A pair of zoning amendments pushed by Ald. Brendan Reilly (42nd) will close the book on plans for two properties in the Gold Coast and Streeterville.

Reilly petitioned the city council’s Committee on Zoning to withdraw “plan-ned developments” — ordinances governing the large-scale development projects — for the former Cedar Hotel property at 1112 N. State and the old CBS building at 335 E. Erie and 630 N. McClurg.

Both buildings were in line for major redevelopments that soured over the past three years as the economy took its tumble into recession and slow growth.

A plan drafted in 2007 by then-developer Mark Hunt of M Development would have seen the vacant upper tier of the Cedar Hotel converted into a 220-room hotel.

Overlooking the ritzy Mariano Park triangle, an area where the city’s elite come to dine and shop, the hotel property is currently inactive save for a restaurant with a patio on the ground floor.

Hunt’s hotel vision was approved by former 42nd Ward Ald. Burton Natarus 11 days before he was Reilly defeated him in the 2007 municipal primary election. The planned development for the project designated a maximum height of 250 feet for the building.

“Neighborhood perception was such that this process was being rushed because I was taking office two weeks later,” Reilly said.

The plan lacked resident support, and the newly seated Reilly said that the 20-story building, with no planned guest parking, would add significant congestion to the area.

In late 2009, Hunt lost the property in a $33.2 million foreclosure suit filed by Anglo Irish Bank, according to news reports. The property is now owned by DRW Trading Group.

Hunt and DRW could not be reached.

Reilly said that the new owners have stated they have “no use for a 20-story building,” but have hinted at preliminary plans to turn the site into a boutique hotel.

“In considering less aggressive plans for the site, I felt it appropriate to downzone it to its original underlying zoning,” said Reilly.

At a zoning committee hearing held on Tuesday, Reilly told the committee that a reclassification of the property back to a downtown mixed-use zoning would prevent “potential irresponsible development” at the site, pending a more thoroughly deliberated community process.

Reilly’s amendment will mean the next project proposed for the Cedar will have a lower density than M’s hotel plan.

“We’re very happy with the change of the downzone,” said Dee Dee Spence, a resident and member of the Near North Neighbors. “There are very few areas in the city that have all this light and sunshine, and we’re hoping to maintain that sort of oasis that we have.”

The Cedar Hotel downzone passed the zoning committee, as did a similar amendment for the property containing the former CBS building at 335 E. Erie.

The site was formerly owned by Golub Real Estate Investment, which obtained a planned development in June 2008 which accommodated designs for a set of 53- and 56-story residential towers on the property. The 747-unit towers were slated to be built atop a ten-story office and parking facility.

Golub scrapped the tower plans and gave the site to Rehabilitation Institute of Chicago in a property swap in late 2009. Golub will still maintain their role as developer of the 65,000 square foot site, according to Crain’s.

“Clearly, RIC has no interest in erecting two residential towers,” said Reilly.

The rezoning will means lower densities for whatever new project emerges. Reilly said that designation would meld well with an institutional use.

Reilly said that these cancelled developments did not represent the end of real estate growth in his ward.

“No one should look at these two downzonings as an indicator of the future of the downtown real estate market,” he said. “These are two unique examples where old plans are no longer viable.”

Reilly said development momentum in his ward is healthy, and that his office continues to review “dense, big projects that will create jobs” each month.

“There are plans to develop both of these sites, and that’s the good news,” he said.

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By Bill from Gold Coast
Posted: 07/25/2010 9:39 AM

Our alderman O'Reilly has done more to kill development in our ward than the economy itself. Take a look at Oak Street - the giant growing potholes in front of the boarded up businesses -after he stunted a plan to do something with the old Esquire Theatre. Now the Ceder Hotel's neighbors are starting to close shop - a national retailer next door is vacating while several businesses across the street have gone under. That's the story we should be reading.