Booth MBAs Set to Pitch Big Idea for Chicago’s Block 37

Booth School of Business MBAs Scott Ebbott and Matt Olsen have come up with a fresh use for the space that had been intended under Chicago’s Block 37. According to a story in Crain’s Chicago Business, the duo plan to pitch their idea to turn the space into a data center at an upcoming competition.

108 North State Street is a site currently under development as an urban center located in the Loop community area of downtown Chicago. Recently, the space has had a bit of a troubled past. The three building structure was being developed by Joseph Freed and Associates LLC, as a project inherited from the Mills Corporation. However, in 2011 Bank of America foreclosed on the property and sold it in 2012 to CIM Group. Retail development responsibilities were undertaken by Joseph Freed and Associates LLC. By February 2012, the building remained only 26 percent occupied due to the undesirability of leasing space in bankruptcy proceedings. The retail spaces remained only 52 leased at the time.

Whereas previous ideas to use space included plans for a museum, a casino and ice rink, or a domicile for “pod cars,” the two Booth MBAs are proposing to use the world’s largest unfinished basement—one that cost well over $200 million to build and which never is going to be a train station—as a data center.

As Ebbott and Olsen explained to Crain’s, the shell of the superstation is located near key fiber optic data lines and on the same block as an electric substation. The plan makes even more sense given Block 37’s location: The facility is in the heart of a central business district in which demand for data storage is soaring, but yet tucked away in a very secure, near invisible location that would attract almost no pedestrian traffic.

Proper infrastructure is also in place: Ebbott explained how data storage equipment throws off a lot of heat, but the underground space is relatively cool, so excess heat could be pumped out and sold to adjoining buildings, such as occurs in Seattle with Amazon’s headquarters.

Ebbott and Olsen have begun meeting with potential users and investors, and will pitch it to mega-investor Sam Zell in the upcoming Kellogg Real Estate Venture Competition at Northwestern University at the end of the month.

Others are taking note too.

“I think it is an interesting potential use knowing limited facts about the site,” Chris Jensen, a principal at Anderson Pacific, a private investment group focused on telecom infrastructure that owns a South Loop data center, said. “Good for the Booth students for thinking it up.”

regions: Chicago

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