"We're stepping in on the office portion. It's our deal, it's no longer their deal," Newman says." I know for a long time there's been stops and starts at this location, and we've all read about Mills' internal issues. But they're moving, they're spending money, they're under the gun to complete their part of the building as well." A Mills spokeswoman did not return a call for comment on this topic.

Lee Golub, executive vice president of Golub & Company, handled the transaction for the Golub-BlackRock venture. The office building will rise at 22 West Washington. Golub will work on architecture designs for the residential units, and plans to begin construction, on the roof of the then-completed Mills retail building in 18 months, Newman says.

Newman says he's very bullish about building on State Street, which has also been going through a transformation. Retail buildings have been torn down nearby to make room for condominiums, though some say that condo demand is slowing in downtown Chicago. However, Newman said Golub's buildings won't be trying to compete with the Trump and other high-rise condos going up on Michigan Avenue. "We're not going to have the tallest buildings, we're here for the location," he says. "That area of State is really becoming more of a mixed-use area, with retail having always been there, but hotels and condos moving in, and a great location for the Theater District. Coupled with the theater and local entertainment, it will be a desirable place to work and live."

The Chicago office of Holiday Fenoglio Fowler represented Mills in the land sale to the Golub-BlackRock venture. The architect for the office building is Perkins & Will. The general contractor is W.E. O'Neil Construction Co. The architect for the residential towers is Solomon Cordwell Buenz.

Mills has made strides to recovery in recent months. A month ago it completed the sale of its interests in its three foreign assets, Vaughan Mills in Ontario, Canada; St. Enoch Centre in Glasgow, Scotland; and Madrid Xanadu in Spain to Ivanhoe Cambridge Inc. for about $988 million, generating proceeds of about $500 million before transaction costs.

Last week it received an offer by Israeli real estate firm Gazit-Globe Ltd. to invest up to $1.2 billion in the firm, which it is considering. In an SEC filing, Gazit-Globe reported it had acquired 9% of Mills' shares. It does not want Mills to sell all or parts of its remaining assets at what most likely would be distressed prices. Rather it would prefer the company to recapitalize.