Speigel Building Update

Developer: Landmarking would help stalled Bridgeport project

By: Andrew Schroedter November 04, 2010

(Crain's) — David Dubin hopes the city makes the former Spiegel Inc. administration building in Bridgeport a landmark, a move he believes would help revive his stalled plan to redevelop the brawny structure into residences.

Mr. Dubin, CEO of Dubin Residential, in 2006 proposed converting the vacant, 250,000-square-foot building at 1038 W. 35th St. into loft-style condominiums, but was unable to obtain construction financing before the housing market crashed.

Mr. Dubin is back with a new plan for 158 units — likely to be rental — and 60,000 square feet of office or retail space.

The Commission on Chicago Landmarks on Thursday is scheduled to consider making the six-story, Art Moderne building a local landmark.

Although his plan has changed, Mr. Dubin, who has specialized in moderately priced neighborhood projects, is still facing a familiar problem: He doesn't have a construction loan.

Adding to that challenge, the mortgage used to finance his $6.4-million acquisition of the property came due Monday.

Mr. Dubin says he's in talks with his lender and is confident the two sides can agree on an extension.

"I've worked with banks for years and nothing ever gets done on time," he says.

He hopes landmarking will boost the project's visibility and improve his chances of landing construction financing.

The red-brick and concrete structure, built in stages for the catalog house and completed in 1942, was added last year to the National Register of Historic Places. The City Council would need to give final approval to make it a Chicago landmark.

Suprisingly, Mr. Dubin hasn't ruled out shifting the project back to for-sale housing, despite the neighborhood's backlog of unsold condos.

“There's a glut of mid-rise elevator buildings” in the area, says Jeff Benach, executive vice-president of Chicago-based Lexington Homes LLC, developer of a 39-unit townhouse project about a half-mile south at 37th and Sangamon streets.

In a report recommending landmarking for the building, the city's Department of Zoning and Land Use Planning notes the property's place in the city's history and its unique design, with “the bands of steel windows and vertical columns of glass block.”

Chicago was once the country's mail-order hub and Spiegel one of the city's largest firms, employing more than 10,000 workers at the end of World War II. It was founded in 1865 by Civil War veteran Joseph Spiegel.

Best known for its women's apparel, the company eventually moved its headquarters to the western suburbs. In 2005, the company emerged from bankruptcy protection as Eddie Bauer Holdings after selling off the Spiegel brand name. Spiegel was acquired last year by New York-based private-equity firm Patriarch Partners LLC.

A venture led by Mr. Dubin financed the purchase of the Spiegel administration building in 2005 with a $6.35-million mortgage from Midwest Bank & Trust. That loans was replaced in 2007 with a new loan from National City Bank that was scheduled to come due Monday, property records show.

A spokeswoman for PNC Bank, which acquired National City in 2008, didn't return a message.

To read the original story on Crain's Chicago Business