City Planners and Centrum Properties shook hands on two important aspects of their complicated deal for redevelopment of 23 acres that once was home to Montgomery Wards’ complex of office, catalogue and warehouse buildings.
Centrum has won preliminary approval to receive funds from a tax-increment financing district for the residential, retail and office development, called Kingsbury Park, and it has agreed that 20 percent the housing units built north of Chicago Avenue will be affordable.
The development under way on the Near North Side, has been the subject of unusual negotiations because Chicago-based Centrum Properties, along with three partners that include the New York based Angelo-Gordon investment firm, bought the land directly from Wards several years ago. However, the sheer size of the development, planned for 2,000 to 2,500 residential units by several builders over the next few years, caused the project to be subject to city approval.
When the City Council approved the master development last winter, Centrum and city planners were still negotiating several aspects, not the least which was Centrum’s pursuit of TIF funds for the project. In August, the Community Development Commission gave the first needed approval for up to $28.7 million, or 12.9 percent of the project’s $223 million budget, to come from the Chicago/Kingsbury TIF pool. It will be paid out at development benchmarks, according to Robin Schabes, the Department of Planning and Development coordinator who won the CDC approval of the TIF provision. City Council must still give its approval. Among the public benefits promised in exchange for the TIF assistance, according to Schabes, is Centrum’s commitment to build a public Riverwalk and to preserve and reuse more than 1.7 million square feet of warehouse space in the historically significant Catalogue Building. Schabes added that the developer will also improve public rights of way, create jobs, establish a job training and a student internship program, and establish a $250,000 Kingsbury Park Scholarship Foundation, providing high school and college scholarships for neighborhood children.
Among those benefits, will be provision for affordable housing. Centrum has agreed that 20 percent of all residential units built on the portion of Kingsbury Park north of Chicago Avenue will be built as affordable housing. There is no affordable-housing provision for the development south of Chicago.
Currently, that affordable housing agreement applies to Centrum itself, building some 298 units in its Domain Building on Kingsbury at Oak Street, and possibly to Enterprise Development, which bought a triangular site from Centrum at Kingsbury and Larrabee Avenue.
“It means that Centrum and other developers who build residential units on the portion of Kingsbury Park that falls north of Chicago Avenue will meet with city officials and agree to set aside 20 percent of the units planned for their developments as affordable housing,” said Steve Lipe, senior vice president of Centrum Properties.
Ron Shipka Sr., chairman of Enterprise Development, said he is prepared to provide that 20 percent in affordable housing and to meet with city planners, if he decides to build residential units on his triangular site.
“It is still a concept,” explained Centrum’s Lipe, who said other development on that portion of Kingsbury Park is yet to be finalized. “Speaking for our Domain Building, I can tell you that just under 60 units will be offered as affordable. Half of those will be sold to Holsten Real Estate Development Corp. and that company will manage those units while leasing them to the Chicago Housing Authority.”
The arrangement is similar to that in place between Holsten and the CHA for its Holsten’s own nearby 261-unit North Town Village mixed-income community.
“Another 29 units will be sold as affordable units to families earning up to 120 percent of the Chicago area median annual income [$81,480 for a family of four],” Lipe said.
Lipe expects the affordable units will be absorbed from the lower priced Domain Building units. Condos in the Domain Building are base-priced from $159,000 to $250,000. “So far, potential buyers are not concerned about provision of these affordable units and only two buyers have expressed any concern at all,” said Lipe.
“The TIF subsidy will just about cover the cost of developing the Riverwalk and the cost of making these units affordable,” said Lipe.
