Tuesday, February 24, 2015

Insurance Exchange Building, Chicago
 by: chicago designslinger

 [Insurance Exchange Building, Chicago (1912) D.H. Burnham & Co., architects (1928) Graham, Anderson, Probst & White, architects /Image & Artwork: chicago designslinger]

In 1909 real estate promoter/businessman Napoleon Picard hit upon his latest money making scheme. It was time for Chicago's expanding, cash generating and scattered-around-town insurance company businesses to come together in a new, modern office structure. He made an appointment to see his friend architect Ernest Graham, head honcho at the offices of D.H. Burnham & Co, with a proposal.

  [Insurance Exchange Building, 175 W. Jackson Street, Chicago /Image & Artwork: chicago designslinger]

Burnham & Root had designed an Insurance Exchange building over a decade earlier, across the street from the firm's famous Rookery Building. But the Exchange building had outgrown its usefulness, and the booming insurance industry had outgrown the building. Picard figured he could get a number of firms leasing space inside the old Exchange to move into a new structure, and convince even more insurance related businesses clustered around the Jackson/La Salle/Wells Street section of the Loop to join the march over to a sparkling new Insurance Exchange. The only problem was that Picard needed financing for his grand plan. Graham saw an opportunity and called on his friend and fellow opera devotee, powerhouse Chicago attorney Max Pam. The wily lawyer served as the lead legal counsel in the creation of the U.S. Steel Corporation, and then worked alongside J.P. Morgan in combining the Deering and McCormick interests into the corporate giant, International Harvestor. This time around, and on a significantly smaller scale, the lawyer formed the Insurance Exchange Building Corporation, made he and Graham the majority stock owners, named Graham chairman and president, sold bonds to finance construction, gave Picard a few shares of the stock, and made him the leasing agent and building manager.

  [Insurance Exchange Building, Chicago /Image & Artwork: chicago designslinger]

The corporation, and their agent, secured a piece of land between Sherman Place and Wells Street that extended a half a block south of its Jackson Street frontage. The new building followed the highly developed and successful program that were the hallmarks of the Burnham firm. Glazed terra-cotta molded into shapes and sizes recalling the glory days of the architecture of Greece and Rome, all wrapped around an interior lightwell supplying offices with lots of light and air. Picard filled-up the 520,000 square feet of rentable space in no time. The partners realized that they were sitting on a goldmine, and talks of expansion were underway soon after the building opened in 1912 . The only problem was that the property located on the southern half the block was owned by the University of Chicago, and they weren't interested in selling. Then, finally, after years of negotiations, a 99-year ground lease was signed. By the time the addition - designed by the Burnham successor firm of Graham, Anderson, Probst and White in a seamless match up - was finished in 1928, Max Pam was dead and Graham now had a group of partners in the venture. Pam left his shares of the Insurance Exchange Corporation and the addition's Underwriters Corporation, in trust, to his brother and sisters. And although money continued to roll-in, the Depression, and dropping rental rates around the city began to take a toll, and vacancies increased.

  [Insurance Exchange Building, Chicago /Image & Artwork: chicago designslinger]

Then in 1936 Ernest Graham died and left his half share in the two corporations to a trust he'd set-up in the hopes of using the monies generated by the Graham Trust to establish an art and architecture school in the city. A nearly crushing blow occurred in 1939 when a group of tenants made it known that they were unhappy with the inequitable rental rates in the Exchange. Many of the 1912 renters had signed 30 year leases at the going rate of anywhere from $1.25 to $1.35 per square foot. Tenants in the addition, or new to the older building, were under lease rates in the neighborhood of $3.00 or more per square foot - the highest in the area. The addition had made the Exchange Chicago's largest office building with 1.2 million square feet of leasable space, which was expensive to maintain. So to keep the place afloat, rates were increased for newer tenants in an effort to cover expenses. Once again Napoleon Picard entered the picture - this time however as a rival. He offered office space to insurance minded firms in a brand new building at $1.75 to $2.00 a square foot. Even Graham, Anderson, Probst & White, which had no financial or any other interest in the Graham Trust, offered to design a new building for the disgruntled renters. The Insurance Exchange managers were finally able to workout a deal with existing tenants by raising below market rates and lowering above market rents, keeping the building in the black - barely. Eventually the Pam family wanted out, and the Graham Foundation became the sole owner. The income helped the struggling enterprise survive, and in 1967 the Foundation sold their mammoth structure for $19.2 million.

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