A deal to save Uptown Theatre was all set. Until it wasn’t.
December 08, 2017
By: MARK GUARINO
At the intersection of Lawrence, Racine and Broadway in Uptown, the massive, once-grand Uptown Theatre, a shuttered movie palace that has awaited restoration for nearly 40 years, is slowly deteriorating. Its reopening—an expensive proposition that would require public and private funds—is key to the neighborhood’s vitality and could make it a premier destination for live entertainment.
Mayor Rahm Emanuel agreed. Shortly after his first election victory, in 2011, Emanuel spoke publicly, on WXRT and elsewhere, of wanting to create an Uptown music district anchored by the Riviera Theatre, the Aragon Ballroom, the Green Mill lounge and the Uptown. His Chicago Infrastructure Trust, a nonprofit he founded to create public-private infrastructure projects for the city, made the Uptown one of its priority projects.
And that’s the last anyone heard about it. Until now.
Documents recently obtained by Crain’s show that in 2015, a deal to make the theater a multipurpose entertainment complex was brokered by CIT but eventually fell apart.
According to internal CIT documents, the organization arranged a purchasing agreement in January 2015 to buy the Uptown from owner Jam Productions for $5.6 million and turn the theater into a nonprofit, making it easier to secure city, state and federal funding. The $120 million restoration would uphold its historic elements but transform it into a multipurpose entertainment complex offering concerts, movies, dining and more. With tenants identified and a financing model in place, it was the closest the Uptown, once one of the largest movie palaces in the world, had ever come to a genuine resurrection.
The deal’s closing, however, was dependent on CIT board approval and financing. That became impossible when that summer, Emanuel replaced the entire CIT staff and the plan was sacked. “I went through a state of depression. I was very disappointed,” says Ald. James Cappleman, 46th, who has advocated for the Uptown’s reopening since taking office in 2011.
Preservationists say that because of its decrepitude, something needs to happen fast to save the theater from permanent ruin. “If this isn’t resolved soon, this building will continue to deteriorate,” says Ward Miller, executive director of Preservation Chicago.
A reopened Uptown would, at 4,500 seats, have the largest theater capacity north of downtown (the Auditorium in the Loop has nearly 4,000). Mark Kelly, commissioner of the city’s Department of Cultural Affairs & Special Events, shares Emanuel’s vision that the Uptown would solidify the intersection of Lawrence, Racine and Broadway as a destination for live entertainment. “What would be most desirable is we get a mix of these awesome performance venues at a very high level to accommodate a lot of people,” Kelly says. “Then it’s a real entertainment district.”
So far, Cappleman has been heading an effort to beautify the area with the expectation that if you build it, they will come. A $6 million streetscape project kicked off in August with new sidewalks, lighting, crosswalks and a pedestrian plaza in front of the Riviera, all set for completion next summer. The second phase of the street renovations has started along Broadway; a $203 million renovation of the Wilson el station is complete.
In 2019 the city will start a five-year project to rebuild the nearby Lawrence, Argyle, Berwyn and Bryn Mawr Red Line stations and adjacent support structures so they’ll feature what riders now see at Wilson—wider platforms, better lighting—plus a new track and new bridges and viaducts. Next to the Lawrence stop, steps from the Uptown, the city is studying the potential for an upscale hotel, says Deputy Planning Commissioner Eleanor Gorski.
Cappleman considers the Uptown’s comeback his personal passion. “We’re doing this, not just for the Uptown community, but for the nation. It is going to attract people from all over the world,” he says. Cappleman says he has been working with Emanuel and Uptown Theatre co-owner Jerry Mickelson for years to create a viable path to get the doors open, which includes pushing for a business plan to court investors. A mix of private and public money is the only way it will happen, Cappleman says. “It’s going to be expensive, but it is doable.”
A COMEBACK LIKE KINGS?
The 92-year-old theater’s saga involves multiple owners, court battles, malfeasance, political infighting and more. Designed by Rapp & Rapp, its size and many flourishes—a grand staircase and lobby, 140-foot ceiling, 70-foot-wide stage, lounges, vestibules, balconies and even a nursery—made it thrilling. The theater transported people from their everyday lives through movies, a live orchestra, vaudeville shows and, tailored for sizzling Chicago summers, air conditioning.
The costs of maintaining such grandeur, however, were a burden. “We soon found out that was a really expensive idea to maintain,” says Preservation Chicago’s Miller.
The neglect dates to the 1970s, when the Uptown was used primarily for closed-circuit boxing matches and rock concerts by acts including the Grateful Dead and Bruce Springsteen. Accelerating its demise was co-owner Lou Wolf, a notorious Chicago slumlord and felon who purchased the theater in 1980 and shuttered it the following year. Unoccupied and uncared for for more than three decades, the building suffered water damage after the heat was turned off. In 2014, 6 inches of ice covered the grand stairway and 4 feet of water rose in the basement. Broken windows, animal infestation, vandalism and plaster-killing summer humidity followed, along with hundreds of thousands of dollars in unpaid property taxes.
But despite its unlucky history, reviving the Uptown is possible. The Kings Theatre in New York offers up a model.
The Kings was another architectural fever dream of Rapp & Rapp. Opening in 1929, it entertained Brooklynites along Flatbush Avenue for decades until it, too, fell into decline, closing its doors in 1977. In late 2011, Neil Heyman found 3-foot piles of fallen plaster; water leeched into the walls; mold; ornamental pieces and bronze handrails plundered by vandals; rusted steel support elements; and a large section of the roof blown away courtesy of Superstorm Sandy. “When people put eyes on it, they all said, ‘This is an incomprehensible task to overcome,’ ” says Heyman, vice president of Gilbane Building in New York, which provided construction management services.
But what made the Kings’ rebirth feasible was political will. In 2008, the New York City Economic Development Corp. and Brooklyn Borough President Marty Markowitz requested proposals for the site, and in 2010 the city selected Houston-based theater developer Ace Theatrical Group to take charge of the restoration and then operate it under a 55-year lease. The $95 million needed to get the job done came from the state, city and private stakeholders.
Accounting for $50 million of the total, the city of New York was the largest investor in the Kings because it saw the theater as the linchpin to rebuild Brooklyn. “It took the city years to get the right developer with the right vision and the right economic program in place to make this all work, but it did,” Heyman says. The Kings opened in 2015. It is now the third-largest theater in the New York City area and hosts 200 to 250 live performances a year. The Kings helped revive Flatbush as a destination with major retailers like Nike and Gap opening outlets nearby and, as the New York Times has reported, a seven-story, 69-room boutique hotel set to open soon.
SHOW UPTOWN THE MONEY. OR NOT.
But Chicago is not New York. For one, state funding is zero. The Illinois Legislature passed a bill in 2015 allocating a $10 million grant for the Uptown restoration, but that money went away under Gov. Bruce Rauner.
Second, the Uptown is under private ownership, unlike the Kings, which New York City purchased in 1983 after it became a tax-delinquent property. The city of Chicago had the same opportunity with the Uptown at that time. It did allocate more than $1.4 million in tax-increment financing to stabilize the building in 2008, which included removing, tagging and storing the building’s terra cotta for its protection.
Which brings us to Mickelson and Chicago-based Jam Productions, one of the nation’s largest concert promoters. Through UTA II, a separate company, Mickelson and partner Arny Granat purchased the Uptown in 2008 for $3.2 million at a court-ordered foreclosure sale. (Neither Mickelson nor Granat would comment for this story.) Two years later, the Urban Land Institute, a nonprofit think tank in Washington, released a report saying the Uptown would be the “crown jewel” to a potential entertainment district.
Behind closed doors, CIT vigorously pursued Emanuel’s wish to bring back the Uptown. According to internal documents, a two-year planning process involved more than $1 million in pro bono work from dozens of leading architecture, real estate and legal firms. The result was an ambitious plan that called for a major film chain as a tenant that would present world premieres, Imax films and specialty programming for children in what the documents describe as “the world’s largest movie theater.” Jam was chosen to exclusively book concerts, and an unspecified restaurant group was to offer premium food service. The plan also called for simulcasts of sporting events from around the world on the big screen. Documents show CIT’s historic restoration part of the plan earned preliminary support from the Illinois Historic Preservation Agency, the Chicago Landmarks Commission and the National Park Service.
The documents also show CIT sold the project as a public-private partnership that would drive traffic to Uptown and create more than 600 jobs. Buying the property from Jam and turning it into a nonprofit would make it a public works project and eligible for public money, namely a $10 million state grant and $20 million in TIF funds. CIT estimated that, after operating expenses, the Uptown would generate $4.1 million for the city in its first year.
To get the ball rolling, CIT asked for an immediate $500,000 upfront and then $3 million to secure tenant leases and produce schematic drawings. The organization had secured interest from Knoxville, Tenn.-based Regal Cinemas, Austin, Texas-based Alamo Draft House and other chains. Documents called for leases to go out the third quarter of 2015 and to be signed by late that year. Construction was set to start in 2017. Using the Kings as a model, the plan started to look feasible. Cappleman says he was ready to make an announcement in August 2014. “I was very, very excited about it. It was a dream come true,” he says.
But unlike in Brooklyn, the plan died on arrival. Emanuel asked CIT CEO Stephen Beitler to resign in July 2015, along with the staff who worked on the project. They were replaced with a staff headed by Leslie Darling, a city lawyer. Under Darling, CIT changed its mission. Darling said its new goal was to reduce reliance on city funding and replace it with state, federal and philanthropic grants, which deviated from Emanuel’s original plan to have corporate investments fuel projects.
The mayor was unwilling to free up money for the Uptown out of fear it would come back to haunt him if the plan failed, according to a source familiar with the project who asked to remain anonymous. Emanuel had already taken heat for using TIF money to acquire land for a hotel and a DePaul University basketball arena in the South Loop amid criticism the public money was not being used for schools and neighborhoods. Walking away from the plan “was political risk aversion,” says the source.
Emanuel spokesman Grant Klinzman says the proposal “didn’t work or even fit into CIT’s mission” because the trust’s vision “has always been to work on public infrastructure. The development of a private property was not contemplated as part of CIT’s mission. This was an exploratory project that ultimately did not pan out for the CIT.”
A source at City Hall who does not want to be named says the project failed because CIT didn’t name a tenant. “The key financing element was finding a major movie exhibitor who would sign a lease, and then you could finance against that lease. But it turned out (CIT) couldn’t find a movie exhibitor who was willing.”
But another person familiar with the CIT project disputes that account. “The notion that this wasn’t in line with the vision and mission of the trust is false on its merits. The whole point of the (CIT) was to pursue transformative infrastructure projects using public and private partnerships.” He adds that long-term leases were not yet signed because they were dependent on the mayor’s approval of the plan.
Cappleman concedes that the amount of public money required “was a big, tough ask. I couldn’t argue that was not the case. Given our budget crisis, it would ask a lot of my colleagues to support me while there are a lot of demanding issues in their wards,” he says.
WILL THE CURTAIN EVER RISE?
Klinzman says opening the Uptown “is still a priority for the city.” Mickelson is pursuing other development partners, says Gorski, the city’s deputy planning commissioner. Gorski says the city has not required Mickelson to submit a timetable, but she says “he is in very close discussions” with a partner. Cappleman says Mickelson turned in a business plan in April 2016. It, too, will depend on TIF funding, but it won’t be as high as the $20 million requested in the CIT plan. “This one is scaled back quite a bit in terms of scope,” Cappleman says. It awaits approval by the city finance committee.
In the meantime, there are hazards in keeping the building intact, though in 2016 the Uptown Square District, which includes the theater, was given landmark status, ensuring that none of the buildings within it can be demolished. The CIT documents describe the Uptown as “a blight and safety hazard” and says that as of 2015, Mickelson owed more than “$3 million in liens to the city and has no viable plan.”
In 2014, nine years after UTA II purchased the Uptown, the company turned off the building’s heat in the thick of winter, which caused a 30-foot-tall, 3-foot-wide icicle to grow in the basement, according to the Chicago Tribune. Mickelson told the Tribune the water was turned off except in one bathroom on the main floor. He disputed the size of the icicle. His attorney, current Ald. Patrick Daley Thompson, 11th, says UTA II shut off the heat because it was in the midst of converting the system from oil to natural gas.
Next year will be the 10th that the Uptown has been in new hands and the 37th it has remained dark.
Cappleman acknowledges that “there have been a lot of false promises given to the public” over the years. But he says that one day the mighty Uptown Theatre will rise. “It is not a guarantee. It’s going to take a lot of hard work, but we’re going to make it happen.”