Number 9 in the Harper chronological series.
This page is provided as a resource and record by the Hyde Park-Kenwood Community Conference, its Preservation-Development-Zoning Committee (chair Gary Ossewaarde), and its website, www.hydepark.org. Writer Gary Ossewaarde. Join the Conference, support our work.
TO SEE THE FULL PRESENTATION IN PDF (25 PAGES) GO TO HTTP://WWW.HPHERALD.COM. Scroll a bit on homepage and click Presentation.
to Harper Court redevelopment home and latest and to subpages.
Previous in series
(#8)- Vermilion presentation February 2010 plus. Next (#9) HPKCC
letters, (#10) July
26 presentation and vote. (July 19, 20 presentations are in the Harper Court
53rd TIF Council meetings reports. 53rd TIF Council home.
Development Hot Topics. Hot home. Hyde Park Development hub home. Site home.
Other News from the July
12 TIF council meeting is in the TIF
Council Meetings page.
JULY 19 AND 20 PRESENTATIONS AND Q&A are reported in Harper Ct. home. Much additional was revealed.
THE DEVELOPER'S ACTUAL PDF POWER POINT PRESENTATION IS IN FOUND IN http://www.hpherald.com
Vermilion: http://www.vermiliondevelopment.com. email@example.com.
Several community/organizations meetings with Vermilion were subsquently held- return to Harper Court redev. Home to find reports.
Site, Massing, Design,
-how the project fits community objectives, key financials, bottom line on request and timetable.
Questions from the Council members and audience
Main presenter David Cocagne,
Vermilion Development (Danville, IL) president. Others presented portions.
This is from notes, by Gary Ossewaarde, Development-Preservation-Zoning chair, HPKCC, compared with PowerPoint printout, and reflect his understanding of what was said.
Sections: (Preliminaries, Project, Design, Retail, Community)
Partners: Project: Vermilion Development, JFJ Development, The Drexel Group LLC
Design: Hartshorne Plunkard Architecture (HPA), Farr Associates
Brokerage: Metro Commercial Real Estate, @properties
Legal Advisory: Shefsky & Froelich Ltd
Chico & Nunes PC
Construction: James McHugh Construction Company, Riteway-Huggins Construction Company, Centaur Co
Financial Advisory: William Blair & Company, The Waterworks Group Inc.
Marketing Team: Delfen Marketing, MacKenzie Brown Design
Market Analysis: Appraisal Research Counselors, TR Mandingo & Company
Vermilion- founded 1992, focuses on transformative campus and community-oriented retail and mixed use projects. Currently working at Urbana, Purdue, UNCar, Indiana State Terra Haute
JFJ- Chicago firm founded in 1994, neighborhood residential and mixed use. Notable: 180 W. Superior, Superior 110, 101 W. Superior, 707 W. Barry. Interiors and architecture
The Drexel Group LLC- Hyde Park based investment adn strategic advisory firm. Public-private partnerships and niche investment for over 30 years. Capital raising experience, debt and equity
COMMUNITY FOCUSED: The project responds to the 53rd Street Vision Workshop and calls for ongoing community engagement
HISTORICALLY SENSITIVE: The project restores the urban fabric.
ACTIONABLE: A logical, phased approach and financing plan that enhances project execution
DESTINATION DRIVEN: A streetscape with retail and entertainment anchors that will create a regional destination
SUSTAINABLE: Sustainable development, for the environment and the community
combined site plan,
below grade parking massing overview,
phase I components ground floor retail and parking incl. temp. lot west of Harper,
expandable structured deck, same highlighting Lake Park entry,
fitness retail at level 3+,
class A office building component,
select flagship hotel with retail, the interior retail and fines's, parking, office
same showing this as a unit,
same with final north and west retail-apartments and all ground floor retail and parking,
phase I plus the completed u shaped retail and apartments east of harper and new retail and apartments west of Harper.
same with parking for condo building highlighted,
same with condo building highlighted,
a retail view concept looking east into 52nd Place,
view of the Office and phase I Lake Park (Hyde Park Bank view included),
view of same with condo building and its parking garage added,
view of the completed phase I and II,
site plan with ground level retail and 52nd Place/Harper Court filled in "will bring 15-15 new businesses...",
restaurant and entertainment focus,
same with office bldg and to north ground floor and 3rd floor fitness highlighted,
same with Harper Ave. retail added,
job creation and minority participation (Construction jobs minimum 5% local: 400-450 Phase I construction, ditto phase II, MBE 24%, WBE 4%,
permanent jobs - 300-350 permanent retail, 125-175 permanent hospitality, local training with partners City Colleges, Black United, Center for Working Families, Cleanslate, aspirational partnership opps- KOCO [Hospitality Bridge added July 19]
tax base impact- property
tax increment $2.1 million annually (over 4,100% increase); retail tax base
increase- $12.5 m annual sales > $1.3 m taxes,
city hotel tax $1.2 million, city/county parking tax $500,000 annually
Project schedule- retail
and office leasing are underway, groundbreaking late 2011, phase I done early
to mid 2013, future phase components independent,
"The project team has and will continue to engage mid-south community groups throughout the development process.
Retail- ground floor 70,000 sf, fitness 45,000 sf
Parking- below grade 278 spaces, structural deck 399 spaces, street 55, grade 31
Commercial office Grade A 150,000 sf
Residential- multifamily apartments 157, condos 204
Hotel 150 rooms
Site and massing
Major changes made
to concepts since February (partly in response to an independent review) include:
More retail orientated along Harper Avenue and the new L-shaped 52nd place and in the hotel,
Reduced square footage of retail mainly came through abandoning planning for a movie theater,
There is an assumption that the Harper Theater building will be redeveloped as a new locale for retail linking and interfacing with 53rd Street;
Changes to the apartments and retail mixes in the second phase west and north building and stress on any mini-boxes on Lake Park and north sid, smaller stores and restaurant-entertainment in the interior and "neighborhood" shopping on the northwest including Park 52 space and adjustments for better integration with expected developments to the north (Note- a concern had been that the development did not face and bleed into 53rd enough and might not be seamless enough with Village Center et al to the north);
Repositioning of parking to place that for retail underground and accessed from 52nd Place and relying less on Lake Park which would be for office, fitness and condo. Non public parking is moved north and out of the office building.
The site can be visualized as five clusters with Harper Avenue and the L-shaped 52nd Place separating or threading these:
Public parking will consist of 278 public spaces (100,000 square feet?) placed underground and accessed off 52nd Street plus 55 street spaces.
The L shaped street and open space will be a 233% increase over the space in the current Harper Court.
Less public parking will be placed in the office building (4 levels) for both phases and will be accessed off Lake Park at the north end of the site and be dispersed westward, with a expandable core deck under the later condo tower.
A large fitness center will be along Lake Park including in the office building floor 3 and will be visible from Lake Park and the Metra and was said to increase eyes on the street.
Efficiency improvements and better squaring with the bank were made to the office building.
Hotel- they are down to three choices of 3rd party, and the hotel will have 8 to 10 stores, c. 150 rooms.
15-20/25 stores are expected in the interior core, which will be more oriented toward Harper Avenue.
Phase II will make the current Park 52 site blend seamlessly along the street and to existing and new west of Harper Avenue with neighborhood-needs retail as well as have residential apartments. These buildings will be courtyard style and parking can be added in Phase II.
Architecture will be seamless between the two phases.
The condo building, late in Phase II, will be twice the height of the office building.
Tenant footage needs and configuration will determine the number of stores.
Being kept in mind is the mandate to improve and grow the larger 53rd St. district and desirability to fit to growth to the north. Harper Theater apparently plays a role in this.
Uses: The interior space is to be a special experience including specialty and unique-experience stores, restaurants and entertainment-- fine and casual and including evening and late night. Fountains and an open air gathering and entertainment venue will be created along the 52nd Place and its extension as "Harper Court" south to 53rd Street.
The outer rim (Lake Park) retail will be marketed to anchor national stores (note- no big box). These will have traditional street signage and storefronts.
Neighborhood stores will be in the northwest interface. Harper Theater will have an important retail component linking to 53rd. Harper becomes again a retail spine.
Request for TIF Funding
How the development and plan fit TIF objectives
Rationale for the TIF (2000):
Aging commercial property (76% of properties over 35 years of age)
Lagging growth in assessment (33% behind comparable-- and much below residential growth)
Below minimum code (over 50%)
Excessive land coverage (especially the parking lot)
Desired (Vision Process, Request for Proposals):
Mixed use development with a range of choices
Retail and entertainment brought together with commercial, institutional in an infill development (cohesive, vibrant)
On site and outside parking demand met
Employment: Jobs (training as well as created), Minority and Women firms inclusion
Clean and attractive environment
How the development corresponds
RFP called for what was asked for in above and in Vision Workshops
105,000 square feet of new retail + 140,000 square feet in restored Harper Theater
Office and hotel
Abundant public space for community activities including 333% increase over the current Court
Catalyst for the 53rd Street Corridor
Parking- 170 public spaces become 333 (more than double) of which 278 are below grade and 55 at street level. The office and hotel are served by other provided parking.
Jobs- construction (up to 500) and permanent (about 300 retail and 125-175 hospitality) targeted to local area. In construction, 28% are targeted to minorities and another 4% to women firms
Reality. The private sector cannot do this alone, including the infrastructure.
Three other projects -- 24-25% paid for by public financing (TIF law allows up to 25% of the cost of a development to come from a TIF)
The owners/developer is asking the 53rd TIF to commit an ultimate $23.4 million (20.5%) over the life of the TIF to the Phase I total cost of $114 million. (Remainder is $77.7) [Much of the following will be filled in with information shared at later meetings or discussion with the developers.]
Two thirds or 15 million of the TIF's contribution comes from the project's generated tax increment. It's leveraged against private investment at 4:1 (vs 3:1 if 25% were asked) for four times total annual taxes generated (averaged $5 million). They said the TIF investment of $23 million pays itself back in new wages, values etc. and their taxes in three years, which they said is the basis for determining what the assessment and increment will rise to.) [Again, details are to be filled in below.]
Why approval and vote to commit over the TIF $23.4 million needs to be done soon ( a special meeting of the TIF for that purpose was announced by chairman Males for July 26, after July 19 committee review). Because a key part is tax credits for issuance of tax exempt bonds from closing on federal designation of the project as Empowerment Zone. Those dollars go away at the end of this year. The TIF grant and approval are needed for city approvals and meeting of benchmarks, in turn needed to get the tax credits. Not directly said, but financing may not be obtainable without the tax credits.
(If this happens, the project starts late 2011 and starts opening 2013 leaving about 10 years for increment during the remainder of the TIF's life. They said that leasing of retail and office space is underway. ) What would be placed is all of Phase I including the hotel.
What's the schedule and what's built? Construction starts late 2011 and starts opening 2013. All of Phase I including the hotel. Leasing is under way.
Is the TIF's contribution debt or equity? A combination. It would be paid off with tax received.
Who will control and own the parking? The developer, which will (alone and using the market) set the prices.
Details of office building. Still 12 stories, height of the bank, including fitness center at third floor and retail at ground.
What about big box? Not enough space for them or for a destination shopping venue.
Reduced retail? From 150,000 to 100,000 (not counting hotel or possibility of Harper Theater). Removed a theater, added retail along Harper and in the hotel.
What's in Phase I? The configuration infrastructure including the center streets and streetscape, the retail except what's in Phase II buildings, the office building, the hotel, fitness center.
Who/what decides what retail? Zoning requirements, the Developer, the city and University as partners with veto rights.
Where does the TIF 23 million come from? 2/3 from the projects' increment-PROVIDED THE DEVELOPMENT IS BUILT. The estimates are in 2015 dollars.
1/3 from current annual flow of TIF funds that will be a locked in obligation of $750,000.
Harper Court will is a class 4 business pd for tax purposes. This project will be assessed as a class 5. The office building is expected to be taxed at $900,000 a year.
How much might be left for other TIF spending priorities including parks, schools, CleanSlate? Are we not putting the whole public money in the developer's hands? The amount is very large. And what happens if another bear kills things after the money is locked up? (Comparison was made with a project in Champaign-- the developers said that was quite different.) A- The city can stop the money if the project is not completed. And there are other backups-- including 60% lease requirement. They expect to have 84% by the end of the year (not said- how much of that is UC's office space).
Follow up: This TIF has two "feet" to which it is committed: those of the school kids and those of CleanSlate. Will enough be left in coffers in the next couple years and then in the out years between increased increment from this project and Antheus' to allow us to fulfill those commitments?
Another- the larger amount coming in annual near the end of the TIF might leave room to do more-- even for bold plans.
What specifically is being asked and where's it coming from? Two million now (current balance is $2.5 million plus $900,000 owed the TIF to be credited next spring. 15 million will be generated by the project. Current annual increment is about $800,000, growing by about 2% annually.
The math is: $3.5 million -2 million now, +8/900,000 of spring money - $750,000.... Amounts in and out were said to be quite close over the life of the TIF but leave a cushion of never less than half a million including for other expenditures.
At this point, Alderman Preckwinkle told project consultant Courtney Poague to bring a year by year balance sheet and what's left for other needs to the July 19 meeting. The developer said they plan to use CleanSlate in the project.
Aren't we giving away a public asset, the parking lot? Ald. Preckwinkle said there can no longer be public parking because the city sold the rights and doesn't manage parking facilities any more. The developer will have to pay for security, and they will have to be competitive.
And the internal streets? Will be private. The developer said that frees the space from many requirements that would not make sense there, and allows closure for special events. Harper Ave. remains public-- and its cost is not in the project.
Why the urgency suddenly announced now? End of the year deadlines for financing. As far as the project goes, there will be lots of meetings. Alderman Preckwinkle reiterated the deadlines and said we've been diddling for nearly two years on Harper Court- and the TIF is 10 years old with little to show-- and the sooner this is done, the more increment.
How can we assure we really get local and MWE hiring? Many questions were asked on this and alleged sorry record in Chicago. The developers gave many specifics on how they would deliver esp. on the construction, private retail being more difficult to control. Pipeline of training from City Colleges and working with many nonprofits came from both the developers and the audience. McHugh has many partnerships and much experience. If requirements are not followed, the city can hold funds back needed to develop or pay off debt and there are reporting requirements- it involves public land. They will bring some specifics to the July 19 meeting.
Affordable rental units: Yes 20% but that's in Phase II. It would be rental at 60-80% of median income and owners 80-100%. Planned are 157 rental units and 204 condos, very much subject to change.
What about businesses needing to be relocated and/or adverse impact? Face to face meetings have started or will. Some of this will be with the University-- which both holds the land lease and is a partner in the development.
Land and assets ownership? Only Phase I land will be owned for now by the developer. All, city or UC, will be conveyed to the developer as milestones are reached.
What about interim parking? No solution yet.