12 oct 07 | Chicago Sun-Times

Tall order for tower?

By David Roeder

Sears Tower owners to press city for zoning change, subsidy to add 2nd building as part of mega-million-dollar project next to landmark.

The owners of Sears Tower are preparing a plan for City Hall's review that calls for giving the building an environmentally oriented renovation and a new high-rise neighbor in hopes of boosting their returns on the property.The changes would be the biggest for the nation's tallest building since it opened in 1973.

But the project could involve a subsidy request of more than $60 million from the city, a commitment Mayor Daley could find hard to justify when he's proposing substantial tax increases.

Sources said the tower's ownership wants to construct a hotel or office building next door. The private investment would be about $400 million, according to one estimate.

A likely site is the north side of Jackson between Wacker and Franklin, which now contains a plaza and the entrance to the tower's observation deck. Beneath them is the tower's parking garage.

A building there would fulfill original ideas for the property as developed by the architectural firm Skidmore Owings & Merrill in the 1960s. Lead architect Bruce Graham allowed for another building on the block, although current zoning doesn't permit it.

The tower's owners include New York investors Joseph Chetrit and Joseph Moinian and a local representative, American Landmark Properties in Skokie. None returned calls Thursday.

But they have hired a well-connected team to pitch city officials on a zoning change and a subsidy. Heading the team is Robert Wislow, a long-time fund-raiser for the mayor and the chairman of U.S. Equities Realty. In March, U.S. Equities was given the management contract for the 110-story tower.

The law firm handling the zoning issue is Daley & George, whose lead partner is the mayor's brother Michael Daley. And the architect is Adrian Smith, formerly of Skidmore and now principal at Adrian Smith & Gordon Gill Architecture.

Smith's speciality is high-rises. He designed the 92-story Trump International Hotel & Tower under construction in Chicago and Burj Dubai, unfinished, but already crowned the world's tallest building.

Over the summer, the tower's owners said they hired Smith to conduct an environmental review of the 3.8-million-square-foot tower, with a focus on its lighting and maintenance procedures.

But the assignment apparently goes much further to include a new building connected to the tower and with such touches as a landscaped roof, one source said.

Smith and Daley & George partner Jack George declined to comment, while Wislow was said to be unavailable for interviews because he was traveling. A spokeswoman for the city's Planning Department said it has received no proposal about the tower.

City Hall sometimes agrees to a public subsidy of major developments amounting to 15 percent to 20 percent of the private investment.

The argument for the subsidy is that it assists construction that enriches the tax base. Critics counter that many subsidies are unnecessary, that the money collected is spent outside the public eye and that the financing scheme diverts money from schools and other public uses.

The Daley administration laid the legal groundwork for helping the tower a year ago when it included its block in the map for a new tax-increment financing district. Called the La Salle Street TIF, its stated purpose was to help owners of aging office buildings upgrade the properties.

As a potential target for airborne terrorism, Sears Tower has suffered since the Sept. 11, 2001, destruction of the World Trade Center buildings in New York. Market research firm CoStar Group Inc. said about 18 percent of the tower's office space is vacant, almost double the figure reported in early 2004.

That's the same year the Chetrit-Moinian group bought the property for $840 million. It arranged a refinancing early this year.