Old Sears HQ Heads for Landmark Status

The incentive, along with landmark designation, was recommended for the nearly 100-year-old property at 3333 W. Arthington St. by the commission on Chicago landmarks Thursday. The tax break, the result of a lower property assessment over a 12-year period, will help offset a $5.9 million investment Dallas-based PNL Co. is making, beginning when it bought the building in November as a result of a bankruptcy proceeding for $1.93 million.

PNL Co.'s strategy is to keep the 251,677-sf asset as an office building, even though it is 77% vacant. The new owner is creating a niche, aiming at government agencies, non-profit groups, Downtown companies needing back-office space or start-ups attracted by the $12 per sf to $14 per sf lease rates, says JCF Real Estate vice president Michael Goebig, in charge of managing the property for PNL Co. Among the tenants who have stayed are US Rep. Danny Davis and Cook County commissioner Bobbie Steele.

"We're aggressively marketing the property to all types of organizations," Goebig says. "We're not sure how it will shake out. We could add more non-profits, but we also could lease 50,000 sf of back-office space."

PNL might have benefited had a proposed Cook County circuit court been located on Homan Avenue near the Eisenhower Expressway, about three blocks from the Sears building, Goebig admits. "It couldn't have hurt," he tells GlobeSt.com. "We might've gotten some ancillary spin-off, but it's still good back-office space for companies who don't need to be Downtown…We're turning the tide, and there's a general good feeling now."

PNL has embarked on a $3.7-million capital improvement project, more than four times the amount it was required to spend to earn the Class L incentive. Owners must spend at least 50% of the Cook County assessor's market value, which in PNL's case, would be just $850,000, Shiffrin says. PNL aims to have work complete by July 2003.

The project budget includes $1.5 million for a heating, ventilation and air conditioning system, which was the first priority after PNL took over the five-story, Goebig says. Other items included cleaning the marble floors for the first time in 30 years, he adds, at a cost of about $20,000.

"We've got our work cut out for us to bring it back up to good office building standards," Goebig says.

Designed by architect George C. Nimmons, the Classical and Prairie style building continued to be used as office space after Sears left the West Side for its namesake tower in the 1970s, before leaving the city entirely for a campus in northwest suburban Hoffman Estates.

Preservation planner Nora Jones says the tax incentive is expected to spur private investment in the North Lawndale neighborhood. The proposals must pass the city council, starting with its committee on historical landmark preservation.