Editorial: Water Tower Place and the death of the vertical mall

Chicago Tribune

3 days ago

When Water Tower Place opened its cosmopolitan doors in 1975, the audacious notion was that all of the upscale delights of a suburban shopping center could be replicated on prime Magnificent Mile real estate by a building that soared 74 stories on a tight urban footprint.
Anchored by Marshall Field's and Lord & Taylor, Urban Retail Properties had given Chicago its first vertical mall.
There were always ritzy hotel rooms and condominiums (four units housing Oprah Winfrey) on the highest floors, of course, but hordes of shopaholic residents and tourists still relished traveling skyward in Water Tower's gilded glass elevators in search of clothes at Abercrombie and Fitch, Benetton, Fiorucci or Laura Ashley. A camera store, Shutterbug, was up on 7. Fans of art and architecture books could ascend to Rizzoli. Diners could rise in search of Japanese cuisine. In the hierarchy of Water Tower in the last two decades of the 20th century, the higher you were in the retail center, the more exclusive you could claim to be.
The anchor department stores helped the tenants on the upper floors, of course. Customers would spill out of Marshall Field's on 6 and take the elevator down, stopping at other stores along the way.
All of that is no more. If ever there was a moment to write the obituary of the vertical mall, Water Tower is the ideal corpse.
But we come today not to bury what once was the epitome of retail aspiration in Chicago but to outline the chance for a rebirth.
Water Tower's problems hardly are confined to this mall alone, of course, but are symptomatic of the broad, internet-induced malaise that has afflicted brick-and-mortar retail. Amazon founder Jeff Bezos had plenty of money to spend on his Venetian wedding in the last few days, but malls such as Northbrook Court and others now have become melancholy destinations.
In the case of Water Tower, Brookfield Property Partners walked away in 2022 as retail vacancies exploded, turning over the keys to its lender, MetLife Investment Management. By 2023, MetLife seemed to have given up on the idea that consumers would climb for a shopping experience.
Water Tower's malaise began to spread, impacting most of the upper reaches of North Michigan Avenue, once Chicago's most sought-after retail block. High-profile stores such as Borders, Ghirardelli Chocolate Co. and Filene's Basement closed across the street. Tourists in search of nostalgia found their destination of choice had changed for the worse.
Last week, MetLife tapped commercial real estate services firm JLL to actively market floors 4 through 8 for sale or lease, CoStar News reported. There's a massive 500,000 square feet up there and marketing documents say that MetLife has become resigned to the limits of its retail footprint being just floors 1, 2 and 3.
Lots of suburban malls have, or had, three floors. In essence, MetlLfe was for the first time announcing its intention to kill the verticality of Chicago's original vertical mall by cleaving the building in two, meaning it could have two separate owners.
But what happens to floors 4 through 8 seems to us more important than you might think.
North Michigan Avenue remains in serious need of help, even as the section of Boul Mich near the riverwalk shows signs of renewal, with landlords snapping up commercial space at discount rates, like recently at Tribune Tower. North American Real Estate last week completed the purchase of the 47,000-square-foot retail space on the ground floor of the former home of this newspaper at 435 N. Michigan Ave., CoStar News reported. CoStar did not report the purchase price, but you can bet the value has come down from prices floated prior to the pandemic, especially since Tribune Tower has struggled to find tenants in its new, post-Tribune configuration. To the north, though, there has been even less action, although there is greater potential for radical change.
Take, for example, the stalled plan to better connect the Magnificent Mile to the shimmering lake through a wide and architecturally splendiferous new pedestrian bridge crossing DuSable Lake Shore Drive and connecting Michigan Avenue directly to Oak Street Beach and the beautiful Lakefront Trail without forcing pedestrians through a grim underpass. Little has happened since that impressive scheme was envisioned, even though it would be a game-changer when it comes to opening up the Mag Mile to the water and to points north and south. To blow this opportunity as Lake Shore Drive is re-envisioned in coming months would be a huge mistake.
One idea we like for the top floors of Water Tower was developed by the group trying to get Chicago to imagine its downtown as a 'cultural stadium,' filled with cool new streetscape ideas, restaurants, markets, public art and free, digitally powered tourist attractions. Lou Raizin, one of the leaders of 'Team Culture,' pitched the idea of opening up the massive repositories of the city's major museums, which have room only to display a small portion of their collections, and allowing visitors to access and walk through them, as already is the case with museums in New York, London and Rotterdam. That's an ideal use for those floors, especially since the Museum of Contemporary Art is a neighbor, although it raises the question, of course, as to who would foot the bill, relatively modest as it would be.
This we know. Water Tower does not need more dentist's offices or cosmetic surgeons or tacky torture museums. Vertical malls may, alas, be a thing of the past, but 500,000 square feet is a formidable chunk of real estate in what once was one of the most exciting and aspirational blocks in the Midwest. It needs to be classy to draw the eye and attract both residents and visitors alike.
You just have to look up to see the possibilities.