FREED UP
Joseph Freed and Associates LLC is growing up and out of Chicago through vertical mixed-use development.
Kevin Jeselnik

At times, it seems that the brass at Joseph Freed and Associates LLC (JFA) has this development game all figured out. Larry Freed, president of the Chicago-based development firm, would never make such a claim, but the company displays a wealth of knowledge and sound philosophy for growth that explains its steady rise from a regional builder of community retail centers to a national developer of expansive mixed-use communities. The company’s portfolio has evolved during the past decade to include a number of significant vertical mixed-use projects, which have become a major focus for Freed as it expands into new markets beyond Chicagoland.

Chief Development Officer Robert Fink discusses Freed’s Hilldale project, a mixed-use redeveloment of a formerly enclosed mall in Madison, Wisconsin.

Joseph Freed formed the company in Chicago after World War II, as the general contracting firm Capitol Construction, which quickly became a development firm focused on strip and community retail centers around Chicago’s northwest suburbs. Joseph Freed and Associates was launched in the 1960s, and continued to focus on building ground-up grocery-anchored centers, as well as the acquisition and redevelopment of existing centers, until the mid-1990s. Then, the company began working on transit-oriented mixed-use communities along Chicago Transit Authority (CTA) and Metra train lines in Chicago and its suburbs such as Arlington Heights, Palatine, Des Plaines and Park Ridge, Illinois. The projects incorporated a mix of retail, office and residential components, all of which were developed by Freed.

“One of our advantages as we grew was that we did both the residential and the retail components,” says Robert Fink, chief development officer. “We weren’t dependent on selling off one of the components to make the project happen. That has led us to some opportunities, because we control our destiny on both sides of the equation.”

The transit-oriented developments marked the company’s shift of focus to vertically integrated mixed-use projects, which they now focus on developing in the major markets consumers “would like to either live in or visit,” Freed explains. “What we found over time in mixed-use is that the amount of retail you need to make the project successful needs to be large, and the project has to be in a quality location.”

Freed is redeveloping the former Carson Pirie Scott building on State Street in downtown Chicago into a 1 million-square-foot office project with significant retail space on the first and second floors.

Freed currently has two such projects underway within one block of each other along the rejuvenated State Street in downtown Chicago. The company is handling the redevelopment of the former Carson Pirie Scott building at State and Madison streets, which is now known as the Sullivan Center, named after the famed architect, Louis Sullivan, who designed the landmark building in 1903.

This project continues Freed’s long tradition of historic preservation as appropriate to its various projects and for which it has won numerous awards over the years.

Freed acquired part of the Sullivan Center property in 2001, primarily to redevelop and lease the 400,000 square feet of office space not occupied by the Carson’s department store, and embarked on the redevelopment of the retail space after Carson’s left the building earlier this year.

“The evolution of [the Sullivan Center] really followed the evolution of the department store itself,” explains Paul Fitzpatrick, senior vice president of development. “We are now focused on the 600,000 square feet of space that Carson’s has vacated. Of that space, we are going to take the lower levels — the first and second floors —- and create retail space.”

Last month, Larry Freed also announced that after 30 years in the northwest suburbs, Joseph Freed and Associates LLC is moving its headquarters to the fourth floor of the Sullivan Center in downtown Chicago early next year.

Leopardo Construction recently finished gutting the interior retail space. The property is being marketed to large-format retailers, as well as office and education tenants.

Joseph Freed & Associates is developing 108 North State Street on the former Block 37 site in downtown Chicago.

Freed’s second State Street project involves jumpstarting the once-stalled Block 37 (108 North State Street) development, which is also bounded by Dearborn, Randolph and Washington streets. This transit-oriented project is moving forward and gathering momentum.

Golub & Company acquired the right to develop the office building and is completing a 550,000-square-foot office tower that will be anchored by the CBS Channel 2 Chicago broadcasting studio and the world headquarters of Morningstar Inc.

Future plans for this phased project also call for a hotel and 400 residential units, which will be built on top of the retail component that is currently under construction.

According to Fitzpatrick, the retail portion of the site will total approximately 280,000 square feet over four stories. Below the retail will be a four-level CTA station offering train service to both O’Hare and Midway airports. The first signed tenant is David Barton Gyms, which will occupy approximately 50 percent of the fourth floor.

“We are pushing full-priced, fashion-forward retail tenants,” Fitzpatrick says. “There will be a lot of restaurants introduced, hopefully including some new concepts that have not been seen in Chicago yet.”

“We are also looking for new concepts from retailers that are already in the city, or retailers that want to launch a store with a new look,” Fink adds.

The company is very excited about the effect Block 37 will have on the area’s retail corridor. “It will probably have a larger impact on Dearborn, Randolph and Washington than it will on State Street,” Fitzpatrick says. “The challenge is tying that whole West Loop and civic area back to the eastern part of the loop. Of the four entrances we have off the streets, we debate which is the most important one. The entrance off of Dearborn, right off of Daley Plaza and the Picasso [sculpture], will draw many people to the center, as will the CTA station, with all the commuters having to enter and exit the development.”

Freed is redeveloping the formerly enclosed Hilldale Mall near the University of Wisconsin campus in Madison into an open-air mixed-use community with retail, restaurants, and a mix of apartment, condominium and townhome residences.

As an extension of the company’s move to larger, vertical mixed-use projects, Freed has developed a niche in bringing such a product to university towns. It is busy working on the second phase of Hilldale, a development located 3 miles from the University of Wisconsin in Madison. Freed acquired the Hilldale Mall, an enclosed center developed by the university in the 1960s, and has completed significant additions and renovations on the 38-acre site.

“When we first came into the Madison market, the mall was experiencing vacancies. What we noticed was that there were a number of national retailers who were not represented in the market,” Fink explains. “We thought that if we created a mixed-use opportunity, it would attract retailers looking to enter the Madison market.”

When the University Foundation decided to sell the property, it issued an RFP, which Freed won. “The mall was essentially a sea of parking, and we envisioned it a little differently,” Fink says. “We saw it as an opportunity to bring residential to the mall, and to give it a more urban feel.”

Ronald Douglass highlights Freed’s activity in Ann Arbor, Michigan, where the company is currently developing three mixed-use projects around the University of Michigan.

Freed added a main street component in front of the mall with approximately 75,000 square feet of retail including The North Face, Anthropologie and Flemings, which serves as one of the signature restaurants. Anchoring the entertainment component at the center is a new six-screen Sundance Cinemas, the first in the nation.

The interior of the 420,000-square-foot mall was renovated, and to compensate for the loss of the parking lot, Freed added a 667-vehicle parking structure, which it shielded from the residential community with a collection of 40 townhouses and condos.

The second phase of the project will include a 55,000-square-foot store for Whole Foods, which is relocating from a smaller location down the street; The Heights, a 112-unit residential condo building with approximately 40,000 square feet of office space; a 40,000-square-foot health club and ground-floor retail; an approximately 1,100-stall parking garage; a 140-key boutique hotel; and additional pad sites and green space. Work on the second phase is underway; the Whole Foods is expected to open March 2009.

Freed is currently developing three vertical mixed-use projects in Ann Arbor, Michigan, including Ashley Terrace (pictured above).

In Ann Arbor, Michigan, the home of the University of Michigan, Freed has three vertical mixed-use projects underway that incorporate residential, student housing, retail and light office space. Ashley Terrace is currently under construction, consisting of a 10-story building with 99 for-sale condos, a 15,000-square-foot office component, and 15,000 square feet of retail.

Another project, Four Eleven Lofts is being planned near the university. “[This project] will feature a student housing component that will have 96 units and 344 beds,” says Ronald Douglass, senior vice president of development. “It is located about two blocks from the Quadrangle, the university’s main campus.”

Glen Ann Place, the third project in Ann Arbor, is an apartment complex with approximately 25,000 square feet of office on the second floor and 25,000 square feet of street-level retail.

As the company completes the work currently in its pipeline and looks toward new ventures, Freed explains some of the benefits his company’s philosophy creates. “I think the advantage that this company has over most other developers is that we can actually do all the different product types. It really gets to the economics of the project, because if you have the flexibility to adjust to the needs and pressures of the marketplace, you have a real advantage over the competition.”