Block 37’s New Owner Wants To Get Rid Of ‘Old Mall Vibe’

DOWNTOWN  — Block 37, a prominent shopping center in the Loop, has a new owner and will also soon unveil a new name.

Edwards Realty Company, a local real estate development and property management firm that specializes in revitalizing underperforming properties, announced Wednesday that it bought the property for $30 million, less than half of what it sold for in 2012.

The company plans to turn one of the Loop’s most notoriously difficult development sites into a “modern experiential destination,” with year-round programming, strategic partnerships and entertainment offerings, although the owners did not name specific businesses that might be coming to the complex.

“Michigan Avenue is recovering quite well, and we think State Street is bound to do that” too, Ramzi Hassan, president of Edwards Realty Company, said in an interview with Block Club. “We’re in at the right basis to make the investments that we need to make to really serve the community and carry out what we think … could really work here.”

Ald. Bill Conway (34th) praised the purchase Wednesday, calling it “a significant vote of confidence in downtown Chicago’s momentum at exactly the right moment.”

“With Google establishing a major presence and LaSalle Street reinvigorating, the market is sending a clear signal that the Loop is back,” Conway said in a statement. “Block 37 is one the Loop’s retail crown jewels and this deal repositions this currently-declining property for the modern mixed-use market we need.”

The site’s inception dates back to 1979, when the Chicago Plan Commission declared about 27 acres of the North Loop, including the area of Block 37, “blighted,” clearing the way for a major urban-renewal effort.

In 1989, under Mayor Richard M. Daley, the city cleared the entire block bounded by State, Washington, Dearborn and Randolph streets for an ambitious shopping and office development. However, plans collapsed due to a mix of political infighting and insufficient funding, leaving the site largely vacant until 2005. 

Block 37 opened in 2009 amid a foreclosure fight with its developer, Joseph Freed and Associates, according to Crain’s. Bank of America eventually took control of Block 37 before selling the mall to CIM Group in 2012 for about $84 million. CIM listed the site for sale in 2023.

Over the years, the massive five-story, 300,000-square-foot mall has struggled to attract customers and retailers. It has lost notable tenants such as Anthropologie, Franchesca’s, Latinicity food hall, and most recently local business Potting Bench Plant Studio.

The mall currently sits at 65 percent occupancy with an AMC movie theater, Five Iron Golf, First Ascent Climbing Gym, a Magnolia Bakery, Sephora, Akira, Zara and a Banana Republic Factory Store still open inside.

‘The Mall Is Dead’

On Wednesday afternoon, Block 37 was fairly empty. As commuters caught the CTA Red and Blue lines located in its basement, the upper levels remained relatively quiet. Few shoppers roamed, while others sat at the communal tables spread across the different floors. 

“This mall is dead,” said Peter Scarborgh, a Pilsen resident.

Scarborgh stopped by Block 37 before work Wednesday to burn some time. He told Block Club he frequents the AMC theatre inside Block 37, located on the 4th floor. But other than that, the mall does not draw him in.

“People aren’t really going down to that phone store down there and shopping,” Scarborgh said, referencing a phone repair shop on the ground floor. “It’s like give us places to shop, give us places to eat, give us a destination.”

Darlene Valdez, a Downtown worker from the suburbs, wandered into Block 37 for the first time Wednesday, looking for a spot to grab lunch. She was surprised to find the mall mostly empty. She said the vibe was a stark contrast to that of Woodfield Mall in Schaumburg, which she frequents and says is typically very busy.

Valdez said more national brands, along with food options, would get her to visit Block 37 more often. She also thinks a kid-friendly option would be popular with tourists.

“Chicago is not really a kid-friendly place. You know, it’s great for adults. You go Downtown, you go to restaurants, happy hour, whatever. But it’s not necessarily kid-friendly, so maybe that can attract consumers,” Valdez said. 

Hassan told Block Club he plans to get rid of that “old mall vibe” and usher in a “more cosmopolitan vibe,” hoping to cater to more tourists, commuters and residents. 

Part of that plan includes bringing back some sort of food and beverage component to the third floor, where Latinicity once was. About $10 million went into the infrastructure for the food hall and Hassan said the company is “sure as hell are going to figure out a way to use it.”

Hassan said the company has already had “several discussions” with potential tenants and that word is out in the brokerage community, but stressed they’re being picky about who gets in. He estimates about 80 percent of interested retailers don’t match his long-term vision or bring the kind of energy he wants for the center.

“Our leasing is going to look like a mix of the national, regional and local businesses,” Hassan said.

Part of the plan is to set aside room for local entrepreneurs to try out their ideas through short-term “incubator” and pop-up leases. Hassan pointed to the company’s Pop Local program at other centers, which lets small businesses test a concept in the community where they already live or work.

The company also plans to survey shoppers and commuters to see what the community wants for the space. Materials will be posted throughout the building and in the Pedway with QR codes and asks on social media.

Edwards plans to roll out new programming during the holiday season, with a new name for the site being unveiled in the new year.

______________________________________________________________________

Support Local News!

Subscribe to Block Club Chicago, an independent, 501(c)(3), journalist-run newsroom. Every dime we make funds reporting from Chicago’s neighborhoods. Already subscribe? Click here to gift a subscription, or you can support Block Club with a tax-deductible donation.