Burning the mortgage

CBA Executive Director Terry Murphy talks about paying off the association’s downtown offices

CBA Executive Director Terry Murphy talks about paying off the association’s downtown offices - Photo by Rena Naltsas
By Paul Dailing
Editor

When visitors come through The Chicago Bar Association’s lobby, they are walking through the Terrence M. Murphy Lobby, renamed in late March to honor the longtime CBA executive director.

If CBA President Daniel Kotin had his way, they would have named the whole building after Murphy.

“Terry was the primary driving force behind everything involving the CBA building, from the original concept of the building to the design and construction of the building to the brilliant use of the space for the past 27 years,” said Kotin, a partner at Tomasik Kotin Kasserman. “In all of my years on the executive committee, Terry’s focus has been on all efforts to pay off that mortgage as quickly as possible.”

That will come to pass in January, when the CBA will make the last mortgage payment on its share of the building at 321 S. Plymouth Court it helped construct and has been occupying in since 1991. The CBA will own — outright — two-thirds of the first floor and all of floors two two to seven, plus the mezzanine and basement, paying off an initial loan of $7 million. The John Marshall Law School owns the building’s top eight floors.

The capital campaign Partnership for the Future was in two rounds. The first round was in 1989 and 1990 and raised $5.9 million in pledges, which helped fund the construction of the building. The second, in 2016, raised an additional $160,000, which was used to prepay accruing interest on the mortgage. This membership, coupled with management that was never once late on a payment, just earned the CBA a building.

Chicago Lawyer sat down with Murphy to talk finances, fundraising and the CBA’s next steps. The interview has been edited for length and clarity.

CL: I understand the CBA recently hung a portrait of you in the lobby. Is that an odd feeling?

Murphy: The recognition is wonderful and I was really honored to be recognized for my service. But it’s a little different when you walk in the lobby and you see your portrait hanging above the fireplace. Now, I walk through the rotunda and very often don’t look at the portrait, especially the older I get.

CL: When was the decision made to purchase, rather than rent, a new space?

Murphy: It was in the mid-80s. The CBA was renting at the time. 52,500 square feet at 29 S. LaSalle St. We had a 50-year lease, believe it or not. Our rent was at the phenomenally low rate of about $4.75 or thereabouts per square foot, which was an extraordinary deal for the CBA. The problem is that the lease was expiring. The association had probably been in that location since the late ‘30s or thereabouts. At the end of the lease, the association’s rent would have jumped closer to fair market value. Back then, fair market value would have been $18, $19 maybe a square foot, but if you take a look at 52,000+ square feet and just sort of round it off at about $20 a square foot, you’re well over a million dollars in annual rent. It would have been difficult for the association to maintain the size space it had.

CL: How was the CBA able to arrange the funding?

Murphy: The members have been enormously supportive of the association. Without their help, we couldn’t have done what we did.

CL: What’s next after you make the final payment?

Murphy: Oh, we’re definitely going to have to have a “Burn the Mortgage” Party, don’t you think? (Laughs.)