400 units were canceled during the first half of 2008, according to a second-quarter report by <city /><place />Chicago</place /></city /> residential consulting firm Appraisal Research Counselors.An executive with Centrum did not return calls requesting comment. Executives with <city /><place />Chicago</place /></city /> real estate firm Jameson Real Estate LLC, which brokered the deal, referred questions to Mr. Hovey.The Streeterville project would be the first downtown tower for Mr. Hovey, a modernist architect and experienced high-rise developer in the northern suburbs.Mr. Hovey, president of Glencoe-based Optima Inc., confirmed that the deal had closed but declined to disclose the exact price. But he called the price “very attractive” given the site’s location one block east of North Michigan Avenue. Amid the current credit crisis, a venture led by Mr. Hovey paid mostly cash for the property, sources say. The Centrum-led venture also provided so-called “seller financing,” a loan to cover some of the purchase price. Mr. Hovey said he is considering an apartment tower. But lenders have also pulled back on construction financing for apartments. With about 2,500 new units to be delivered to the downtown market by the end of next year, many observers do not expect another building to start until 2010.“We’re in no hurry,” Mr. Hovey says.The deal marks a shift in the negotiations between Mr. Hovey and Centrum executives, who in June had a tentative deal to sell Mr. Hovey the site of <place /><placename />Cityfront</placename /> <placetype />Center</placetype /></place />’s third phase. That site, which is zoned for a 50-plus story hotel/residential building, is between the existing building and the St. Clair site. But that site came with a much higher price tag of between $45 million and $50 million. 9 application/xml false centrum properties chicago condo crunch cityfront plaza david hovey streeterville condo Developer scraps Streeterville condo project, sells site http://www.chicagobusiness.com/cgi-bin/news.pl?id=31317&psid=1e2b9f9d1237c852d70af1810463d1a8 Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; Mozilla/4.0 (compatible; MSIE 6.0; Windows NT 5.1; SV1) ; Embedded Web Browser from: http://bsalsa.com/; .NET CLR 2.0.50727; .NET CLR 1.1.4322) 127.0.0.1 127.0.0.1 wdiehl 72.244.156.49 false true false false true 199303 false false true false false false true 199230 blog blogsite/RepoHomeTourChicago/web