North Shore developer eyes Streeterville tower

By Thomas A. Corfman, June 04, 2008

(Crain’s) — A North Shore condominium developer known for his midrise towers in Skokie and Evanston is working on plans for a hotel/condo skyscraper on a prime site in Streeterville two blocks east of Michigan Avenue.

David Hovey, president of Glencoe-based Optima Inc., has a tentative deal to buy a site just north of NBC Tower, 455 N. Cityfront Plaza Drive, from a joint venture that includes Chicago developer Centrum Properties Inc., people familiar with the deal say. The exact purchase price could not be determined, but is between $45 million and $50 million, surprisingly strong given the fierce decline in the downtown market for new, high-priced condos.

Mr. Hovey was traveling and unavailable for comment. Executives with Centrum and the Chicago office of real estate firm Eastdil Secured LLC, which is marketing the property, did not return calls requesting comment late Tuesday.

A modernist architect and experienced developer, Mr. Hovey’s current condo projects include the Optima Old Orchard Woods, a 20-story complex with three interconnected towers west of the Edens Expressway, south of Old Orchard Road. He also has completed three major projects in downtown Evanston, including a 28-story tower at 1720 Maple Ave., noteworthy for its yellow-orange balcony railings.

Mr. Hovey’s Streeterville tower would be the third phase of a three-stage high-rise development called Cityfront Plaza that stretches from St. Clair Street to Fairbanks Court along the north side of Illinois Street.

The first phase is a 31-story condo building at the corner of Fairbanks and Illinois, which Centrum completed last fall. About 90% of the building’s 281 units have been sold.

Condo sales have gone more slowly for Centrum’s second phase, a 41-story building proposed for the corner of St. Clair and Illinois. About 40% of the proposed 253 units in that building are said to be under contract.

The 48,431-square foot parcel Mr. Hovey hopes to buy is between the existing building and the site of the second phase.

A key to his project would be a hotel, which would occupy the middle floors of a 50-plus-story tower for which the site is already zoned. The 775,300-square-foot structure would have residential units above the hotel and a parking garage on the lower floors. How many hotel rooms or residential units would be allowed under current zoning could not be determined.

Mr. Hovey already has begun discussions with luxury hotel operators, sources said, although their identities could not be confirmed.

Mr. Hovey has also developed condo buildings in Arizona. In Chicago, he has completed two projects, including a 120-unit development on the Near South Side that was finished in 2003.