“The Chicago developer teaming with Google to redevelop the James R. Thompson Center into offices for the tech giant is working on a new deal to buy a landmark office building less than a half-mile away in a potential hotel redevelopment.
“Mike Reschke has been selected as the buyer of the 40-story Jewelers Building, according to people familiar with the situation. Reschke is considering the possibility of converting at least part of the 556,200-square-foot property at 35 E. Wacker Drive into a hotel during a time of soft demand for older office space, they said.
“The exact price could not be determined, but it is expected to be more than $70 per square foot, which would total more than $39 million. The deal has not been completed and could still fall apart in a fragile property sales market amid rising interest rates and other economic concerns.
“There hasn’t been an office building sale of more than $50 million in downtown Chicago since Reschke was part of three interconnected deals in July 2022, including one in which he bought the Thompson Center for $105 million and plans to complete early phases of redeveloping the former state-owned building before selling it to Google.
“Reschke’s firm, Chicago-based Prime Group, is known for converting vintage office space into hotels. That includes converting sections of the office building at 208 S. LaSalle St. into two separate hotels: the JW Marriott and the LaSalle hotels, the latter of which is part of Marriott’s Autograph Collection.
“As part of the Google deal, The Prime Group and partner Capri Interests also bought office buildings at 111 W. Monroe St. and 115 S. LaSalle St. They flipped ownership of the LaSalle Street building to the state of Illinois as part of the Thompson Center purchase price, while planning a mixed-use redevelopment of 111 W. Monroe that also could include a hotel.
“The Jewelers Building hasn’t changed hands since 1981, when it was bought by The Dorchester Corp. But lender John Hancock Life Insurance in August moved to foreclose on the Toronto-based firm when its loan matured, according to property and court records.
“The 1920s building was designed by a protege of architect Daniel Burnham, and local lore has connected gangster Al Capone to the building, including stories that his organized crime outfit ran a Prohibition-era speakeasy from a cupola atop the tower, which later became a bar and restaurant called the Stratosphere Club.
“It was ‘supposedly supplied with its liquor by Al Capone’s criminal organization,’ according to a report on the building by the Commission on Chicago Landmarks. That report was created before the building became a city landmark in 1994.
“‘While there is no documentary support for this story, if true it would have a particular irony in that one of the other tenants of the building in its early years was Joseph Triner, local head of the Illinois Liquor Control Commission,’ the report added. Historians have disputed the Capone stories, pointing out that the Stratosphere Club didn’t open in the top floors of the building until the late 1930s. By then, Prohibition had ended and Capone was in prison.
“More recently, German-born, Chicago-based architect Helmut Jahn — who designed the Thompson Center — ran his firm from the Jewelers Building cupola until he died in 2021. His firm is no longer based in the building.
“Although connections to Capone appear to be local legend, the tower was designed with criminals in mind. It once featured an internal car-parking system to protect jewelers from being robbed of their valuables, using a mechanized electrical system and a series of elevators that lifted cars to parking spaces on the second through 22nd floors, according to a city report on the building.
“More recently, the tower has made movie cameos in ‘Batman Returns’ and ‘Transformers: Dark of the Moon.'” (Ori, CoStar News, 11/13/23)
- Chicago Developer Agrees To Buy 40-Story Office Tower, Eyes Hotel Conversion; Mike Reschke’s Prime Group Selected as Buyer of Landmark Jewelers Building at 35 E. Wacker Drive, Ryan Ori, CoStar News, 11/13/23
- Reschke eyes Wacker Drive landmark for hotel conversion, Danny Ecker, Crain’s Chicago Business, 11/13/23
- The Jewelers Building 35 East Wacker Chicago Landmark Designation Report December 1992
- Goettsch Partners Jewelers Building 35 East Wacker Project Description