$90 Million Office-To-Apartment Conversion In Skokie Nears Final Approval

SKOKIE, IL — A plan to redevelop a pair of mostly vacant office buildings into a 245-unit apartment complex is set for final approval by the Skokie Village Board.

The seven-story Old Orchard Towers office complex, at 5202 and 5250 Old Orchard Road, will keep existing commercial tenants on the ground floor until office leases expire, according to village staff.

The two-phase plan calls for 22 three-bedroom units, 115 two-bedrooms, 84 with one bedroom and 24 studio apartments.

It also involves building a rooftop recreational space on the upper deck of the existing parking garage, which would include a pool, walking track and other amenities for residents.

The proposal to redevelop the 43-year-old office complex was approved by Skokie plan commissioners in December and received preliminary approval from village trustees last month. It does not include any changes to zoning or demolitions or additions to the existing buildings.

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The office-to-apartment conversion comes amid record-high office building vacancy rates in the Chicago suburbs, with more than 30 percent of existing office space sitting empty last quarter, according to a report from commercial brokerage JLL.

"We believe that this would mark the first and largest adaptive reuse of an office complex into residential uses which is environmentally and socially responsible," representatives of the developers said.

A joint venture of GW Properties and the Drake Group are under contract to buy the property from current owner Zeller Realty, which purchased the site for $63.5 million in 2007.

Chicago-based Zeller is now selling it for $11 million — a significant loss — with GW and Drake planning to spend another nearly $80 million to convert the building to residential use, Crain's Chicago Business reported last year.

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At first, the plan did not involve any affordable units or payments toward affordable housing programs in the village.

Plan Commission Chair Paul Luke said the developer is "currently unable to voluntarily provide affordable housing units or a payment in lieu to the Village due to the economics of the development and building costs associated with the project," according to a memo to the village board ahead of its vote to preliminarily approve the project.

"To make this project economically viable without any public financial assistance (which we are not seeking)," the developers said, "we have not accounted for any designated affordable units within the development plan."

But according to an April 10 memo from village attorney Michael Lorge, the developer has agreed to designate 5 percent of the units in the south tower as affordable for households with 120 percent of area median income for the next 25 years.