Developer scraps Franklin Point plans
(Crain's) — An Irish condominium developer has dropped plans for $150-million mixed-use development just four blocks south of the Sears Tower.
Chieftain Group recently terminated a contract to buy the development site at the southwest corner of Harrison and Wells streets, says David Crawford, principal at D2 Realty Services Inc., the Chicago-based developer that owns the two-acre property. Limerick, Ireland-based Chieftain last spring agreed to pay nearly $20 million for the parcel, part of an undeveloped eight-acre tract known as Franklin Point.
With the real estate market in a deep slump, Chieftain decided to pull the plug on the project, which would have included two 25-story towers with about 200 hotel rooms, 200 apartments and 250 condos.
"They just couldn't hold on anymore, so that's it," Mr. Crawford says. "We're putting (the property) back on the market."
He declines to discuss whether Chieftain will lose any earnest money for backing out.
"For legal reasons I am unable to comment at this juncture," Sean O'Sullivan, Chieftain's chief operations officer, says in an e-mail.
Chieftain is struggling with weak sales at its only other Chicago condo project, Lexington Park, a 35-story tower at 2138 S. Indiana St. Buyers are expected to start moving into the high-rise this spring, but just half of the building's 333 units were under contract as of January, according to Chicago-based real estate consulting firm Appraisal Research Counselors.
The aborted sale to Chieftain is the latest in a series of setbacks for Franklin Point, a riverside parcel that has confounded developers since it was cleared nearly four decades ago. The last developer to take a crack at the entire site was Chicago-based Rokas Development Inc., which last year dropped plans to build as many as 3,000 homes, a hotel and a marina there after failing to secure financing to buy it.
While D2 plans to put its two-acre parcel back up for sale, the owner of the other six acres, Skokie-based developer Russland Capital Group, is content to do nothing for the time being.
"We're just sitting on it right now," says Russland partner Jacob Bletnitsky.
"It's not the time to proceed with" a development, Mr. Bletnitsky says, though he's hoping for a boost should Chicago land the 2016 Summer Olympics.
Russland bought its parcel last spring for $32.5 million, while D2 paid $8.6 million for its site in August 2005. Mr. Crawford says D2 hasn't determined what the new asking price will be for the property but said he expected it to be close to Chieftain's price.
