Construction of a 46-story apartment tower is expected to begin near Millennium Park early next year, once the developer clears an unusual final hurdle: terminating subway rights for a train line the city designed, but never built, a half century ago.
An affiliate of Chicago-based CA Ventures plans to begin building the 639-unit apartment tower at 222 N. Stetson Ave. in the first quarter of 2020, according to John Diedrich, CA Ventures’ global head of investments. The project also will include 18,250 square feet of retail space and lower-level Pedway access.
The 44,000-square-foot site is nestled alongside the Aon Center and the multibuilding Illinois Center, Prudential Plaza and Lakeshore East complexes. The vacant parcel is below street level on the northwest corner of Stetson and Lake Street.
A decade ago, a 74-story skyscraper with a Mandarin Oriental hotel and luxury condos was planned for the site, before a real estate crash led the previous developers into default on their loan.
The lender on that project, New York-based iStar Financial, took back the property in 2016 after a foreclosure judgment was issued. Since then, iStar has sought a new developer for the property.
It found one across the street from the site in Prudential Plaza, where CA Ventures — which owns a $13 billion portfolio that includes apartments, senior and student housing, offices and warehouses throughout the world — is headquartered.
CA Ventures has financing in hand, including a construction loan from iStar, Diedrich said in an email.
One last remaining hurdle, which Diedrich said is close to being resolved, is an unusual remnant of a five-decade-old plan to overhaul Chicago’s public transit system. CA Ventures must gain approval from the city for a “release of subway rights” to the site.
The Monroe Street Distributor Subway route was envisioned in the late 1960s as part of a new system of train lines that would have replaced what remains today as the elevated Loop tracks.
Had it become reality, the train line would have run from what was then called the University of Illinois at Chicago Circle campus at Morgan and Harrison streets, extend north on Morgan to Monroe, and then follow Monroe to the lakefront downtown, according to a city of Chicago report on the plan. Near the lakefront, the subway would have split into north and south branches, with the north line running through the 210 N. Stetson site under the Illinois Center. The north route would have terminated in a loop in the Gold Coast.
The plan never came to fruition because of financing issues and other delays, and it was formally abandoned by the city in 1979. Even so, a quirk of Chicago zoning rules requires CA Ventures to obtain a “release of subway rights” to the site.
Ald. Brendan Reilly, 42nd, on Nov. 20 introduced an ordinance to the City Council’s Committee on Transportation and Public Way to allow the developer to build within the subway route’s right of way.
The Chicago Department of Transportation does not object to the release of subway rights to CA Ventures, which would pay “an amount equal to the appraised fair market value of such rights” to the city, according to Reilly’s ordinance.
“This is a rare case based on CDOT’s experience,” CDOT spokesman Michael Claffey said in an email. He said the fee will be determined by an appraiser and must be paid before the release of subway rights is recorded.
The easement sought is for the easternmost 4 feet of the property at the lowest level of Stetson, Claffey said.
The site is already zoned for a tall tower within a larger planned development for the area.
Minor zoning changes to CA Ventures’ plan were approved in August, according to a letter sent from a city administrator to iStar’s local zoning lawyer, Jack George. From that date, the developer has a year to begin construction before the changes lapse.
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