May 2008 53rd Vision report. 53rd Street. TIF home. TIF Council reports and minutes. Development home. Harper Court home. Harper Ct. RFP. http://hydeparkprogress.blogspot.com/2009/01/developing-in-hyde-park-its-hard-and.html.
From 53rd Street Vision Block Building Exercise Workshop Report-including Draft Report on November 15, 2008 Block Building Workshop Report, 1/12/09
Website of the 53rd St. Vision process: http://secc-chicago.org/secc_chicago/news/news_moreinfo.cfm
(Distributed separately by Irene Sherr January 20, 2009):
Observations [about the November 15 Block Exercise]:
1. Groups only had about 15 - 20 minutes to generate a scenario, test it, revise it etc. before they moved onto the next site.
2. The purpose of the workshop was to generate a quick sense of the rough parameters needed for a viable project. The same model was used for all of the sites.
3. The model and the workshop did not give participants the opportunity to refine a scheme further by varying unit size, program elements, construction costs, sale prices, etc.
4. Harper Court appears to be the site with the greatest potential. The scenarios produced the most promising results there. This may suggest that projects need to be of a certain size to be viable.
5. Successful projects are clearly possible but will mostly likely need more density and/or more subsidy or bigger sites.
6. The community knows a lot more about likely development than it did before, and will be more educated consumers.
7. Developers who participated in the various workshops enjoyed the process and workshops, were impressed favorably by the community and many expressed a desire to pursue development opportunities in Hyde Park .
Next steps: there will be a final report prepared by CMAP that synthesizes the work of the three workshops and comments from developers that were made at the January 12, 2008 meeting.
All documents are available from www.vision53.org. Hyde Park Progress has a recent post about the workshop: http://hydeparkprogress.blogspot.com/2009/01/developing-in-hyde-park-its-hard-and.html.
Irene Sherr, Community Counsel, 5100 S. Hyde Park Blvd., Chicago Il 60615
- 53rd Street is Hyde Park's Downtown
- Exercise: "Which Project Has Greater Density?"
December 8, 2007 Vision Workshop I (used pda's and maps to answer:)
- What can't you do in Hyde Park? (much shopping, entertainment/recreation)
- What do you value in Hyde Park? (community and diversity)
- What should 53rd Street look like? conclusions:
- busy and active
- attractive and inviting
- convenient and easy to get around
Four resultant themes:
- act as a main street
- density supports retail
- walkability and accessibility are essential
- neighborhood character must be expressed
May 3, 2008 Vision Workshop II (breakouts and walk about on existing plus and minus)
Let's learn from the past, esp. mistakes with parking placement and low-rise
Building on strengths--what are these strengths?
Create a vibrant and attractive milieu/destination for residents and visitors
November 15, 2008 Vision Workshop III: Can we achieve our goals with the redevelopment? We played with blocks to find out.
Modeled after the Twin Cities Lisc Corridor Housing Initiative program
CMAP and MPC received training in the program, held a Corridor Development Initiative in the Lawndale neighborhood,
worked with the community to respond to the needs of Hyde Park.
Model Blocks Objectives:
1. Engage in hands on explorative development scenarios
2. Learn about the impact of different uses and densities
3. Understand the tradeoffs in development
4. Cultivate community understanding for viable development
Let's get to work:
- build a concept
- test the concept
- experiment and revise
- test again
- maybe another concept?
- what would it look like?
- let's see some that worked
- discuss with developers regarding the challenges ahead and market considerations
Thanks to (for the whole vision process)
-over 400 participants
-Kenwood and Canter schools (hosts)
- Treasure Island
From the Draft: Block Building Workshop Report [January 12, 2009]
See http://www.Vision53.org. Prepared under Irene Sherr, Community Counsel, and Chicago Department of Planning and Development.
The exercise was held at Kenwood Academy, November 15, 2008 (and was largely attended- facilitators et al are listed at end).
The sites highlighted were: 1. McMobile, E. 53rd St., 2. Dorchester Commons, E. 53rd St;, 3. Harper Court Area, 52rs adn 53rd Harper to Lake Park Ave.
On November 14, 2008 over 125 Hyde Park residents played with wooden blocks and experimented with their own development ideas for three sites along 53rd Street: Dorchester Commons (53rd and Dorchester), the McMobile site (53rd St. across from Nichols Park), and Harper Court and City Parking Lot (Lake Park & 53rd St.). Once a group reached agreement on a concept, Real Estate Advisors tested its viability quickly with a computer based financial model and Design Advisors quickly sketched the concept. Groups then adjusted various project components to create a financially viable scheme. This workshop was the third in a series of interactive workshops designed to help residents develop a vision and recommendations for 53rd street. Additional information about the workshops is available at vision53.org.
This document summarizes eight development schemes from the 22 schemes generated for the three sites. These eight represent what appeared to be the most viable projects.
Workshop organizers utilized data available from current Hyde Park market conditions as the basis for the assumptions in the financial model. The development advisors reviewed the assumptions within the financial model, or proforma, and the model was adjusted based on this input. The same assumptions were utilized for all three sites. It is very important that one keep the following points in mind when considering the information contained in this document.
1. The model is designed to provide participants with a general sense of the cost of development. The model was designed to bemused in a workshop setting and only includes "hard costs" (bricks and mortar) associated with the development.
2. The financial assumption utilized for this exercise are listed on the following page.
3. If this was and actual development project, costs would likely be different (higher or lower) depending upon various factors including, but not limited to: the cost of materials, land acquisition costs, labor costs, construction loans, financing costs and fees, marketing, site remediation, architectural and engineering fees, legal fees and other "soft costs", rate of return to developer, and retail and housing market conditions. The model includes some, but not all of these variables.
4. Developers consider a project's rate of return when they determine whether or not a project is feasible or worth the potential risk. In today's economic climate market rate developers usually expect a minimum of 12-15% return on their investment. Every deal is different and return requirements can vary depending on different project elements. For example, with a larger deal, a developer is more likely to assume a slightly lower rate of return (but still not usually below 15%).
In light of the statements above, please consider the figures on the following pages as "back of the envelope" estimates only. If an actual market rate developer were to took into developing a site there would undoubtedly be a significant number of additional details they would have to consider, which would impact the bottom line.
Assist future development
effort along 53rd and the potential developers by cultivating a community understanding
toward viable development
Land Price (per square foot) $75
Market Sales Price (per square foot) $280
Developer Return 15%
Average Parking Space Area (in square feet) 350
Sale of Parking Spaces $30,000
Rents (average monthly) $2,000
Expense Ratio 35%
Cap Rate 6.75%
Square Feet per Unit 1,360
Closing Costs/Commission 6.0%
First Year Leasing Commission 8.0%
Last 9 Years Leasing Commission 3.0%
Cap Rate 8.0%
Affordable Sales 1 Bedroom $161,500
Affordable Sales 2 Bedroom $188,000
Affordable Sales 3 Bedroom $205,500
Affordable for Sale Construction Costs (per square foot) $185
Rental Construction Costs (per square foot) $180
Condo Construction Costs (per square foot) $190
Retail Construction Costs (per square foot) $150
Underground Parking Construction (per square foot) $115
AFFORDABLE HOUSING IN CHICAGO
Chicago first enacted an inclusionary zoning policy, know as the Affordable Requirements Ordinance, in 2003 and later expanded it in May 2007. Alderman Preckwinkle has made it a practice to require 15% affordable units for non TIF projects throughout the 4th Ward.
According to the City's website, the city-wide policy includes the following conditions:
- Requires that at least 10 percent of the units be affordable in developments built on land purchased from the city.
- The development is a "planned development," except for developments outside of the downtown area that do not obtain density increases
- Requires that 20 percent of the units be affordable in residential developments that receive TIF assistance.
- In for-sale developments, units must be affordable to adn purchased by households with incomes at or below 100 percent of the area median household income.
- In rental developments, units must be affordable to and occupied by households with incomes at or below 60 percent of the area median household income.
- Affordable units are required to remain affordable for 30 years.
- Developers can meet the affordability requirements by providing the affordable units as part of the development project or by paying a $100,000 fee in lieu of each required affordable unit.
COST OF DEVELOPMENT: SITE PROPOSAL FEATURES
[Here are] the better performing development scenarios for our three sites.
Included in the results are"
As you can see, from the above table, none of the schemes resulting from the workshop result in a return expected to be attractive to a private developer. However with some tweaks, like greater density or different ratios of housing and retail, some of these projects could have the potential to provide greater returns. [Harper had the best returns.]
[The following set up is used: Site and scheme s#, uses u, aver. stories st, parking spaces p, total cost of the development in dollars c, eligible TIF dollars uses in dollars TIF, Percent return to developer (profits) r
McMobile 1: u mixed, st 11.5, p 63, c 20.6, TIF 1.9 m, r break even
McMobile 2: u mixed, st 4.5, p 52, c 12.9, TIF 1 m, r break even
McMobile 3: u mixed, st 5, p 70, c 18.9, TIF 718,503 m, r break even
Dorchester 1: u mixed, st 8, p 89, c 21.5 m, TIF none, r 1.1%
Dorchester 2: u mixed, st 8, p 58, c 15.5 m, TIF 534,039 m, r break even
Harper 1: u mixed, st 6, p 223, c 45.2 m, TIF none, r 4.9%
Harper 2: u mixed, st 10, p 419, c 83.6 m, TIF 6.2 m, r 7.8%
Harper 3: u mixed, st 6, p 186, c 38.3 m, TIF 3.1 m, r 2.5%
[ABOUT THE SITES AND PROPOSALS (visit vision53.org to see):] DORCHESTER COMMONS PROPOSALS
1322 E. 53rd St. , 33,000 square feet.
Earlier workshops participants expressed desire to see less strip malls and parking lots, so we chose one to explore redevelopment potential. It is important to note the owner of this site has not expressed any plans or interest in redevelopment.
Total number of scenarios
Number of scenarios that were potentially viable 6; Numbers of scenarios that were not viable: 2
stories 8 av, residential 54,400 sf in 40 units 20% affordable, commercial 28,560 in 21 small stores,
parking spaces 89 in a 5 story garage, 9 stories residential adn 2 retail, cost $21,5 m, no TIF, 1.1% return
HARPER COURT Corner of 53rd and Lake Park, 128,000 square feet
Rationale for the selection:
This site was chosen because both the University of Chicago and the City of Chicago have expressed plans to redevelop this property. A RFQ/RFP for this site has been released.
Total number of scenarios generated: 10, Number of scenarios that were potentially viable: 4 [error: 3], Number of scenarios that were not viable: 6 [error: 7].
[spreads structures relatively evenly]
6 stories, residential
84,320 sf in 62 units 20% affordable, commercial 84,3320 sf in 62 or less
parking 223, cost $45.2 m, no TIF funds, 4.9% return
[concentrates height along Lake Park north end]
10 stories average,
residential 189,598 sf in 114 units 20% affordable, commercial 156,540 sf
in 115 small stores,
419 parking, cost $83.6 m, TIF up to $6.2 m, 7.8% return
[structures fill most of the space 4-5 stories and keeps court, c5 story parking, 6 story mixed at Lake Park and 534d, 15 story residential at north end of Lake Park]
6 story average, residential
63,920 sf in 47 units 25% affordable, commercial 73,440 sf in 54 small stores,
186 paring, cost $38.3 m, return 2.5%.
MCMOBILE SITE 1410 E. 53rd st, 36,000 square feet
Rationale for site
The present owner has expressed interest in redeveloping property in the future
Total number of scenarios generated: 6, Number of scenarios that were potentially viable: 4, number of scenarios that were not viable: 2.
Stories 11.5 average,
residential 59,890 sf in 44 units 20% affordable, commercial 13,600 sf in
63 parking, cost $290.6 m, TIF up to $1.9 m, return break even.
4.5 average stories,
residential 21,760 sf in 16 units 20% affordable, commercial 21,760 sf in
52 parking, cost $12.9 m, TIF to $1 m, return break even.
5 average stories,
residential 43,520 sf in 16 units 20% affordable , commercial23,120 sf in
parking 70, cost $18.2 m, return break even.
Special Thanks To:
Andre Brumfield EDAW
Mark Schewamel, Gensler
Michelle Rademacher, Gensler
Michael Romero, Romero Design Studio
Joanna Trotter, Metropolitan Planning Council
Joanne Howard, Metro Chicago Information Center
Kim Bolton, Metropolitan Planning Council
Lee Deuben, CMAP
Mike Spadafore, Metropolitan Planning Council
Margaret Hyuck, OWL
Stephen Ostrander, CMAP
Real Estate Advisors
Collin McKenna, Related Midwest
Kevin Augustyn, HSA
Fred Bonner, Bonheur Development
Dennis Harder, Joseph Freed & Associates
Jeffrey Greenberger, Brewster Advisors
Ben Ranney, Terra Firma
Lyneir Richardson, General Growth Properties
Peter Holstein, Holstein Development
The 53rd Vision Workshop was sponsored by 4th Ward Alderman Toni Preckwinkle, 53rd Street TIF Advisory Council, City of Chicago Department of Planning and Development, Coalition for Equitable Community Development, Hyde Park Chamber of Commerce, Hyde Park-Kenwood Community Conference, Interfaith Open Communities, the Chicago Metropolitan Agency for Planning, and the South East Chicago Commission.