CHICAGO — Prudential Plaza’s namesake tenant wants its name and signs taken off the two-tower office complex along Millennium Park, and says the property’s owner needs to write a $10 million check as part of the naming-rights deal.
Prudential Insurance Company of America is suing landlord Sterling Bay in U.S. District Court, saying the Chicago developer is overdue in paying $10 million as part of a deal in which Prudential is walking away from naming rights after 65 years.
Prudential’s latest naming-rights term was set to expire when Sterling Bay and its investment partner, Wanxiang America Real Estate Group, made the $10 million renewal offer, according to the complaint filed Aug. 14.
In a form of naming-rights negotiation that also has been used on high-profile properties such as the former John Hancock Center, New Jersey-based Prudential had the option of paying the amount proposed by Sterling Bay to retain the name, or refusing the offer and receiving the same fee in return for giving up its naming rights.
Sterling Bay made the offer in March and Prudential chose the buyout in April, the complaint said.
Prudential owned the property until 2000. When it sold the complex, the company signed a 10-year naming-rights deal with two five-year extension options, the last of which expired June 20, according to the complaint.
The deadline for Sterling Bay to pay Prudential to take back the name was June 20, and the landlord was sent a default notice June 23, the complaint said.
Prudential’s lawsuit was first reported by Crain’s Chicago Business.
A Sterling Bay spokeswoman and Prudential spokesman declined to comment.
Sterling Bay and its partner, the Chicago-based real estate investment arm of Chinese auto parts manufacturer Wanxiang Group, bought Prudential Plaza for $680 million in 2018.
Sterling Bay markets the property under the name One Two Pru, and the developer has made several changes, including upgrading amenities and replacing almost all of the ground-floor retail.
The naming-rights lawsuit comes as Sterling Bay and other landlords try to overcome overdue rent payments and downsizing tenants because of the coronavirus pandemic, which has left downtown office buildings operating well below their usual capacity since March.
Prudential Plaza tenants include the Chicago Tribune and its parent company, Tribune Publishing. The newspaper company has been in talks to walk away from its approximately 137,000-square-foot space in One Prudential Plaza, the Tribune reported earlier this month.
Prudential Financial is no longer the largest tenant in the complex, where it still maintains an office for its PGIM arm.
Prudential’s signage includes a blue sign atop One Prudential, as well as its Rock of Gibraltar logo carved into the side of the tower, which was completed in 1955 as the Prudential Building. A second tower, connected to the same lobby, was completed in 1990.
The lawsuit seeks payment of the $10 million from Sterling Bay and other costs, as well as the removal of all Prudential signage at the expense of the landlord.
It’s not known whether Sterling Bay has any companies in mind to take over the naming rights.
In a similar situation, the 100-story John Hancock Center lost its longtime name in 2018 when the insurer — whose naming-rights deal had lapsed — demanded the owner of the office space, Chicago developer Hearn Co., remove its name and signs. The skyscraper is now known by its 875 N. Michigan Ave. address while a new naming deal is sought.
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