Motor Row revs up
Developer has big plans for hotels, entertainment near McCormick Place, but biggest project must escape bankruptcy
04/04/2012 10:00 PM
There’s a gap between McCormick Place and the rest of Chicago, and Pam Gleichman knows it.
Out-of-towners are whisked in and out of the convention center by shuttle bus or taxi, few even thinking to take a look at the surrounding areas, the South Loop and Motor Row.
Then again, why would they? There’s next to nothing there for them within a stone’s throw of the convention center, save for a Burger King.
But Gleichman is in a unique situation to change that. With her husband, Karl Norberg, they control the fates of at least six properties on South Michigan Avenue and 23rd Street in Motor Row, and they’re embroiled in a fight to keep another big piece of land on Cermak Road, as well.
If all the projects they’re working on come to pass, they could control a massive portion of one of the biggest new redevelopments to hit Chicago in years, creating restaurants, retail and thousands of hotel rooms for the horde of conventioneers who visit McCormick Place each year.
Sitting in her office on South Michigan last Thursday, Gleichman says that after years of planning and positioning, the time is finally right to make moves on Motor Row. Three things have made that a possibility — the announcement of a new Green Line station going in at Cermak, a new zoning designation that makes the area an official entertainment district and a new agreement between McCormick Place and its unions that makes the building more attractive to conventions.
“A vision can only turn into a reality only when you have certain things in place. Now, we’re ready to go. Everything came together at the right time,” she said. “Those things, you could tell everybody you were hoping they would happen, but people don’t like hoping. They just don’t. They don’t believe the city can get things done. They want reality.”
Now, plans are coming together for her projects. The key to the entire Motor Row development, she said, is making people comfortable enough to walk out the door of McCormick Place’s West Building, at 23rd Street and Indiana Avenue, and keep going. Right now, most out-of-towners run screaming back inside when they see the dilapidated warehouse and showroom directly across the street from the entrance. But these two buildings are a key part of Gleichman’s plan.
The building on the southwest corner, a six-story warehouse, would be turned into a 150-room boutique hotel branded the Cadillac (she says they have GM’s blessing to use the name and logo). With 96,000 square feet of total space, it would be run by Milwaukee-based Marcus hotels. A Marcus official declined to comment, saying they don’t discuss potential projects.
Across the street on the northwest corner of 23rd and Indiana, the former Rambler auto dealership would be transformed into a mixed-use restaurant and entertainment complex, again using the auto company’s name.
The first floor would hold a restaurant-cum-jazz bar, as well as Starbucks and other retail, while the second floor would hold a dinner theater operation called Teatro ZinZanni, according to promotional documents for the project.
These two buildings are the most important in Motor Row, she said, because they can encourage people to leave the convention center.
“The most important thing is when you walk out the door, you have to be compelled to go further,” she said. “If you walk out this door, you’re not going to walk around the block if that isn’t fixed. That’s our gateway. Those are the two properties that are first, and they’re first because they have to be first.”
Once people get around the corner to South Michigan Avenue, one of the first things they’ll see is Cheap Trick’s Chicago, at 2245 S. Michigan — the building that Gleichman is currently using as her office. Once Cheap Trick takes over, it’ll be a museum, restaurant, radio station and concert venue, hosting the band’s tour memorabilia as well as a couple of shows each year.
Up the street at 2215 S. Michigan would be George Daniels’ restaurant and bar, named after Chicago music’s “svengali,” as the Reader called him in a 2001 profile. It would feature live blues and soul music, and would pull from Michigan Avenue’s parallel history as record row, home to record labels like Chess and Vee Jay.
At 2229 S. Michigan would be a Chinese-themed restaurant tentatively called The Bund, which would offer cuisine from well-known chef Tony Hu as well as bottle service and banquet facilities.
Across the street at 2210 S. Michigan would be a two-story Irish bar aiming to capitalize on fans attending Bears and White Sox games.
The goal, Gleichman said, is to have all the businesses and hotels up and running on Motor Row in just a year, by summer 2013.
But the biggest unknown right now is the fate of Gleichman’s other project just to the north: Prairie Blocks, a massive hotel and retail complex that would sit on the block contained by Prairie and Calumet avenues, Cermak Road and 21st Street.
Gleichman’s got big plans for the property these days, which would have a grand total of close to 1,700 hotel rooms. The former American Book Company building on the southeast corner of the site would be turned into a 68-room boutique hotel, a new 1,000-room convention hotel would be built on the southwest corner of the site, and a 575-room hotel would be built on the block’s northeast corner.
Through the middle would be a new, private east-west street covered with a domed glass roof. Though it would be open to traffic sometimes, they’d have complete control of it, and as such the ability to close it off for special events, concerts and the like — much like Los Angeles’ L.A. Live surrounding the Staples Center.
On top of that, she said, they’ve negotiated the rights with McCormick Place to build a bridge across Cermak that would allow hotel guests to go right into the convention center without having to walk outside.
The problem is, Gleichman is currently embroiled in a nasty foreclosure and bankruptcy suits with lender CenterPoint Properties Trust, which has been trying to reclaim the Prairie Blocks property.
CenterPoint is trying to collect on the roughly $67 million they say they were due from Gleichman’s Olde Prairie Block Owner LLC as of 2009, but were blocked from foreclosing when Gleichman filed for bankruptcy. Since then, the Prairie Blocks team has presented four reorganization plans in federal court — each of which was shot down by the judge.
Gleichman and her team submitted a fifth bankruptcy plan last Saturday with a new lender in tow, Milwaukee-based JostSeeger. The new plan offers CenterPoint more cash up front than they’d been offered in previous plans — $20 million of the roughly $67 million CenterPoint says they’re owed. The rest would come soon after, Gleichman and her team said, partly from selling off pieces of the property to developers who would work to develop within the Prairie Blocks framework.
Gleichman thinks this plan will be enough to finally get them out of court and get moving. She’s encouraged that the judge has extended the case until an April 12 hearing, and is hoping he’ll accept it after several previous rejections. More than that, though, the plan addresses one of CenterPoint’s main objections up to this point: lack of money on the table up front.
“I hope they [CenterPoint] like this plan,” she said. “It gets them some cash; I think it gets them what they want. I feel that we’ve answered the objections they’ve had in the past in every way.”
The drama at Prairie Blocks isn’t just holding back Gleichman — it’s affecting most other projects on Motor Row, Ald. Bob Fioretti (2nd) said.
“There’s a lot of sluggishness on Motor Row because of Pam’s projects. Everybody’s waiting. There’s been no movement because they want to see what happens with the hotels,” he said. “Whether she succeeds or doesn’t succeed, we’ll know in 10 days.”