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June 14, 2017

Chicago-Pilsen-redevelopment.jpg
Photo by JGMAA rendering of plans for 1901 and 1911 S. Sangamon St.

A Chicago developer plans to convert two vacant loft warehouses in Pilsen into office space after another builder dropped a proposal to convert one of the buildings into apartments.

Condor Partners bought the vintage buildings at 1901 and 1911 S. Sangamon St. last year for what would be one of the biggest office developments in the Southwest Side neighborhood in many years, totaling 200,000 square feet and costing as much as $35 million.

“We’re going to give this project a chance to kind of be what it wants to be, and have tenants that are passionate about being in Pilsen,” said Condor Principal Michael McLean.

Dubbed Mural Park, the redevelopment will include retail, office and light manufacturing space and boast a restaurant, cafe, rooftop deck and bicycle storage, according to a statement from Transwestern, the brokerage hired to lease the buildings. Condor has already received interest from breweries and aims to attract tenants including high-tech companies, nonprofits and light-industrial users, McLean said.

“We want to be a real organic mix of different uses,” he said.

COMPLICATED HISTORY

Condor is investing in a neighborhood that has had a complicated—some might say contentious—relationship with developers over the years amid an ongoing debate over gentrification. Neighborhood groups have raised concerns about proposed residential projects in Pilsen, arguing they’ll push up rents and displace working-class residents.

A rendering of the redevelopment of 1901 and 1911 S. Sangamon St. in Pilsen. - JGMA
Photo by JGMAA rendering of the redevelopment of 1901 and 1911 S. Sangamon St. in Pilsen.

Against that backdrop, Chicago developer David Baum proposed converting the building at 1901 S. Sangamon into 111 apartments in 2015. But he never went forward with his plan, which would have required a zoning change from the city, no sure thing given the neighborhood’s dynamics.

Residents had expressed concerns about the size of the development and parking, said Byron Sigcho, executive director of the Pilsen Alliance, a neighborhood group. The apartment proposal didn’t “make sense,” he said.

Baum said he decided to sell the buildings instead, after being approached by Condor. A venture led by Baum sold the property to a Condor entity for $5 million last September, according to Cook County property records. Condor is financing the redevelopment with an $11 million mortgage from Los Angeles-based Calmwater Capital, county records show.

‘INVESTING IN PILSEN TODAY’

“We are investing in Pilsen because we believe in what it is today, and we do not want that necessarily to change,” McLean said, adding the company hopes it can “take a $50,000-a-year real estate bill and turn it into a half-a-million-dollar real estate bill without displacing and disrupting a very valuable culture.”

Founded by former Centrum Partners executives in 2014, Condor is developing a hotel on Wells Street in Old Town and acquired a loft office building in the Clybourn Corridor last year.

At the Pilsen property, the firm aims to build a community plaza in conjunction with the neighborhood’s National Museum of Mexican Art that will be accessible along the Paseo, a four-mile rails-to-trails project that will connect Pilsen and Little Village.

McLean also envisions a farmer’s market and movie nights at the site in the future. He said Condor is spending between $100 and $150 per square foot to rehab the buildings, which have been vacant for decades.

A former lumber warehousing and distribution hub, the Sangamon buildings are just south of Pilsen’s 18th Street business district and two blocks west of South Halsted Street.

Pilsen has potential as an office market, but it’s still early, said Matt Garrison, managing principal at Chicago developer R2. In 2015, the firm agreed to buy a 300,000-square-foot warehouse at 465 W. Cermak Road with plans to convert it into office space. But it never closed on the deal.

“The reason we didn’t move forward with the Class A loft development in Pilsen was because we did not think the demand existed,” Garrison said.

But he said it will eventually.

“It’s going to happen,” Garrison said. “It’s just a question of when.”

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