Cynthia Riccolo’s memories of Water Tower Place begin with her father, who loved to go shopping. “It was really funny. My dad would wake me up on Sundays and say, ‘Let’s go shopping. And I’d think, ‘Oh no, again?’ ”
Riccolo’s dad would fire up the Buick LeSabre and drive the 82 miles on I-55 from Dwight, population 4,000 in central Illinois, alongside the old Route 66 to Chicago, steering the family straight for Water Tower Place and its underground parking.
She bought her Izod blouses there, introduced her family to her future husband at the Mity Nice Bar and Grill, and when she left central Illinois behind, she moved to a Gold Coast condo almost in the shadows of her favorite mall. And in that spot for 19 years, Cynthia was a loyal customer, hitting it several times a week. When she had a daughter and moved to the suburbs, they traveled downtown to American Girl together.
Water Tower Place shopping mall was once a beacon, its allure radiating out from 835 North Michigan Ave., magnetically pulling in people from Chicago, its suburbs and from the small- and medium-sized towns throughout the Midwest.
So it came as a bit of a surprise this April when Brookfield Property Partners, one of the largest commercial real estate companies in the world — and the owner of the building — simply handed over the keys to the bank that held its $300 million loan, like some distressed homeowner who lost his job and was underwater on the mortgage to his local bank.
It was a stunning move, but not entirely unexpected. As iconic as the vertical mall was in its heyday, it is symbolic today in an entirely different way as a poster child, in its vacant storefronts, for the woes besetting retail.
The 800,000-square- foot Water Tower Place is trying to find its mojo again, a tall order, but a critical one for this landmark shopping mecca that sits in the middle of the most important retail district in the city, the Magnificent Mile. A new tenant from the city’s cultural sphere may be a step in the right direction.
Whether the block-wide, gray marble-clad building at the corner of Michigan Avenue and Pearson can be transformed is a question with impact up and down the Magnificent Mile, where the vacancy rates have doubled in recent years to more than 24%. The causes are familiar: competition from internet sales, and two years of pandemic shutdowns and restrictions that dramatically reduced tourism and downtown foot traffic. Although in-store sales actually outpaced online sales nationally in 2021, and tourism is creeping upward, convention business is sparse, and only 39% of downtown workers are back at the office, according to Kastle, a workplace security company.
Retail trends are not solely to blame. Looting incidents during 2020 protests, and an increase in high-profile crime and violence downtown — even from fairly low levels historically — threatens any progress, business owners told WBEZ. Water Tower mall already bans youth under age 18 from the mall on Friday and Saturday nights without an adult, and Mayor Lori Lightfoot has just tightened youth curfew rules in response to the shooting death of a 16-year-old at Millennium Park in May.
Solving these problems for Water Tower Place and downtown won’t be easy, but there are a lot of people trying. The trouble is, many of the innovations that made the mall so exciting and popular have turned it into a “relic” or are no longer practical.
A landmark loses its mojo
In its day, Water Tower Place was on the cutting edge.
Opened in 1975, it was Chicago’s first multipurpose skyscraper mall, nine floors surrounding a grand atrium bisected by elongated escalators adjacent to flowing water. Patrons waiting in line to ride the glass elevators with spectacular 360-degree views. Seventy-four stores, including a luxury Lord & Taylor on one end and a hometown Marshall Fields on the other, a Ritz-Carlton hotel and expensive condos up top, and live Broadway theater inside. Oprah Winfrey lived there. Middle-class shoppers rubbed elbows with celebrities and brands that reeked of class and prestige with the hope that a little of that would rub off on them.
And of course, the building was located on the “Magnificent Mile.” It was the American Dream, housed in steel, glass and marble.
“That’s where we would go,” said Sara Homrok, 47, who grew up in Naperville. “My mom would get annoyed, she wanted to take us to the museum. We wanted to go to Water Tower Place. It was ahead of its time; it was like an event. You go in now, and it’s the saddest place on earth.”
“It was always a magical place,” said Oak Park resident Lynn Olson, 62, who regularly took her kids to American Girl, telling them it was a museum in the hopes of not having to buy them an expensive doll. “Time marches on, I guess.”
The mall is, of course, named after the building across the street, the 153-year-old Water Tower that survived the Great Chicago Fire and symbolized the city’s rebirth.
“It’s important, it’s a landmark,” said Gabriella Santaniello, CEO of the retail research firm A Line Partners. She lived in Chicago for several years beginning in 2010, and felt then that Water Tower Place was getting long in the tooth. “They’ve just got to evolve with the times.”
The COVID-19 pandemic left carnage everywhere. The Mity Nice where so many families enjoyed a meal together — including Lynn Olson’s on many Thanksgivings — is gone, closed in 2020, as is the popular Foodlife with its wide-ranging selections. Macy’s left its gargantuan, multilevel 300,000 square feet space in 2021; Gap closed. American Girl is still there, but there’s fewer square feet and fewer dolls.
But in truth, the slide began before the COVID-19 pandemic, and it has not been limited to Water Tower Place. Another mall on the Mag Mile, The Shops at North Bridge, lost so much value that an investor in the property transferred its stake to their partner and recorded a $28 million loss. Now, inflation and labor shortages are weighing further on retailers.
“The question is, what is [Water Tower Place] now?” asked urban strategist Paul O’Connor, former head of the city’s marketing arm, World Business Chicago.
Brookfield, which acquired Water Tower Place in 2018 from Chicago’s General Growth Properties, had announced plans to “repurpose and rebalance” the mall in 2021, including tearing out the escalators. Target floated taking over Macy’s space but thought better of it. The property was valued at $810 million in a 2013 transaction but after 10 more retailers left, Brookfield decided to cut its losses. With the glut of space up and down the Mag Mile, there was little hope of getting the kinds of returns that Brookfield’s investors demand, Twende Advisors’ Reagan Pratt, a real estate consultant, explained. Starting fresh with a lower valuation might actually help the new owner “make it work,” Pratt said.
The mall property is now being managed by Chicago firm M & J Wilkow on behalf of MetLife Investment Management, but neither are talking. Ald. Brian Hopkins, whose district includes the mall, did not return calls for comment.
As for Sarah Homrok and her family, they now go west — to the Oakbrook mall. Parking is cheap and easy, and there are plenty of enticing restaurants and even some performances, she said. Homrok’s two teenagers and a 10-year-old traveled to Water Tower mall recently. “I don’t think they were too impressed with the offerings. You can go to Oak Brook and get the same thing.”
The search for the next big draw
O’Connor said that what the mall and the street needs most of all is “juice” — his shorthand for creative, innovative ideas.
In consultant-speak, today’s juice is “experiential” retail. It means that people not only want something they haven’t seen before, but they want an experience to go along with their purchase. The Apple Store and the Starbucks Reserve Roastery further south on Michigan Avenue are examples of that — places where shoppers come to see and feel as well as to buy. A pop-up show called the “Dr. Seuss Experience” filled Macy’s former space in Water Tower Place this winter. Down the street, a “Museum of Ice Cream” is opening at the base of the newly renovated Tribune Tower this summer.
Kimberly Bares, former director of the Rogers Park business alliance, was welcomed to her new job as CEO of the Magnificent Mile Association by a pandemic that began a few months after her hire. The retail downturn “is not an easy problem, so there are not easy answers,” she said.
But she and her colleagues are already thinking big. A report titled “North Michigan Avenue: Strategies for a Vibrant Future” issued in March by a group of business and city leaders envisions a grand promenade running from the historic limestone Water Tower, past the Museum of Contemporary Art, to the lake along Chicago Avenue; and a soaring pedestrian bridge stretching from Michigan Avenue, over DuSable Lake Shore Drive, to Oak Street Beach. The bridge, modeled on a structure in Moscow, would make it possible to see and get to Lake Michigan from the Mag Mile without descending into dank tunnels under the beachfront drive.
Also in the report: a more run-of-the-mill property tax on landlords raising about three quarters of a million dollars passed the City Council this year; it will be used for cultural events like “Music on the Mile” and for security cameras. The city also awarded Bares’ group money from a federal grant to deploy a team of uniformed “ambassadors” — unarmed security personnel with radios to help tourists, assist the homeless and report criminal activity on the Mag Mile — starting in June.
But most of the report is focused on getting people excited about going downtown to enjoy attractions such as music, art and culture, and Water Tower Place recently scored its own big get on that front. In April, the world-renowned Hubbard Street Dance Chicago surprised everyone and moved from a temporary home on the North Side into the mall’s fourth floor.
“That’s what I mean by ‘juice’,” O’Connor said. “It’s a really creative move. That energizes the space. You walk by the dancers and feel that this gives you energy, this is a really cool place. It just radiates.”
Ironically, it was Macy’s exit that prompted Hubbard’s move. “It was top of mind when we were looking for space,” said director David McDermott, having sold a West Loop building that needed $5 million in maintenance. “We were open to exploring what at the time seemed like a really wild idea. When we got this opportunity, we just jumped at the chance.”
After renovating a 13,000-square-foot space in the mall and installing a professional-grade “sprung floor” for the dancers, the company moved in to rehearse for a return to live performance and in-person instruction this spring. The best thing about it, McDermott said, is the 5-minute walk to the beach. “North Michigan Avenue is a truly unique place in the world,” he said. ‘This is an amazing place that has durable institutions that will never go away.”
Shoppers have a partial view of the rehearsal space now, but Hubbard has plans to ramp up its engagement quickly, including dance classes for Parkinson’s patients and summer classes for 14- to 25-year-olds that will bring thousands of young people into the building. That’s a promising turn of foot traffic for the Claire’s boutique that sells jewelry and shiny trinkets to tweens and has a storefront near the studio door.
The dance theater’s move to a shopping mall has solved at least one supply-chain nightmare. When a shipment of fabric for costumes was delayed ahead of an upcoming show, Hubbard’s designer Branimira Ivanova was forced into a last-minute mad-dash shopping expedition. She scoured almost every one of the more than dozen of the mall’s clothing stores for outfits and quickly “re-customized” them for dance.
The show went on.
Zachary Nauth is a freelance writer based in Oak Park. Justine Tobiasz of WBEZ contributed archival photo research.