If the city is successful, the properties would be offered to developers who would be invited to rehab a 45-story, 330,000-sf building at 188 W. Randolph St. and redevelop two five-story, 50,000-sf buildings at 178 and 180 W. Randolph St. While 188 W. Randolph St. is 62% occupied, the city notes the other two buildings are vacant. Current C3-7 zoning of the property allows for up to 408,000 sf on the 25,500-sf site.

"Economic investment has taken place in the immediate vicinity but not at the subject site," says department of planning and development assistant commissioner Ty Tabing, referring to the $78-million makeover of the Bismarck Hotel into the Hotel Allegro and Palace Theater.The city's price tag is likely to be a minimum of $12 million, the combined total of mortgages on the properties. The city's community development commission Tuesday gave the department of planning and development the go-ahead to buy the properties, either through negotiations with the separate owners or eminent domain.

Property records show Telegraph Properties, which paid $6.1 million for 188 W. Randolph St. in 1997, refinanced the building for $7.7 million in 2000. RN Realty and Asia Pacific LLC paid $1.1 million in June for 180 W. Randolph St., but placed a $4.3-million mortgage on it in November. In buying 178 W. Randolph St. for $285,000 last March, Northfield-based Kenmile Cos. got a $891,000 construction loan at closing, according to property records.However, the mortgage is not the only encumbrance at 188 W. Randolph St., where loose terra cotta in March 2001 prompted the city to place a lien on the property for the costs of a canopy over the sidewalk below as well as Chicago Transit Authority El tracks.

A sale of 188 W. Randolph St. require approval from a bankruptcy court judge, who will then decide which lienholders will be paid, and how much. The department of planning and development has been working since 1999 to acquire at least two of the properties, Tabing says, but dropped plans after getting assurances from previous owners that plans were in the works to redevelop them.