By Ally Marotti and Blair Kamin, Chicago Tribune
The owners of the Aon Center, Chicago’s third-tallest skyscraper, on Monday unveiled plans for an observatory atop the building, potentially setting up a heated competition for tourist dollars with established observatories at Willis Tower and 875 N. Michigan Ave., the former John Hancock Center.
The stakes are as high as the buildings. A thriving observatory can be like a gold mine for a building’s owners, producing far more revenue per square foot than ordinary office space. But there are only so many tourists like Kiara Culmer, who on Monday was visiting the 360 Chicago observatory atop 875 N. Michigan, to go around.
The view of Lake Michigan and distant skyscrapers, including the Aon Center, was amazing, but her family, visiting from the Bahamas, had other things to spend their time and money on, she said.
“As a tourist, I would definitely not be going to all three (observatories),” said Culmer, as her husband Neil and their 2-year-old son Karter peered out the window. “So somebody is going to lose.”
If built, the as-yet unnamed observatory would make Chicago the only American city with three observation decks besides New York, where visitors take in views from atop One World Trade Center, the Empire State Building and Rockefeller Center. The question is whether all three can survive.
“We believe there’s a huge market that can sustain all three,” Steve Sales, principal of the New York-based 601W Cos., the Aon Center’s owner, said in an interview previewing the plans, which include a glass-sheathed elevator tower and a thrill ride that would vault visitors over the building’s edge.
If he’s right, it could make a big difference for his company’s bottom line.
“A successful observation tower will bring in a lot more revenue per square foot than an office tenant will, even in prime real estate,” said Craig Furfine, a clinical professor of finance specializing in commercial real estate at Northwestern University’s Kellogg School of Management.
Furfine pointed to the Empire State Building observatory, which made $21.2 million in the first quarter of this year — roughly a third of the revenue for the entire building, according to a quarterly earnings report from its owner, the Empire State Reality Trust.
The $185 million Aon Center plan, which was presented Monday at a meeting hosted by Ald. Brendan Reilly, 42nd, seeks to take advantage of the building’s location across from Millennium Park, Chicago’s most popular tourist attraction.
601W projects it would create $220 million in municipal taxes and an economic impact of $915 million over 20 years. But the estimates do not account for business the new observatory could take away from its competitors, 360 Chicago and Skydeck Chicago at Willis Tower.
Skydeck Chicago, which brought in $25 million in admission revenue in 2014, the most recent figure available, draws about 1.7 million visitors annually. It features The Ledge, whose protruding glass boxes offer views 1,353 feet straight down. Tickets for adults cost $24 — similar to the projected price at the Aon Center observatory. But Skydeck’s drawing power is boosted by Willis Tower’s identity as the city’s tallest building, an attribute that a member of the building’s management team cited Monday when asked about the proposed newcomer to the observatory game.
Willis was the tallest building in the world for more than two decades, and “nothing’s going to change that iconic nature of this building and the draw we’re always going to have,” said David Moore, senior vice president and portfolio director at Equity Office, which oversees Willis Tower for its owner, the Blackstone Group.
Chicago attracted 55.2 million visitors in 2017, an increase of 2.5 percent over 2016, according to Choose Chicago, the city’s tourism arm.
601W Cos. projects the Aon observatory would take two years to complete and eventually will attract about 2 million visitors a year. Along with a restaurant and entertainment center planned for the top and underground areas of the building, the observatory could generate $30 million to $40 million in annual revenue, Sales said. The building’s net revenues are currently at about $50 million.
The Tribune reported last year that Blackstone Group is planning a $20 million upgrade to its Skydeck, expanding it to two floors and adding an open-air ledge walk, among other additions. The Hancock’s observatory was revamped and rebranded in 2015, when it opened Tilt, a compartment that leans outward from the building’s exterior.
The Aon Center’s answer to The Ledge and Tilt would be the Sky Summit, an attraction that would lift cabs full of visitors over the building’s edge for 30 to 40 seconds. Tickets for that experience would cost extra.
Over-the-top features like Tilt, which costs $8 more than the standard admission price of $21, are a draw for Leizhu Morissette, a 19-year-old from Quebec who was visiting 360 Chicago Monday afternoon. She had visited Skydeck, too, but found something extra in Tilt. It’s unlikely she would visit three observatories though, Morissette said. Two is fine, but she would likely pick those based on the extra experiences and whatever deal she could find.
“If it was just a plain tour, I wouldn’t do it,” she said. “I have my pictures from Skydeck.”
In Chicago, only the 1,451-foot Willis (originally Sears) Tower and the 1,389-foot Trump International Hotel & Tower are taller than the Aon Center. The under-construction Vista Tower, projected to rise 1,191 feet, could bump it to fourth place. The planned exterior elevator at Aon would shoot up the building’s northwest corner and rise to a height of 1,181 feet, surpassing the glass elevator built onto the side of a cliff in the Wulingyuan area of China that claims to be the world’s tallest at 1,070 feet.
The Aon Center plans call for some exterior steel columns and the granite cladding above the building’s 82nd floor to be removed to create uninterrupted views from the observatory. The Aon Center, originally known as the Standard Oil Building and designed by New York architect Edward Durell Stone, uses closely-spaced exterior columns, creating windows that are just five feet wide.
The estimated $185 million cost also covers the elevator tower and other planned features, such as an entrance pavilion at the building’s southeast corner and underground passageways leading from the pavilion to the elevator.
The Aon Center also has a different vantage point than the former Hancock Center and Willis Tower, which are situated a little more than a mile to the north and west of Aon, respectively. The views will be different, said Phil Hettema, president of the Hettema Group, which is designing the observatory. The Pasadena, Calif.-based firm designed the One World observatory atop One World Trade Center in New York.
“More than anything else, the location is absolutely perfect for an observatory like this,” Hettema said. “It’s really dead center in downtown.”
But some visitors to Chicago only have the time, resources or desire to visit one observatory. The Empire State Building’s is usually the only observation deck Cleveland-area resident Sybille Schomerus, 50, visits when she is in New York. When in Chicago, she only goes to 360 Chicago.
“This one gives you the view that you need,” she said, as she sat with her cousin looking out 360 Chicago’s floor-to-ceiling windows. When you visit a city, “you’re doing one. I do the same in New York City … then you have other stuff to do.”