In early 2001, the stock market, which had risen to dizzying heights, fell precipitously. Federal Reserve chairman Alan Greenspan moved swiftly to cut interest rates. These short-term rates did not register much of an impact on the long-term rates; however, developers and builders whose construction financing was tied to an index saw the cost of their construction loans drop. Buyers were able to secure lower-cost mortgages, due to the interest rate drop.
By the summer of 2001, the sales of new homes at Central Station had slowed, while some other builders in Chicago were not selling at all. In Chicago’s suburbs, the situation was quite different. Lower interest rates — and the ability to fix mortgage rates — and an enormous amount of refinancing activity led to near-record sales.
In the city, the housing market was not good and builders were eagerly anticipating the fall selling season. From September to mid-November is traditionally a good selling period in the housing industry. But the events of September 11, 2001 — events that permanently changed the lives of so many people in the United States and around the world — determined this would not be a traditional season in any respect.
The attacks by terrorists on U.S. sites created an uncertainty that would linger for years. Most activities of all types came to a halt. Decisions were postponed. Bankers, builders and everyone else waited to see what long-term impact these events might have on our way of life.
In the real estate market, most sales centers’ levels of activity slowed dramatically and, predictably, so did sales. However, Prairie District Townhomes’ sales center, which had opened on September 18, 2001, experienced an amazingly positive response, selling 25 of 49 units in its first two weeks. The initial sales of the Prairie District Tower condominium that opened in early October of 2001 were similarly strong. While sales were off from previous years, Central Station was doing better than other developers and builders in the city.
Central Station had initiated a “branding” effort in the second quarter of 2001 — a program aimed at creating a neighborhood identity. Mounting an aggressive public relations campaign and a massive program that included newspaper ads and direct mail, Central Station invested a substantial amount of money to bring its story to the community. This campaign differed from the type of advertising the builders were doing and was directed and financed by Central Station. While each of the builder promoted their own line of housing and products, Central Station was promoting the area and the neighborhood it was creating.
And the effort paid off. Further, people began to see Central Station as Chicago’s next Lincoln Park. This image was reinforced by the high-rise building of Museum Park and Prairie House, visible from all directions on Lake Shore Drive and Michigan Avenue. The noticeably heavy activity in townhomes and other construction further reinforced the sense of energy in the community.
– From “Central Station: Realizing a Vision,” developer Jerry Fogelson’s account of the creation of Central Station in the South Loop, published in 2003.