POTENTIAL WIN: Plans Emerging for Adaptive Reuse of Salvation Army Building as Boutique Hotel (Chicago 7 2021)

Braun & Fitts Butterine Factory / Wrigley Lodge / Salvation Army, Furst & Rudolph in 1891, with Art Deco/Art Moderne Remodeling by Albert C. Fehlow in 1947, 509 N. Union Avenue. Photo Credit: Eric Allix Rogers
Braun & Fitts Butterine Factory / Wrigley Lodge / Salvation Army, Furst & Rudolph in 1891, with Art Deco/Art Moderne Remodeling by Albert C. Fehlow in 1947, 509 N. Union Avenue. Photo Credit: Eric Allix Rogers
Braun & Fitts Butterine Factory / Wrigley Lodge / Salvation Army, Furst & Rudolph in 1891, with Art Deco/Art Moderne Remodeling by Albert C. Fehlow in 1947, 509 N. Union Avenue. Photo Credit: Eric Allix Rogers
“Chicago developer Jeff Shapack has purchased the Salvation Army’s main downtown campus in the River West neighborhood, a move that lines up what could be a massive redevelopment of the property.
“A venture controlled by Shapack Partners last month bought the charity’s longtime property along Grand Avenue between Des Plaines Street and Union Avenue, according to people familiar with the transaction. The sale price was not immediately clear, but sources with knowledge of the deal said Shapack paid close to $25 million for the property, which the Salvation Army had owned since 1931, and most recently served as its family store and donation center as well as an adult rehabilitation center.
“Shapack did not respond to a request for comment on his plans for the property, but sources familiar with the purchase said he intends to convert a six-story building at 509 Union Ave. into a hotel. Known for its high-profile projects in the Fulton Market District, Shapack Partners developed the Hoxton Hotel in the former meatpacking district and previously transformed a former manufacturing building in the neighborhood into a Soho House hotel and private club.
The Salvation Army put its property up for sale in 2019, framing it as an opportunity for a buyer to redevelop the site with a project as large as nearly 570,000 square feet, according to a marketing flyer from SVN Chicago Commercial, which brokered the sale to Shapack. In addition to the main building, the acquisition includes a property along Des Plaines Street with buildings that could be demolished to make room for a new, larger development. The site’s development prospects grew in 2017 after the city added more areas of the central business district that were eligible for higher-density zoning.
The property, along the southern edge of the Ohio Street feeder ramp to the Kennedy Expressway, stands between the trendy Fulton Market District and a 37-acre site along the Chicago River that is now home to the Chicago Tribune’s Freedom Center printing plant. That parcel is owned by Irving, Texas-based Nexstar—which took over the property as part of its acquisition of Tribune Media in 2019—and is one of three finalist properties that could be redeveloped with the city’s first casino.
“Shapack’s purchase comes as the developer looks to cash out on a big office project in nearby Fulton Market at 167 N. Green St. After leasing up all of the office space in the 750,000-square-foot building, Shapack and co-developer Focus recently hired the Chicago capital markets team at Jones Lang LaSalle to market it to investors, with bids expected to approach $550 million.
“The Salvation Army closed the River West property in March and has relocated some of its services to the charity’s other area locations, including one at 2258 N. Clybourn Ave. in Lincoln Park. (Ecker, Crain’s Chicago Business, 5/2/22)

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