For All Nails #142: Yet More Really Boring Stuff

by Noel Maurer

From The Statist
13 June 1975

Once again, the west shore of Lake Michigan may be graced by the world's tallest building. The Michigan City Planning Board has given the go-ahead for a 115-storey rask in the heart of downtown Michigan City that would soar to 1,650 feet, or 2,100 feet with the antennas on the top. That is well above both the current record-holder, the Pemex Pyramid in Henrytown, and the former champion, Michigan City's own Kramerica Building.

The developer, North American Realty, says it has financing in place for the N.A. £500 million project and commitments to lease a chunk of its 765,000 square feet of office space. The building will contain 40 floors of condominiums; the developer expects some units to fetch N.A. £1m or more. It also counts on revenue from two 450-feet antennas broadcasting vitavision signals.

Will it be built? One hurdle is the economics of rasks. Ricardo Verde, a property economist at the University of Indiana, argues that they are disproportionately expensive to build and operate. And this project carries two more uncertainties.

First, recent reforms to the way the government allocates airwaves in North America make it difficult to work out the value of the broadcasting antennas. Second, the building's 360 residential units will be in the heart of the business district, an area that has long emptied itself at the end of the working day. FN1 Many property experts wonder whether the investors, described so far only as "a consortium of financial institutions from west of the border", will really open their chequebooks for such a risky venture.

Is this a sign that the commercial-property market has once again lost its head? Probably not. Most analysts consider the Michigan City market to be healthier than ever. Despite North America's prolonged economic expansion, the city has had virtually no new top-quality office construction since the beginning of the 1960s. Demand has finally caught up with supply; vacancy rates are at record lows. In addition, last year's growth in real-estate investment trusts promises to bring more transparency to an industry traditionally characterized by inside deals.

Tobias Scott, president and CEO of North American Realty, hopes to start construction of his record-breaking rask by the middle of next year. And even the sceptics concede that the design would be an impressive addition to what is already North America's best urban skyline.

Forward to FAN #143: Puputan.

Forward to 27 June 1975: Lost in Space.

Forward to Statist: Weakness is Strength.

Return to For All Nails.

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