In 1989, an entire city block in the Chicago Loop was demolished for redevelopment. The 1990-91 recession killed those plans, and Block 37 would remain vacant for 17 years. This block was in the central core of the city, some of the most valuable urban RE in the country. And it sat, and sat. The city put an ice rink in each winter, but the hole in the city was startling.
The Block 37 experience now comes to Seattle via the 1 Hotel and Residences. "Luxury with a conscience"!
Sorry, folks, but it's almost April, and a project of this size will not come together for 2009. Or 2010. Or 2011. The current project will fail. The hole will be a grand embarrassment in our city center until someone shells out the money to fill it. It will be a while.
Instead, Seattle gets a nice hole in the ground. Where has the condo-tel model been proven? Miami? It has not been proven anywhere; rather, it is an obvious sign of out-of-control leveraged speculation and a blow-off top of the bubble. When they started announcing luxe condo-tels here in Seattle, I knew we had peaked.
What happens next? Mark my words, this project will be cancelled. The lenders will pull any construction loans, specuvestors will pull their deposits, and this gets killed. This will not survive the credit crunch and general deflation underway.
If we get a cold winter, I guess we could go skating. Or we could fill it with water and spear sturgeon. My idea! Credit, please.
The only consolation for this disaster is that only a parking lot was demolished for the sake of this hole. In Chicago, we wrecked an eclectic block of theatres and an old landmark, the sort of block that brings a lot of character to a modernist city landscape.
Only now, with the Californization of the Chicago Loop, in the greatest credit bubble of all time, has Block 37 been redeveloped with a condo and retail mix. I liked the old Block 37, and would trade the new one for it in a heartbeat.