Next up at Parkside
Project is meant to replace part of Cabrini-Green
02/10/2010 10:00 PM
The Community Development Com-mission gave the green light to the latest phase of the Parkside of Old Town redevelopment on Tuesday.
The project, led by developer Peter Holsten in conjunction with the Chicago Housing Authority, is part of a long-term design to replace an 18-acre portion of the historically troubled Cabrini-Green public housing development — an area bordered roughly by Larrabee, Division, Oak and Orleans — with a collection of mixed-income residences.
Holsten’s redevelopment plans at Cabrini-Green have been socked by the staggering real estate market.
Last month, Crain’s Chicago Business reported that the city doled out $3.4 million in subsidies to Holsten earlier than expected, to insure against a construction loan default for the first phase of the Parkside project, where half of the development’s market rate units remain unsold.
Holsten said he has reduced rates by 25 percent, and intends to launch a new ad campaign to attract buyers. Additionally, he said the building is currently under review for Federal Housing Administration loan approval, an appointment that could allow lenders to offer down payments as low as 3.5 percent for mortgage loans at the development.
The new leg of the project calls for a seven-story rental development at 544 W. Oak. The 112-unit development would be made up of 39 public housing units, 53 units priced affordably and 20 priced at market-rates. The developer plans 1,300 square feet of commercial space on the building’s first floor. Six of the units at the development are slated as townhouses.
The $41.7 million project has a number of potential funding sources: nearly half of the construction costs would be paid for through the sale of federal and state low-income housing tax credits, administered by the Illinois Housing Authority, while twenty percent would be covered by $8.2 million in tax increment financing funds Holsten is requesting from the city.
Additional financing is coming from the U.S. Department of Housing and Urban Development and around $2 million will come from mortgage equity.
Holsten has partnered with the city on a number of other projects, including North Town Village, the first mixed-income redevelopment at Cabrini.
Alderman Walter Burnett (27th) welcomed the new phase at Parkside, with the hopes that the development would bring new life to an area of Cabrini that he recalled as once being an “alcoholics’ row.”
He also praised the use of city subsidies in the project, in what he recognized as a difficult time for the real estate market in any tier.
“We’re very fortunate to have TIFs throughout the city of Chicago to help supplement these developments,” said Burnett, who grew up in Cabrini-Green.
Alongside Holsten’s development firm, the Cabrini-Green Local Advisory Council Community Development Corporation has a 40 percent ownership in the limited partnership arranged for the Parkside project.
The group, made up of Cabrini housing residents, helps steer redevelopment at the former public housing properties. Holsten said the mix makes for a unique planning process.
“They’ve been in the neighborhood a long time, and they have certain ideas on how things should be,” he said.
The Parkside redevelopment coincides with two long-term planning goals in the neighborhood: the Near North Redevelopment Initiative, a master plan unveiled in 1997 that called for the demolition of the Cabrini high rises, and the Cabrini-Green consent decree, a court order requiring a minimum of 700 new public housing units to be built in the redevelopment of the properties. With the completion of Phase II, Parkside of Old Town will have fulfilled 230 of those units, bringing the public housing count at the Cabrini properties up to 525 units, according to Bill Little, the Chicago Housing Authority’s director of development.
The project is expected to create 75 construction jobs and 4 permanent jobs.