Corporations: City in the Sky

As they turn their backs on the job of transporting people, the managers of U.S. railroads are becoming increasingly enticed by the potential riches of real estate development. The valuable land beside their tracks or the air rights above them often present more beguiling opportunities for profits than running trains. Union Pacific is building apartments near Los Angeles and a hotel in Las Vegas. Penn Central, which has long earned a fat income from its holdings in midtown Manhattan, recently claimed front rank among builders of housing (9,000 units in 1969).

Last week Illinois Central Industries and the conglomerate Ogden Corp. announced the biggest private urban-development project yet: an office-hotel-apartment-shopping complex in Chicago. Over a period of ten years, the air rights above 104 acres of railroad yards are to be transformed into a $1 billion lakefront city, including new headquarters and a passenger station for the Illinois Central. With 35 million sq. ft. of business and residential space, the completed development would be three times as big as Century City in Los Angeles and more than twice the size of Manhattan's Rockefeller Center.

Partnership on the Plane.

The idea came from Architect Charles Luckman, head of Ogden's development subsidiary, after he was called in to design buildings for a portion of the site. Luckman, Ogden Chairman Ralph Ablon and I.C.I. Chairman William Johnson finally hammered out a partnership deal while flying from Chicago to Manhattan in an Ogden company plane. "We get all the money; they pay all the bills," joked Johnson last week, as he and Luckman divulged the plans. Not quite. Of the project's total cost, Ogden will receive 5% as architects and 2% as a development fee. Ogden will lease and manage the completed buildings.

For Luckman, who broke with professional tradition by merging his own firm with Ogden in 1968, the still unnamed Chicago venture is the pinnacle of a second career. Though trained as an architect (University of Illinois, '31), he became a soap salesman during the Depression and rose to be president of Lever Bros, at 37. He left the company in 1950 after a policy fight and turned to practicing architecture. Many architects struggle ineffectually to influence decisions that determine the surroundings of buildings and the shape of whole neighborhoods or cities. In Chicago, Luckman has reached that coveted goal.