Fulton Market developer Shapack plans big River West project

Shapack did not respond to a request for comment on his plans for the property, but sources familiar with the purchase said he intends to convert a six-story building at 509 Union Ave. into a hotel. Known for its high-profile projects in the Fulton Market District, Shapack Partners developed the Hoxton Hotel in the former meatpacking district and previously transformed a former manufacturing building in the neighborhood into a Soho House hotel and private club.

Magnetar Capital founder Alec Litowitz is also an investor with Shapack in the Salvation Army property, according to a source. The duo previously teamed up on the development of a 70,000-square-foot office building at 811 W. Fulton St. that they sold in 2019 for more than $50 million, then a record-high price paid per square foot for a Chicago office building.

The Salvation Army put its property up for sale in 2019, framing it as an opportunity for a buyer to redevelop the site with a project as large as nearly 570,000 square feet, according to a marketing flyer from SVN Chicago Commercial, which brokered the sale to Shapack. In addition to the main building, the acquisition includes a property along Des Plaines Street with buildings that could be demolished to make room for a new, larger development. The site’s development prospects grew in 2017 after the city added more areas of the central business district that were eligible for higher-density zoning.

The property, along the southern edge of the Ohio Street feeder ramp to the Kennedy Expressway, stands between the trendy Fulton Market District and a 37-acre site along the Chicago River that is now home to the Chicago Tribune’s Freedom Center printing plant. That parcel is owned by Irving, Texas-based Nexstar—which took over the property as part of its acquisition of Tribune Media in 2019—and is one of three finalist properties that could be redeveloped with the city’s first casino.