Harper Court Sale controversy I- cached material from 2005- mid March 2006

A service of Hyde Park-Kenwood Community Conference, its Development, Preservation and Zoning Committee and website hydepark.org. Join the Conference and support our work.

Harper Court Sale home (July 2006>). Harper Court Sale 2 (Nov. 2005-March 2006). Cache 3. Cache 4 (mid 2007-2008).

HPKCC and Harper Court. Ideas and Principles for Harper Court Future and RFP. Letters and alt. RFP by Gary Ossewaarde (heavily incorporated into the HCAC Guiding Principles of July 10). Save Harper Court group. June 2006 special Conference Reporter. Harper Court Cache III late 2006-early 2007.History: Harper Court Story. Business Climate. Development. 53rd News & Dev. TIF News home. TIF Maps.

To Index to this page.

Prelude: What people thought of Harper Court in 1992. Herald, August 16, 2006

The board of the foundation must have pondered Harper Court's purpose when it conducted its own study released in October 1992 called "Public attitudes toward Harper Court." Customers were asked their views of Harper Court's stores and their attitudes toward the shopping center in general. Here's what the board found: 72 percent of respondents thought Harper Court has improved over the years, 84 percent thought it had a good mix of shops, 91 percent find the courtyard a nice place to sit and relax, 91 percent feel safe in Harper Court, 93 percent who visit Harper Court also patronize 53rd street stores and almost 95 percent find the center attractive.

 

In November 2005 rumors started that Harper Court Foundation was seeking to sell (and had long been selling as well as consulting confidential stakeholders on a sale.) Soon it was confirmed that a buyer was found and that the shopping center was being turned over to the Harper Court Arts Council, a quasi subsidiary of the Foundation and the Foundation board was in effect becoming the new board of the Arts Council.

An uproar ensued because many in the community felt the original public purpose of the Foundation, to support small and particularly arts-related businesses and services, could not be lightly set aside and was still relevant, and they were suspicious of a plan to get rid of the center and use proceeds for very different arts purposes. Groups were formed, letters sent with serious questions, the Attorney General's office was asked to look into the matter, and eventually the buyer dropped out and the Council--for whatever reasons and pressures--was persuaded to use Request for Proposals process about March 2006, a process since taken over by the city (and Ald. Preckwinkle). The story continues in other pages.

Here:

Timeline through March 13, 2006

Two years or more of board retreats supposedly precedes decision to sell; consults stakeholders who keep the matter confidential. However, Harper Court minutes show active negotiations to sell, including with the University started before the start of 2003 and were quite intense.
January 2003- board votes to sell, forms strategic committee. Appraisal says $4-$5 m.
March 2003- University interested , board notes need to keep under wraps, issue disinformation if necessary. I April 2 members set to meet with Hank Webber, Jo Reizner
By December 2003 the board feels UC stalling, opens to all offers, considering sealed bid process
June 2005 all negotiations with University at an end
November? 2005: Foundation's lawyer brings a buyer to Harper Court
Harper Court Foundation turns over assets (shopping center) to Harper Court Arts Council (HPAC) and a buyer is announced
Jan. Series of reactive letters, editorials on the sale
Feb 2: Neighbors to Save HC spoke to HPKCC board
Feb 9: George Rumsey, George Davis, Carol Bradford, Charles Custer meet with Asst. Atty. Gen. Therese Harris
Feb 10: Letter to Harper Court requesting meeting with them at their convenience
Feb 17: Word that the Arts Council will speak at the March 13 TIF meeting; public letter in Herald
Feb 21: HPKCC Exec. Committee drafts a public response and questions to HCAC, dated Feb. 24
Feb 27: HPKCC letter forwarded to Atty Gen's office with comments, Herald articles
Mar 1: HPKCC letter in Herald, community meetings planned
Mar 8: Ald. Preckwinkle issues major statement, to be major presentation and discussion at the TIF

Mar 13: TIF meeting presentation by HCAC, RFP process formally announced, input requested

 


Overview, early (Dec., January) reactions to news of an impending sale of Harper Court, including testimony on the importance and signification of the Foundation and the Shopping Center

Today's Harper Court for sale? And should/can it be? And what about the transfer to its subsidiary Harper Court Arts Council? (Details on transfer)
For the moment, here is commentary by Gary Ossewaarde, January 2006-and before knowledge of transfer of the Center to Harper Court Arts Council, based partially on discussion among the Hyde Park-Kenwood Community Conference Board, but reflecting on the views of the writer. The themes of all these seems to be community character and identity, of losing a beloved sinew, and of accountability of institutions, particularly those of a public and charitable character. Following is editorials, coverage, and letters as the story unfolded in January, 2006.

To the Editor, Hyde Park Herald, January 11 2006: by Gary Ossewaarde

The advisability and conditions of a sale of Harper Court to a real estate company or developer, particularly non-community, should be very carefully considered and explained to the community before execution of an agreement. At the very least this matter should be presented to and considered by the 53rd Street TIF Advisory Council.

Reasons for concern by myself and many other residents include:

· The public origin and purpose of the Harper Court Foundation and the shopping center, ably described by the Herald (including in the 2004 50th year issue) and in letters to the Herald. (Visit http://www.hydepark.org/historicpres/HarperCourt.htm.) Not least is the 80 percent governmental and 20 percent community resident funding of construction.

· The Foundation is a 501 charitable nonprofit whose purpose must be charitable. Any windfall must be used in accord with its registered purpose (Visit http://www.harpercourt.com/foundation.html.) In this case, any change or expression of purpose needs to be discussed with the community.

· The governance, board selection, and actions of this community-created foundation has been obscure for many years and needs to become transparent before execution of a drastic move such as sale and change in assets to be managed or distributed. The foundation must also be prepared to answer any questions about past or present management issues that may be contributing to sale should some degree of necessity be involved.

· We realize there are structural, conformity, modern retail need, shopping traffic, and financial/lease-type challenges with the center. These need to fully and realistically explained and discussed.

· Our independent small retail base faces increasing challenges in Hyde Park-Kenwood, which was one reason for forming the TIF that Harper Court is sited in. How would sale and possible replacement of the center affect ability of small businesses to enter or remain in Hyde Park and to retail diversity (in ownership as well as goods and services available)? Sale may also pose significant challenges or opportunities to streetscape and parking.

· The center and its configuration were an attempt to do something new with retailing/artisan space. Having passed the City’s rather arbitrary 40-year cutoff age for landmark consideration, the center, should it be sold and significantly changed, may face preservation challenge.

In short, thoughtful consideration and discussion are needed before a major status change is made to such an important part of our commercial district, one with deep community roots and public purpose.

____________________________________________

To the Hyde Park Herald, January 11, 2006. by Dr. Tom Wake, Hyde Park Animal Clinic

I would like to congratulate the Herald on the temperate tone of its editorial in the Jan. 4 issue. As one of the parties with most personally at stake in the future of Harper Court, it is my hope that reason and civility will be how we remember our discussions going forward. In that light, I would like to share some thoughts about doing business in Hyde Park for the past 25 years.

I called Mr. David Rattner at JDI Realty LLC last week to welcome him to the neighborhood. I did this expressly because 24 years ago when Marcia and I bought Dr. Kostecki's practice, no one from the Harper Court Foundation or any other neighborhood group extended that courtesy to us. It was a chilling experience.

We were about to dedicate 30 plus years of our professional life to a neighborhood. And when Dr. Kostecki suggested I call the president of the Harper Court Foundation, she told me to never telephone her again.

Mr. Rattner and his associates are businessmen interested in developing and under-developed and neglected property. The manner of their entering the community is the result of the Harper Court's historic secretive and insensitive procedures. As such, JDI should not be tarred with that same brush and deserves a fair hearing from the community.

The end of Harper Court has put me in a very elegiac mood. Hyde Park Animal Clinic is one of the two original tenants still here, and we are the second occupiers of the position of neighborhood veterinarian in this location. When we purchased the practice, this rolling stone knew for the first time where he would be in 30 years and that this was bemusing then and still is. I must say that I have nothing but gratitude for t he opportunity to be of service to this community.

Much of my professional and personal growth has occurred with your help and I cannot express the depth of my appreciation. I have known some of the finest people in this world and it has been humbling to know that I have received their friendship and respect.

When I accepted the responsibility of the Hyde Park Animal Clinic I knew that our job was to be the best that we could be, to develop our clinic to its highest potential consistent with the philosophies of our clients, and to make sure that when it was time for us to move on we left the neighborhood with successors in whom we could take pride.

Our philosophy has been to be a neighborhood practice, respecting all who choose to come here irrespective of their economic or social class and to appreciate that different people have different philosophies about their status as caretakers to their pets. It has been a pleasant dynamic tension to be true to that philosophy.

My last service to this community, hopefully a few years from now, is to find associates with a similar philosophy and pass this responsibility on to them. The current situation puts all of this in jeopardy. I cannot attract talent with no clear idea where this community wants their veterinarian to be located. I cannot minister to my low-income clients if there is new construction with rents that reflect the economic needs of the cost of t his land and new construction. I could certainly follow the example of my colleagues who cater to a higher end clientele and charge accordingly, but this would change everything that Marcia and I have believed and pursued for 25 years.

As other business owners in Hyde Park have discovered, I could move from the area and have no trouble establishing myself in a new area. This would be a violation of the unspoken covenant I made to this community 25 years ago I want this community to know that we take our responsibility to you most seriously and that if there is any want that we can continue in this neighborhood short of denying our responsibilities to our families that we are committed to do so. Top

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Editorial from the January 4, 2006 Hyde Park Herald

"Harper Court is a remarkable example of community participation. The project was conceived and developed by community people, from beginning to end." - Hyde Park Herald, Aug. 4, 1965

The Herald is quoting its own editorial from Aug. 4, 2965 as a reminder to the Harper Court Foundation not to forget its past. We feel this is important in light of recent news that the foundation may sell the 40-year-old shopping plaza to Loop-based JDI Realty LLC.

Considering Harper Court's history it is amazing that the foundation board would sell the project without any public discussion. Harper court was born out of community need and with much public support and discussion. The current board of the foundation has an obligation to respect that history.

The destruction of much of Hyde Park's business community under Urban Renewal in the 1950s eventually led to the creation of Harper Court as a community effort. As Urban Renewal ended up rezoning 80 percent of the area's business districts to residential, more than 600 small businesses were displaced. And those who wished to stay were faced with increasing rents.

Prominent members of the community created the Harper Court Foundation to find a location in Hyde Park for small, independent local entrepreneurs and artisans. Muriel Beadle, wife of then U. of C. President George Beadle, served as Harper Court Foundation's first chairperson.

The Foundation then raised the $600,000 to construct Harper Court: 80 percent came from a federal small business mortgage and 20 percent, or $120,000, came from the Hyde Park community in the form of $100 bonds. Hundreds of Hyde Parkers bought those $100 bonds. Harper Court was successful enough that after 25 years the bonds were paid off. The plaza was built and opened in 1965.

Today Harper Court is home to some long-standing, independent businesses, including a veterinarian, toy store, record store and artisan's cooperative. The original concept, in which the upper level, commercial businesses would support the smaller, independent businesses underneath, still exists to some extent. A few popular restaurants draw a regular crowd and the opening of the new Checkerboard Lounge is expected to add some flare to the area's nightlife.

Now we are reporting that the shopping center may be sold to an outside developer. Both Harper Court's Executive Director Leslie Cole-Morgan and current president Paula Jones have refused to discuss the sale. Yet they have a responsibility to inform the community.

It is puzzling that a major decision has been made regarding something that was created publicly, and no one will talk about it. For 40 years the spirit of small business has found a home in Harper Court and now that future is in jeopardy.

Why are you selling it? What goes in its place? What happens to the merchants and services they provide? And what do you plan to do with the money you receive?

The Hyde Park community is entitled to answers to those questions before any deal to sell Harper Court is signed.

_____________________

Charles G. Staples wrote in the same issue,

The news emanating from Hyde Park's unique and valued Harper Court has been distressing, to say the least. Suddenly our community is confronted with the likelihood that this landmark haven for artisan and small businesses will be sold off to an impersonal real estate developer whose plans have not been revealed.

Presumably the company would be at liberty to evict the present tenants, then alter or demolish the complex in favor of an upscale development. This must not be allowed to happen! The facility should be accorded landmark protection.

Lest local residents are unaware or have forgotten, Harper Court played a noble role in the community's history. In the 1960s, during redevelopment days, many small business owners and local artisans were being dispossessed, unable to afford the new upscale facilities.

A group of concerned citizens founded the Harper Court Foundation, dedicated to building an attractive and affordable shopping complex. Joan and I were among dozens of neighbors who subscribed to this effort by the purchase of bonds to enable the realization of this dream. The effort proved successful, and in due time the bonds were paid off.

Sadly, those who subsequently operated and managed Harper Court seem to have gradually lost touch with the community. This became apparent a few years ago when the long-standing tradition of chess-playing on the plaza was abruptly driven out.

Now the foundation appears ready to throw the whole enterprise overboard. This happening, and other events such as the sale of University Bank to a consortium, is threatening to strip Hyde Park of its valued identity. The community must have a say in the matter of Harper Court, which we had believed to be an important community institution.

_____________________

Artist Rob Borja writing in the same issue emphasizes a different note, that of founders' and continuing purpose. [Note: The University owns only leasehold in the former Women's Workout World structure in Harper Court. A University officer does sit on the Foundation board.]

The character of our community is reflected in its many institutions. Places of learning, worship, social concerns, commerce and recreations are sinews of the body we identify with as important to us.

Harper Court has been and is and integral part of Hyde Park. Muriel Beadle spearheaded this unique not-for-profit contribution for the retention of a special place for the arts. The loss of the 57th Street Art Colony was thus compensated for. We are all grateful that the University of Chicago has overseen its survival from the inception.

The tenants have slowly amended the original thrust of Harper Court artists and art shops have come and gone. But among the survivors is Artisans 21.

Artisans 21 serves as a gallery owned and run by the artists themselves. It is a window to what is happening in contemporary arts and crafts. It has been important to we artists/artisans and most nearly reflects the wishes of the founders of Harper Court. Artisans 21 celebrates its 30th anniversary in 2006.

We artists are sincere contributors to the well-being of Hyde Park. Therefore, we are especially concerned that rumors suggest that the university's commitment to Harper Court could be conditional.

Harper Court should not now be considered merely a commercial venture. Other university real estate is conventional investments. Harper Court is something more than that to Hyde Park and the city. The roster of visitors to Artisans 21 extends to the far reaches of the United States.


Ron Bauer January 11 thought the Court has much explaining to do

I find it appalling that the Harper court Foundation is contemplating the sale of the complex. According to its website, "The primary objective of the Harper Court Foundation ...includes helping to promote the economic development of Hyde Park-Kenwood."

This raises a number of questions. For example, how will the sale promote that objective? What does the foundation proposes to do with the money? will any member of the foundation profit personally from a sale? If the foundation is a not-for-profit organization, does it have any public accountability as a matter of law? Might there be a basis for an investigation by the attorney general, given what appears to be a chronic lack of responsiveness to the community?

I don't know what remedies we have, but I strongly believe that the foundation has a lot of explaining to do.

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On the transfer to Harper Court Arts Council

Question: if the Foundation dissolved the Arts Council after transfer of the Center and until after the sale, who controls and owns the Center; and is a non-profit organization without a board legal?

Beyond the letter of intent to sell to JDI, the Harper Court Foundation apparently transferred the Center on December 8 via quit-claim to the Harper Court Arts Council, a subsidiary created by the Foundation in 1990 to serve as 501(c)3 for, inter alia, the Community Art Fair, upon the latter's exit from Hyde Park-Kenwood Community Conference. The new Council has a mission statement much more closely related to arts than the Foundation (which was thought by Council founders to have strayed from that part of original concept and become a real estate operation after the Center was built--and then to have largely hid from the community and its tenants for years with short-lived exceptions). Also, it currently has no officers (terms having expired last fall) and no executive director and certainly no experience running a commercial area. All of this, and the impending sale, may interest the state. It's conceivable also that there could be collateral damage to the Community Art Fair.

Herald coverage January 11, 2006: Harper Court Arts Council takes over. By Tedd Carrison and Nykeya Woods:

The Harper Court Foundation transferred ownership of it 40-year-old shopping center to another non-profit in December, according to the office of the Cook County Recorder of Deeds, which released records this week.

The Harper Court Arts Council, a younger and smaller 501c3 non-profit, working out of the same office s the foundation at 5211 S. Harper Ave. obtained the property in a quit claim deed filed Dec. 8, 2005. This occurred four days before Harper Court Foundation Board President Paula Jones told the Herald that there was "conversation" about her organization selling the shopping center but no deal had been struck.

The recent property transfer and an announcement last month that a downtown realty investment company intends to buy the complex has raised legal questions about how a non-profit can be sold and to whom the proceeds must go.

The Illinois Attorney General's office is charged with regulating non-profits organizations throughout the state and typically oversees their sale. On Jan. 6, Gail O'Connor, a spokeswoman for the Attorney General, told the Herald, "We were not aware of the pending sale and we will be reviewing documents sent to our office."

Assistant Attorney General Therese Harris of the Charitable Trusts Bureau said that generally a charitable non-profit must extend all proceeds of a sale to the mission of its organization. She said she was unfamiliar with the Harper Court Foundation and its arts council and therefore could not comment specifically about their responsibilities last week.

In December, JDI Realty LLC, a downtown realty firm, expressed interest in buying the Harper Court Shopping Center but its intentions are still unknown. JDI Senior Vice President David Rattner declined comment pending the closing of the deal.

Calls to Paula Jones went unanswered at Herald presstime.

According to public records, the Harper Court Arts Council started in 1990 by a small group of Hyde Park and Kenwood residents. The Harper Court Foundation started in 1965, also through the work of local residents, as a means for artists and small businesses to remain in the neighborhood after the commercial restructuring of Urban Renewal threatened to push them out.

Harper Court Arts Council member Dori Ellis said her group was created to promote the arts," Ellis said. "Somehow along the line with the completion [of Harper Court] it became apparent that they had become a part of the real estate business."

She said the arts council has had no officers since last November as their terms expired and the election process will not resume until after the sale, per Harper Court's direction. She said the property transfer required the arts council's approval, however. The identity of a signatory on quit claim deed labeled "managing director" of the arts council could not be confirmed by Herald presstime. Ellis said the council has never had a managing director and the last council president was Barbara O'Connor.

Ellis, also an Artisan 21 cooperative member, said her real concern is the future of the court. She does not know what, if anything the possible new owner will do to the complex.

"It's shaky. Who knows what's going to happen us us. [JDI Realty] has not told anyone what [it]wants to do with the place."

She said at this pont, because there has been no exchange of money the only thing the tenants can do is sit and wait.

Tom Wake has a veterinary practice in Harper Court. "Someone set this up with the best of intentions and now it took on a life of its own" he said of the shopping center. "We have no idea what it is."

University of Chicago Director of Neighborhood Relations Duel Richardson sits on the Harper Court Foundation board* but deferred all questions to Paula Jones.

*In what capacity is uncertain to this writer, his name is not on any filed lists.

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Opposition builds: coverage, demands, more letters, Nancy Stanek, Alderman Preckwinkle's initial comments

Hyde Park Herald, January 18, 2006. By Tedd Carrison

Hyde Parkers have a right to know:

  • Who are the directors of Harper Court Foundation?
  • Who are the directors of the Harper Court Arts Council?
  • What is the incorporated purpose of each organization?
  • If the foundation sells Harper Court, what do they plan to do with the money?
  • Do they have the right to sell Harper Court?
  • What is to happen to the Harper Court merchants and service providers?

Critics fight to save Harper Court

A group of Hyde Park residents are seeking help from Illinois Attorney General Lisa Madigan's office this week after being "alarmed" by the pending sale of the non-profit Harper Court Shopping Center.

The Neighbors to Save Harper Court formed Jan. 8 as a "loose network" to prevent Harper Court's small businesses from being pushed out as a result of the sale, said member Hannah Frisch.

Las month, JDI Realty, a downtown, for-profit realty investment company, signed a letter of intent to purchase Harper Court. Because of "contractual restrictions," JDI Senior Vice-President David Ratner has been reluctant to discuss his plans for the site before the deal is closed.

At a public meeting Jan. 9, Ald. Toni Preckwinkle (4th) told residents that she had spoken with representatives from JDI who did not express an interest in making any sudden changes.

" I have met with the people who are doing their due diligence. In the process of their due diligence and intent to purchase Harper Court, they say they are 'buy and hold' people and they do not have plans to make changes in Harper Court over the next several years," said Preckwinkle. "Since I didn't have any experience with them before and don't know them, I can only report to you what they said."

Some residents are skeptical, however. Sonya Csaszar has been a resident of Hyde Park for nearly 39 years and is now a member of the Neighbors to save Harper Court group. "I am afraid that the person who is going to buy [Harper Court] is going to raze it and put up another high-rise, which we don't need in dense Hyde Park," said Csaszar.

She said she became "enamored" of the shopping center when she first moved to Chicago from Chile but she feels that it has lost much of its appeal and consequently, business. Now, her group has drawn up a petition that it intends to submit to Preckwinkle, pleading for preservation of t he 40-year-old shopping center.

Preckwinkle declined to comment about the pending sale until it its final.

Residents my contact the Neighbors to Save Harper Court via e-mail at saveharpercourt-subscribe@yahoogroups.com.

Nancy Stanek wrote the Herald Feb. 8 that new ownership brings a possibility of improvement over the present "nonprofit" manager, regardless of process. Stanek is owner of Toys Etcetera in Harper Court and stores in other parts of the city.

I have followed Harper Court since its inception--first living as a student a block away as it was being built nd them later operating a business in and around Harper Court for going on 30 years now.

Unlike those who have written letters bemoaning the fate of Harper Court, I for one welcome the change.

What exactly is the change? I really don't know. What I do know is that for the first time the the court may well be run by a for-profit real estate outfit that acknowledges it is in the business of operating a commercial shopping center rather than a non-profit foundation that defines its mission as "promoting the art and culture of Hyde Park."

Don't get me wrong, I'm all for art and culture: that's why I choose to live in Hyde Park. but art and culture are not exactly what's in shortage here.

What's lacking are down-to earth, practical, day-to-day living commodities--decent clothes, whole foods , home building materials, sewing supplies, bed linens, etc. These sorts of things you find at retail stores, most of which don't exist in Hyde Park.

The fact that Harper Court stands to be turned over to a realtor who plans to fill up the spaces with credible retail stores has given me a glimmer of hope.

Rather than shutter my door which I was planning, I have decided to give this new ownership the benefit of the doubt and extend Toys et Cetera's lease for a year. I surely wish that the good folks of Hyde Park would do likewise.

P. S. How do you "Save Harper Court"? Shopping here would be a good start. Going to my Lincoln Park store to tell the folks there that "Nancy simply can't close Hyde Park" is not just "blowing in the wind" but indicative of the retail problem we face here.

Richard Gill, as part of a larger discussion of the retail crisis in Hyde Park, also points to Harper Court's management being non-profit (like the Co-op's ) as part of the problem. More of this vigorous discussion is in Business Climate page.) A devil's counter-argument to the following may be that any kind of retail renaissance in Hyde Park is unlikely due to changed retail (and retailer) habits, land costs etc. and that not having a renaissance is as unlikely to effect neighborhood quality and University success that the neighborhood depends on as would having said renaissance.

I'd like to compliment Tedd Carrison's two articles about the Harper Court issue (Herald, Jan. 25). The articles were very helpful in explaining a confusing situation.

Significantly, the same edition contained another article about our local retail scene. "Chamber seeks to stem further loss of business's." There's been a lot said about Hyde Park's retailing "problem" lately.

The "problem" is not about to go away. It won't go away, because Hyde Park's two largest retailing installations, Harper /Court and the Hyde Park Co-op Markets are not for-profit institutions.

OKL, so these are supposedly woven into the fabric of Hyde Park's unique character . More hand-wringing about preserving that character won't help; the neighborhood's attractive uniqueness is ultimately bound up in the presence of the University of Chicago. That won't be threatened by getting good, for-profit major retailers into the community.

Here are my suggestions:
1). Shut down the Hyde Park Co-op Markets (yes, the main store). The Co-op has had plenty of time to try to turn itself around. More than anything else, the insistence on "saving" the Co-op sends a message that Hyde Park is a bad business environment. If the Co-op stays, we can probably forget about a retailing renaissance in the neighborhood. The Co-op's very presence is a deterrent.

2. Allow the construction of a different kind of retail place at the Hyde Park Shopping Center--something that successful for-profit retailers can live with. This may require construction, perhaps a two-story supermarket. Retailers have proven that bi-level supermarkets in urban environments are possible (for example, the Jewel at Wabash Street and Roosevelt Road). Anyway, what's so great about the present Hyde Park Shopping Center? It's a strip mall.

3. Hold the Hyde Park Chamber of Commerce's Feb. 9 retailing meeting somewhere other than at the Co-op. Move it out of that sam, old non-profit environment. Yes, meet with existing Hyde Park retailers to try to stem the flow out of the community. But inner focus isn't enough; it's especially important to find out what it will take to bring new retailers in.

Neighborhood-preserving commercial design and the profit motive are not mutually exclusive. Hyde Park can have both. But first it must join the world.

Hans Morsbach says Harper Court should remain Harper Court despite mismanagement and mistreatment of tenants.

...all of the schemes I've been hearing about would be worse for the neighborhood than the status quo. Harper Court was intended to fill the void left in the neighborhood when the beautiful 57th Street Arcades, which house artisans, was "urban renewed" into oblivion. Unfortunately, Harper Court failed to attract artisans. Harper Court drifted into a retail commercial property [with worthwhile restaurants and specialty stores]...

Harper Court was plagued by generally disastrous administration (although there were some periods that were a bit better). Tenants suffered a lot. Construction was done on a relatively low budget, requiring much maintenance.

The question now arises what to do with the land occupied by this fully paid-for asset. Given the nature of our free market economy, a high-rise seems likely. Will the Hyde Park community be served well by adding to the housing stock? I do not think so. Moreover, a large new construction project will cause congestion, and who wants that? Parking is tight now and why add to the housing stock?

Harper Court is a nice area and a fun place to hang out (it was even more so back when you were allowed to play chess there). It's useful as a site for the farmers' market, and I believe it should stay as it is. Some tenants are valuable and should be given a chance to remain.

I suspect that the Harper Court Foundation (or whatever entity owns the place) finds it difficult to manage the shopping center, a solution might be to turn it over to a commercial management. Over the years commercial agents were employed, but somehow it never worked out well.

The board of directors may be burned out an wish to be rid of the responsibility of making Harper Court a viable operation. How much nicer it would be for the directors (whoever they may be) if their sole function were simply to give away the money, which is a very enjoyable pastime. However, that scenario would not serve the community very well. Moreover, it would betray the local citizens who funded the development for another purpose.

I think the Harper Court should remain Harper Court. Given the question of ownership, it should not be difficult to undo the sales contract...

John Bowen says HC was publicly underwritten in order to survive and serve a community purpose

The uncertain future of Harper Court is of special significance to me because I began my career there 37 years ago. From 1969 to 1975 I was a guitar repairman at The Fret Shop...This small folk instrument store was iconic of what Harper Court was founded to nurture--an artistic enterprise that would have had trouble surviving in a normally competitive rental market.

This and other businesses in Harper Court have come and gone, but taken together they have offered our neighborhood a diversity of culture and opportunity unlikely to flourish outside a protected setting.

The squandering of Harper Court by its proposed sale to a developer reminds me of the pillaging of the Harding Museum by its trustees some years ago. Neither the Harding Museum nor Harper Court were intended to be profitable; they were community resources established to give us experiences that, like t he live performance of classical music, must be publicly underwritten in order to survive.

Hyde Park of all communities should understand that such institutions are worthwhile, and should encourage their preservation.

Charles F. Custer seeks to fill in facts missing in the Herald editorials.

...I gather that it [HC] has a self-perpetuating board and no shareholders, which is not unusual in the NFP world. The foundation's Illinois charter sets forth the foundation's purposes...to 'further trade and economic development of (Hyde Park-Kenwood) and promote ...business concerns including small business...'

This was some 40 years ago, during which period the shopping center has been about what it was supposed to be to be, and doing--so far as the community knows--be a hospitable landlord to small, local businesses.

this benign adherence to the dictates of the foundation's charter seems to have been maintained, until now, despite the foundation having organized in 1990, "something called the Harper Court Arts Council." Its corporate-charitable purposes are reasonable enough, but they have little to do with those of the foundation. Was that legal? I dunno, but it looks squishy. (That's a legal term meaning "squishy.")

And then, we are told, (a) in December of 2005 the foundation transferred ownership of the shopping center to the arts council board... and (b) even more recently "the foundati8on dissolved the arts council board..and intends to control (the property) until after the pending sale closes."

To any extent that this field of mystery is factual, it is one through which a not-for-profit lawyer, or six, could have a glorious romp.

  • Corporations have directors. Who are they?
  • Corporate boards have meetings and keep minutes. Where are they, and what do they say?
  • Corporations maintain financially records which, normally, are audited on an annual basis and approved by the board.
  • Is it legal for a NFP to sell its assets to a for-profit entity?
  • If so, what must the NFP do with the proceeds?
  • Who shall see that the foundation's charter requirements for distribution of the sale proceeds, [and] if the sale is legal, are adhered to?
  • As to the last point, the Illinois Attorney General is charged with ultimate responsibility. However, she has a lot on her plate; and only at its peril would the community rely exclusively upon her good offices. Even if we are only talking about six million dollars of community assets.

Some others have severely criticized the criticism and coverage of the Harper Court organizations. For example, Lauren Alspaugh, former Director of the Chamber of Commerce, accused the Herald and community organizations of failing to engage each other to find common ground, delving into what's not their business or should be kept secret until the criticized are "ready to make it public," and of "making people feel [in]secure about their community and its leadership."

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Herald editorial, January 18, 2006: Harper Court foundation leaders owe Hyde Park an explanation

Last week's Herald reported that the Harper Court Foundation had transferred the ownership of Harper Court to the Harper Court Arts Council, an apparently dormant group formed in 1990 and located in the office of the foundation.

Like everything having to do with the proposed sale of Harper Court to a real estate development firm, there is no public explanation of what the not-for-profit Harper Court Foundation board is doing and why. No Harper Court foundation person will explain to the Herald or the community what the foundation is doing.

The Herald was able to locate a member o the Arts Council, Dorri Ellis. She said that the Arts council had no officers at the moment. It apparently has no activities now. Ellis told the Herald that the premise of Harper Court was to promote the arts and that in effect it had lost its way with the completion of the building of the center and "had become part of the real estate business."

This is a profound misunderstanding of the origins of Harper Court. It was from its very start in the real estate business. Its very purpose was to provide commercial space in Hyde Park. The Urban Renewal plan of the 1960s was going to take down most of the commercial space on 55th and 57th streets and old Lake Park Avenue. Hyde Park would be losing all kinds of merchants such as restaurants, specialty gift shops, artisans and bookstores.

Knowing that the new commercial space would be created in the Urban Renewal planning would be very expensive, a group of Hyde Parkers, led by Muriel Beadle, the wife of the president of the University of Chicago, set about creating Harper Court as a way to keep such stores and services in the neighborhood. With a combination of inexpensive public and private financing, they were able to create Harper Court with modest rents.

Last week the Herald printed a wonderful letter from Dr. Tom Wake of the Hyde Park Animal Clinic, a tenant in Harper Court. Dr. Wake, who has practiced here for 25 years, wrote beautifully of his commitment to the neighborhood.

Hyde Park Animal Clinic was one of the original tenants in Harper Court. The history is most interesting. The Harper Court founders, unlike the present board of the foundation , talked a great deal to the community. One of the questions they asked as they developed the plan for Harper Court was, in addition to the business and services being lost, what services did Hyde Park lack that people thought were needed. At the top of the list was a veterinarian. And so about 40 years ago they set out to find one who would be willing to move to Hyde Park. They found Dr. Kostecki whom Dr. Wake succeeded in January 1981.

Yes, indeed, Harper Court was and is in the real estate business.

The Harper Court Foundation needs to explain itself.

 

Letter to the Herald, January 18, 2006. by Phyllis M. Kittel

I want to publicly thank Tom Wake for his elegy/eulogy for Harper Court. ...Tom's tone illustrates the best aspects of his philosophy and of the Hyde Park/Kenwood neighborhood community. ..His clinic exemplifies the deep community roots and public purpose of Harper Court. It will be a sad day if Harper Court displaces community enterprises like the Hyde Park Animal Clinic. I hope Tom's letter is truly not a eulogy for all the good businesses and folks who work there.

Letter to the Herald, January 25, 2006. by Grace Wolf (who managed Harper Court 1977-79.) A retail context

In the last few years, there's been a lot of talk in Hyde Park about attracting new stores to the neighborhood. Some people fantasize about Whole Foods, Trader Joe's.... Most of these retailers have no interest in a neighborhood of this size with severe parking problems.

I would like to see more retail businesses and more varied ones here, too, but I think our first priority had better be to preserve what we already have.

For the 40 years that I have lived in Hyde Park, Harper Court has been a key retail center. Quality of life here would be considerably worse without Hyde Park Animal Clinic, Toys Etc., Artisans 21, Plants Alive and the other stores and restaurants in Harper Court.

Harper Court was founded to provide subsidized rents to artisans and small businesses, subsidized by a few larger tenants, like restaurants, paying market-rate rents. I think it's shameful for the Harper Court Foundation to slough off its responsibilities by selling Harper Court to a for-profit realtor.

Our community needs the businesses there now. We don't need to bring in a developer who pays a large sum for the right to rebuild Harper Court and replace the current tenant with businesses that can afford to pay significantly higher rents required by the purchase price and construction costs.

How can the board of the Harper Court Foundation justify this? It's not as though they have an obligation to maximize profits to shareholders. They have a duty to the community. Selling Harper Court to a developer does not fulfill that duty.

I hope we can find a way to preserve Harper Court and its present tenants. More than 25 years ago, I suggested to the board of the Harper Court Foundation that they consider a way to transfer ownership to the tenants. A storeowners' cooperative like Kimbark Plaza or perhaps a condominium would seem to be a better long-term solution for this vital community asset.

Another by Therese allen-Vassar.

I have watched with some concern as small, independent businesses close in Hyde Park. In 18 years as a resident, I've not seen so many empty retail locations.

I am saddened to hear that Harper Court might close and be sold off to a real-estate developer, which I fear may further depersonalize Hyde Park as a neighborhood in its own right. In years past, I bought...Now I hear that 57th Street Books in in trouble, Toys etc. can't make enough money, ..Cohn & Stern...Just another reason to leave the community for shopping and services . Everyone leaving, in turn, makes the community less of a cohesive neighborhood..

Change is inevitable.. However, I hope that we can preserve a place for small businesses and the Farmer's Market and meeting and greeting in Hyde Park. Independent businesses and services preserve the character of our community.

Polly Boyajian, former business owner, says stop the sale, period, and have a community forum with the owners.

Leon Despres, former alderman, says "I am sorry to have the original purpose skewed and I am worried what the new purpose is going to be."

On the other hand, Gregor Sosnowski ask what's the charm in Harper Court. We're preserving a status quo that leaves a great deal to be desired. This, and that a stuck in the mud attitude about change and retail change in Hyde Park is leading to a boarded-up community is echoed by Denise Verret.

Sarah Diwan of Baby PhD in Harper Court says the choice is up to us--shop in Hyde Park if you want more businesses to come. She said she is neutral on the sale--if someone will fix up the court, it could be good.

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The January 25 Herald reported that at least two of three contacted persons listed on the Arts Council's 1990 filing of incorporation as directors did not remember so serving. No recent list of directors is available. Both of those who denied serving on the Arts Council were active with the Foundation.

Another, Helga Sinaiko, listed in 1990 as president but not at present active in either organization, said much of the present controversy is unfounded and the two boards always collaborated. She also said that in 1990 a main purpose for establishing the Council was to use the money some original bondholders wanted to go arts use and to apply for grants for the arts. She added that there is too much brouhaha and it can be worked out. "I want to ensure that the community understands that the arts council was created for the purpose that was the mission when Harper Court was created, which is in some way to support the arts community. It was t he displacement of those people during Urban Renewal that triggered the foundation and the arts council." (However, although this was certainly a chief sentiment behind Harper Court--see Harper Court Story page, this is not what is on the incorporation statement of either organization.)

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Herald major editorial February 1, 2006

In complete secrecy, a very small group of Hyde Parkers is engaged in a fundamental change to part of the Hyde Park landscape. Their action is in defiance of the traditions of Hyde Park and the history of the very institution of which they were supposed to be caretakers and guardians.

This secretive group, whose complete membership is unknown, propose to sell the Harper Court Shopping Center to a private developer who will be free to do anything he wants, including kick out the merchants and tear it all down when he figures out how to maximize his investment.

And once again Hyde Park will be bereft of the small businesses, small services, artisans’ goods and restaurants Harper Court was built to provide the community. Harper Court was created 40 years ago by the community itself, when it became clear that the Urban Renewal plan would leave Hyde Park with none of the moderate retail and commercial space necessary for this kind of tenant. Such space previously could be found in old buildings to be demolished on 57th, 55th, 51st and 47th streets.

Muriel Beadle, wife of the then president of the University of Chicago, first headed the Harper Court Foundation. She led a board of directors comprising community activists who held meetings and did public surveys of Hyde Park to find out what the community wanted. They then raised $120,000 from about 500 Hyde Parkers through the sale of Harper Court Bonds and got a mortgage from the Small Business Administration of the federal government. The bonds and the mortgage were paid off about 15 years ago. The Harper Court Foundation may today be debt free. And what it owns is very valuable.

After its successful completion, Beadle wrote about the effort to create Harper Court. They had “to persuade 20 or more merchants to sign leases for non-existent shop space whose completion date we could only guess at; have the leases ready at precisely the same time that we acquired the land; said acquisition to involve four city agencies and one federal bureau; raise enough money, again within the same time span, to pay for the land which we might not get and whose price we didn’t know; [and] construct the buildings, using federal funds that might not be loaned to us.” And despite all that, they did it.

Beadle and the founders set up Harper Court as a not-for-profit corporation under Illinois law with a self-perpetuating board of directors. There were no members of the foundation; the board simply adds new directors as old ones retire. At least that is the way it was. This has gone on for about 40 years.

Now there is a board of directors who think what they do is no one’s business but theirs. Who are they? We are not sure. Some of the names are of public record, but they have refused to talk. One person whose name is in the public record reports that she does not know anything about the current happenings. (See story on page 3.)
Can the present board of Harper Court do what seems to be proposed: Sell Harper Court to a private real estate developer and put the money received to a different purpose? We will leave the legal question to the Illinois Attorney General’s office that is investigating the Harper Court activity.

Should they do what they are doing as the Hyde Park trustees of a community asset? We do not think so. They certainly should not do anything as radical as the apparent agenda without full public disclosure and discussion.

The purpose of the Harper Court Foundation as set forth in the filing with the state of Illinois is: “For the civic purpose of furthering the trade and economic development of the Hyde Park-Kenwood area in the City of Chicago and its environs, and promoting and assisting in the growth and development of business concerns including small business concerns in said area.”

The Harper Court Foundation has without public discussion transferred ownership of Harper Court to something called the Harper Court Arts Council. The purposes of the Harper Court Arts Council, as listed in filings with the state, are: “To stimulate, promote, encourage and enhance public appreciation of various art forms primarily in the Chicago metropolitan area, in particular, the community known as Hyde Park-Kenwood.” It continues that the art forms include but are not limited to “fine art, theatre, photography and music and to foster and develop the arts by sponsoring public exhibits and theatrical performances of unknown but promising artists.”

This is not the same goal as the foundation. The secretive board has seemingly transferred ownership of this community asset, endangered the businesses in the center and perhaps created a circumstance in which the community will eventually be deprived of these services. Why? We do not know.

The things we do know or have been told are very strange. In the 1990s the foundation created the arts council as a way of receiving tax-deductible contributions and doing projects in the community. Some foundation board members became the arts council board. Some of those people stopped being active many years ago and yet one name is still on state filings made this past year as if she were still there. She told us she knew nothing of her name still being used. We were also told that last November (before the gift of the Harper Court real estate to the arts council) the board of the arts council was dismissed and a new board put in. Is this true? How do you do that? Do the by-laws of either organization permit it? We have also been told by unofficial sources that the paid director of the foundation is now the president of the arts council. Is that true? We do not know? It is rumored that Harper Court will be sold for $6,000,000. Is that true? A developer is supposedly ready to buy. If he is paying huge sums to buy it, he is not planning to rent to small merchants.

Most disturbing, the Herald was told by someone still somewhat active in the foundation/arts council that the purposes of the two organizations were the same and transferring the assets was therefore all right. This is simply not the case based on the written filings with the state. If this is the reasoning behind the foundation’s move, it is an incorrect reading of the Harper Court history.

Yes, one of the purposes of Harper Court was to help artists, not by giving them grants but by creating space they could afford to rent or places where their output could be sold. But Harper Court was intended to create space for lots of other kinds of establishments. Beadle in her writing about Harper Court points out that the purpose of their efforts was “to study means to prevent or alleviate the effect of urban renewal projects in eliminating the low rent diversified properties which are necessary for the continuation of small businesses of cultural or community significance, including the development of a project to accomplish said purpose.”
As an example, the founders of Harper Court found that the community had a huge interest in a veterinarian, something Hyde Park did not have at that time. And so they created a space for one and they went into the world beyond Hyde Park and found one to move here.

Does the Harper Court board have some secret plan to carry out the original intent of Harper Court? Maybe they are going to do something like help fix up 53rd Street and thus fulfill the original intent of the center. Or instead are they going to make arts grants to people they believe are emerging artists? Nobody but a handful of people knows.

It is most disturbing that a small group of Hyde Parkers has refused, for almost two months, to explain what they are doing with a community asset entrusted to their care.
The last Harper Court Foundation filing that we could find with the State of Illinois was on Nov. 28, 2005. It lists the following people as officers or directors, some of whom are also notable participants in the life of this community: Paula Jones, Georgene Pavelec, Kenneth Grant, Nancy Rosenbacher and Mary Anton.
Despite their Hyde Park experiences they appear to be afflicted with the bureaucrat’s disease: “We know best. Leave it to us.” That has never been Hyde Park’s way.

Before they jeopardize the space which makes possible a bicycle shop, and artisans shop, a children’s clothing store, a plant store, the vet and similar services, we think the board of the Harper Court Foundation owes Hyde Park an explanation and the opportunity to review their decisions.


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Reaction to the fall through of the deal--some glad the flawed process was halted, but favor some kind of redevelopment of Harper Court

The February 22 2006 Herald carried the letter of the Harper Court Arts Council, the latter's first public comment in the four months the possibility of a sale has been in the wind.

Herald February 22. By Tedd Carrison

JDI Realty LLC has rescinded its offer to purchase the Harper Court Shopping Center, according to the Harper Court Arts Council, which owns the complex.

In a written statement, listing seven arts council board members, the non-profit announced Feb. 17 that negotiations have ended with JDI, a downtown real estate developer, but was not clear why. This marks the first time the arts council has publicly addressed the status of the complex since President Paula Jones confirmed the possibility of a sale in December.

Last week Jones told the Herald that she and other arts council board members will be a the 53rd Street Tax Increment Finance District meeting Mar. 13 to discuss the future of Harper Court and field community questions. Until then, she said the submitted letter will stand as her comment about the former negotiations. JDI Senior Vice-President David Rattner did not return calls for an interview.

JDI's decision to exit the deal has conjured mixed reactions fin neighbors and tenants.

"I think the sale would have brought benefit to the original goals set forth by the Harper Court Foundation and the [Harper Court] Arts council," said Jim Poueymirou, president of the Hyde Park Chamber of Commerce, which rents space in the shopping center. "And it would have allowed for the development of greater retail opportunities within the community through the possible upgrade of the physical space, which would potentially bring new retail tenants to the community.

George Rumsey, president of the Hyde Park-Kenwood Community Conference, said he is disappointed that an opportunity for commercial progress slipped away, but he is not surprised the sale fell through because he said the process lacked community input. "I think if they had been open about making changes and the development of the center to the community, we would be in a very different position right now," said Rumsey. He said he could not speak for the HPKCC until the executive committee had discussed the issue further but he personally would like to see the site developed in a "good and open manner."

Rumsey said the most immediate problem facing Harper Court tenants is the uncertainty of their futures. "I have several friends who have businesses in Harper Court and it is very difficult for them," said Rumsey. "They just don't know what is going to happen to them...It is very difficult to run a business in that kind of environment."

Renee Bradford, owner of C'est Si Bon restaurant located in the court, echoed this concern. "It's always frustrating when you don't have information," she said. "And either you can react to it and it will make you crazy or you sit and wait because you have no control over things. I choose to sit and wait."

The University of Chicago leases space from Harper Court Arts Council and has other significant real estate holdings in the area. Hank Webber, U. of C.' Vice-President of Community and Government Affairs said last week that despite these proximate interests, "we have no current plans [to purchase Harper Court] and i would consider it highly unlikely."

Although the university denies interest in Harper Court for the moment, Poueymirou said it would not be hard to find another buyer for the complex. "It's a prime parcel of real estate that is located centrally to Hyde Park that can either by partnered with other parcels or be developed individually, so I think there will be quite a bit of interest in it," he said.

 

So, The sale of the shopping center to JDI is not going forward, according to a Harper Arts Council draft letter sent to the Herald and stakeholders including HPKCC February 17. The latter, which states the position of the Foundation and Arts Council, is printed below. Reaction to the fall-through- click here. Responses to the letter and ideas for moving forward will follow--up now is the Conference's letter and questions to the Arts Council, which is also in the March 1 2006 Herald.

Note: the sale price is reputed as $6.5 million, in accord with HC's reputed appraisal. During three preceding years, no offer exceeded $5 million, so they were rejected. President Paula Jones produced an appraisal in early 2003 of $4/ $5 million.

Alderman Preckwinkle told the Herald in early February [See also her March Alderman's Report]:

"All of the people on the board are my neighbors and some are my friends. However, they chose to proceed without any public input and they are reaping the results."

The Herald asserted that this is not enough and the the alderman should take action to ensure transparency, including holding a public meeting.

In the March 8 Herald Ald. Preckwinkle noted that partly because of subsidizing businesses the Foundation didn't build a surplus for repairs, which are now needed. Calling "the decision not to include the neighborhood in the decision-making process... a big mistake," she said that because of the public/community formation and purpose of Harper Court, any redevelopment and use of realized proceeds from a sale should have a community involvement, even if not legally required-- it's "a good idea." She revealed that HCAC did agree to have a RFP process like that for Harper Theater (including the guidelines) for the Shopping Center. She said she would "try to ensure a fair and open process because that is more likely to foster development that serves a diverse community well." Top

In early February, HPKCC repeatedly asked for a private meeting with the HCF and Arts Council and received no reply. HPKCC, Neighbors to Save and Hyde Park Historical Society met with Therese Harris of the Illinois Attorney General's office February 9 (see below) and are considering next steps. HPKCC president George Rumsey said in media he was not optimistic the HPAC will fully address the issue or answer questions, such as those in the HPKCC open letter to HCAC (with 7 questions that include call for an RFP process for any sale, expanded boards and bylaws, and a transparent process for handling the money). He hoped we could move to serious dialogue.

Meanwhile, the Neighbors to Save Harper Court and others doubt that the current board should be in charge of what happens next, let alone of the money.

By late February, the Foundation and Arts Council had (a bit late) filed with the Illinois Attorney General's Office, although it remains unclear as to whether such filings are mandatory, especially for the Foundation, which is not charitable. Here is what was in the filing covering the year ending May 2005 according to the HP Herald--the Conference has been promised the filing by the Attorney General's Office). The Center was in the black, grossed $514,991. net cash from operations was $40,003. Salaries et al cost $197,925. Interest earned was given by the Herald as $1,571 vs. interest owed on bank loan ($208,767 from University Bank) of $20,200- 9.5%)--disputed by Ken Grant vp of HCF at the March 13 meeting. Also spent was $31,720 on professional fees and real estate taxes of $68,9225.

Meanwhile, tenants appear to remain on month-to-month leases. Top

Appraisal of the property. From Patrick J. Murphy and Associates (hired spring 2005) "Market value" $6.2. (This varies greatly from the HCt appraisal of $4-$5 million set by Paula Jones in January 2003). Set on land value for "some other use" --according to Murphy based on purchaser buying out existing leaseholds and razing the buildings. Murphy is quoted in the Herald: "...the highest and best use for the subject is as vacant land" which would allow the developer to create apartments with perhaps retail on the ground floor. A local developer is reported to have told the Herald that an economic purchase would require the buyer to get new tenants who could afford the cost of new construction--in such appraisals no value is placed on existing tenants. Who would have to be bought out? Dixie Kitchen and Calypso Cafe, and the University of Chicago, which is subleasing the former Co-op leasehold to Checkerboard Lounge and the coming Kleiner restaurant.

Note, the original Planned Unit Development approved by City Council Dec. 30, 1965 (PD38) allows only commercial/business development and that of one of the lowest densities of any PUD in Chicago. Any large or denser or different, mixed-use development would likely require a new PUD that would have to go all the way to and through City Council. Almost always such PUDs require aldermanic support to make it through. Top

 

Harper Court Arts Council public letter of February 17, 2006

The Harper Court Foundation was created as a demonstration project to show how a neighborhood could come together to protect small businesses and cultural entities during a turbulent period of urban renewal. Since that time the residential and cultural elements of the community have prospered, but as many have pointed out, retail development has lagged behind. In this context, the Harper Court Foundation has struggled with what its role should be moving forward and how best to use the assets created so many years ago to continue to support the community.

Consequently, for the past few years the board of the Harper Court Foundation has discussed how to balance the needs of managing a commercial real estate property with the other stated purpose of its charter to support and promote artistic efforts in our community. Over the course of many meetings and two board retreats in 2003 and 2004, the Harper Court Foundation reaffirmed its central mission should be: “a leading organization in promoting and supporting the arts in our community.”

With that mission in mind, the Foundation board set about exploring the options for translating the mission into action. Ultimately it felt the best strategy was to transfer the assets of t he Foundation to the Harper Court Arts Council, a 15-year old charitable foundation founded and chartered specifically to support the arts and arts education. The proceeds of the sale of the Harper Court Shopping Center will be used to fund and expanded Harper Court Arts Council program.
It has never been our board’s intention to be secretive about this process. In fact, over the last several months both board members and David Rattner of JDI have talked with members of the business community, Harper Court tenants, the alderman, and members of the University of Chicago Community. We want to thank t hose people who gave us advice and kept our counsel as we explored the sale process. In large part because of these many conversations, the Arts Council and JDI have agreed not to proceed with the sale of the shopping center property.

The Arts Council still believes the best course of action is to sell Harper Court to a reputable developer with the resources to enhance the retail life of this community, and use the sale proceeds to strengthen the varied and diverse cultural offerings available in our community. Members of the Arts Council will make a presentation at the March 13 TIF meeting. We would welcome your questions at that time.

More than forty years ago the Harper Court Foundation was chartered to meet the needs of the Hyde Park-Kenwood community during a watershed period of community change. The “demonstration project” suggested in the original charter, which became Harper Court, was a model for its time. As our community goes through another period of residential and commercial change, we believe support to our local arts organizations is an investment in the community that will complement those changes. It is our heartfelt hope that in 40 years time community residents will see the actions taken now are as appropriate to these times as t he original decision to create Harper Court Foundation was in its time.

BOARD OF DIRECTORS
HARPER COURT ARTS COUNCIL

Paula Jones
Nancy Rosebacher
Mary Anton
James Ratcliffe
Kenneth Grant
Georgene Pavelec
Duel Richardson

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A HPKCC Open Letter with questions from the Conference to Harper Court Arts Council, February 24, 2006, in response to the HCAC open letter of Feb. 17. With Seven Questions.

The following letter was sent by the President and Executive Committee of the Hyde Park-Kenwood Community Conference February 24, 2006 to the Board of the Harper Court Arts Council (in response to it's open letter published in the February 22, 2006 Hyde Park Herald) and to the Illinois Attorney General's Office, Alderman Toni Preckwinkle, Carol Bradford of the Hyde Park Historical Society, Hanna Frisch of Neighbors to Save, and the Hyde Park Herald.


Friday, February 24, 2006

The Board, Harper Court Arts Council

Dear Directors:

The HPKCC executive committee's discussions of the Harper Court Foundation and Harper Court Arts Council have included divergent points of view concerning the future of Harper Court, including a strong interest in the well-being of the current tenants and a general desire for substantial improvements for retail in Hyde Park. Our anxieties reflect the comments we have heard from many members of the community since the proposed sale was disclosed, sparking intense public attention and reaction. The fears of the community have become heightened as a result of the perception that the Harper Count Foundation and the Harper Court Arts Council decided to sell the property to a single developer without utilizing a process that permitted community input. And the reluctance, until now, of Foundation and Arts Council representatives to respond to community concerns raised serious questions with respect to potential conflicts of interests. The Conference is resolute that there be an open process that encourages community involvement.

The Conference supports responsible development in Hyde Park-Kenwood, and we ask that the Harper Court Arts Council endeavor to set a higher standard for community involvement. We look forward to hearing what changes the Arts Council has made or plans to make to its charter, council composition, and management to meet this goal. Most importantly the Conference has a number of questions related to the future sale process and how the community will participate:

1. What is the Council’s vision or idea for appropriate “development?” And how does this impact (short term and long term) the current tenants?

2. How did the Foundation (or Arts Council) find this developer? Why JDI? Was there a “Request for Proposals?” If not, why not?

3. Will there now be a public Request for Proposals? Will there be a period of public comment, as the University has done with Harper Theater?

4. How are the Arts Council's bylaws being revised to fit its new role?

5. Is there any one with an arts background or affiliation on the current Arts Council board? The head of the Illinois Office of Charitable Trusts explicitly has said that the board as currently constituted is inadequate and must be expanded to better represent the community. How is this to be done? What efforts are being made to interact with community arts groups such as the HP Art Center, Little Black Pearl, Muntu Dance, Mostly Music, the Chicago Ensemble, and the many other small performing and visual arts groups in the area?

6. Two officers of the Arts Council have affiliations with two neighborhood banks (potential financial agents of the sale?) and two members of the Board are affiliated with the University of Chicago (leaseholder and developer of other properties within the same block). What steps are you taking to eliminate possible conflicts of interest?

7. Finally, what sort of framework for making decisions about the dissemination of funds will be set in place? Will there be any public or third-party oversight, scrutiny, or accountability? Will any staff be paid from the funds, and will they have arts training and experience?

Thank you for finally responding to the community concerns over the future of Harper Court. We all look forward to your presentation and explanation on March 13 at the TIF meeting.

Sincerely,
George W. Rumsey, President,
Hyde Park-Kenwood Community Conference

on behalf of the Executive Committee:
Jay Ammerman, Senior Vice-President
James Withrow, Vice-President
M.L. Rantala, Vice-President
Jane Pugh, Treasurer
Irene Freelain, Treasurer
Gary Ossewaarde, Secretary

cc: Ms. Therese Harris, Office of Charitable Trusts, Office of the Attorney General
Alderman Toni Preckwinkle
Ms. Carol Bradford, Hyde Park Historical Society
Ms. Hanna Frisch, Neighbors to Save Harper Court
Hyde Park Herald

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Herald, March 1, asks the big questions about the future of HCt, suggests going back to true-original retail/development purpose for inspiration--but (this page) thinks that may be now legally excluded under governance by the arts purpose of the Arts Council. How do we get from square 1 to square 4.

Note follow up on the March 9 meeting: Ms. Harris of the Attorney General's Office expressed serious reservation about the nonprofit charitable arts council continuing to manage, and subsidize, a shopping center of for profit businesses. This may render moot some of the suggestions below about the Arts Council using funds for retail assemblage and development.

Hyde Park Herald - Editorial, March 1, 2006

Last week the Harper Court Arts Council directors issued a letter, printed in the Herald, making the first public statement about the proposal to sell Harper Court to private developers. And the council promised to come to a public meeting March 13 to answer questions.

We ran the letter on page 1 without any editorial comment. We thought they were entitled to present their position as they wished and with the same prominence the Herald had given other viewpoints.

The arts council/foundation directors (since they are the same people) state in their letter that after two years of discussion about the foundation (among themselves apparently) they "reaffirmed its central mission" that it should be "a leading organization in promoting and supporting the arts in our community."

"Reaffirmed?" That was never the central mission of the Harper Court Foundation. Even their own annual financial statement from their outside auditor on Nov. 10, 2005 says: "The Foundation is an Illinois not-for-profit corporation, formed in 1963, for the civic purposes of furthering the trade and economic development of the Hyde Park-Kenwood area and promoting and assisting the growth and development of business concerns, including small business issues..." Their longer articles of incorporation confirm this language and go on in more detail about helping businesses.

The only way the board of the foundation can do what it has started to do is to put the foundation out of business and transfer its asst's to another not-for-profit with a different purpose. That is what they a have done with the arts council. It must be very attractive to think about sitting on the board of and arts, grant-making organization and giving away potentially millions of dollars.

To make sense of the question of what to do about Harper Court we would suggest dividing the issue into two questions.

The first question is what to to about the fact that the Harper Court land has great value if the community wants to allow substantial development of the site. That is a complex issue that requires much public discussion. If realizing that value requires allowing 100 housing units, is that OK? What about 200? The question that needs to be worked out is what plan would the community support and what land value does that create?

The second question is what to do with the assets of Harper Court, either the present center by keeping it, or the cash that gets generated by selling it. The present board of the Harper Court Arts Council/Foundation says we do not need to carry out the original purposes of Harper Court. Small businesses do not need us anymore.

Well we have some questions for the Harper Court board and the community. The Herald has done some simple research of present and past rental rates in Hyde Park--the rates being paid at Harper Court and the possible costs of newly built space. Without Harper Court, Artisans 21 will have to pay about six times the present rent to have retail space in Hyde Park. Are they able to do that? Do we care if they go out of business or leave Hyde Park?

The Hyde Park Animal Clinic will have to pay between two and two and a half times its present occupancy costs to rent another space in Hyde Park. Are they able to do that? Do we care if they go out of business or leave Hyde Park?

Plants Alive will have to pay between two and two and a half times its present occupancy costs to have retail space in Hyde Park. Are they able to do that? Do we care if they go out of business or leave Hyde Park? We could go on with the list.

Some of Harper Court tenants could manage market rents and perhaps have been receiving a community subsidy they do not require. If so, that is bad management by Harper Court.

Harper Court has always had tenants who paid closer to market rents and tenants who needed the community help in the way of lower rents because they provide special services to the neighborhood. Policing that is the job of Harper Court management. And finding tenants that Hyde Park needs is also Harper Court's job. We wonder when the last Harper Court foray took place into other Chicago neighborhoods looking for possible tenant ideas.

And there is a last question. Suppose the Harper Court land value is realized. Suppose the needs of the less than market rate stores and services we want can be accommodated by using part of that value. Why not use the rest of that value to solve some of the commercial retail problems we have, like land assembly even for market rate tenants.?

Of course making arts grants is a bit more fun, easier and certainly a community good.

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Maroon, March 3 2006, cites Conference views, failure of Harper to communicate, limbo state of Harper Court

Community groups seek private meeting on details of sale

Hyde Park's most active civic organization, the Hyde Park-Kenwood Community Conference (HPKCC), has received no response to its request for a private meeting with the two groups--the Harper Court foundation and the Harper Court Arts council---involved in the recent process of transferring ownership of Harper Court, a neighborhood shopping center.

Harper Court was established to retain Hyde Park's small businesses and artisans in the wake of urban renewal. The property was managed by the Harper Court Foundation until December 2005, when it was transferred to the Harper Court Arts Council, a smaller, younger nonprofit operating out of the same office.

"We haven't heard a word from them," said George Rumsey, President of the HPKCC, adding that two weeks have passed since the HPKCC made its initial requests to the groups.

Harper Court Arts Council executive director Leslie Cole-Morgan and board member Duel Richardson, also the University's director of neighborhood relations, declined to comment further on the issue.

The transfer has frustrated some residents, who say that the process lacked transparency and community input. Others fear that the sale of Harper Court to a third party will raise rents, ejecting the shopping center's small merchants and services.

Though the Harper Court Arts Council has not responded to requests for a private meeting with the HPKCC, it stated in a press release issued last Friday that it would make a presentation and take questions at the March 13 Tax Increment Financing (TIF) district advisory council meeting. The council meets regularly to discuss the distribution of business taxes for neighborhood improvements such as storefronts.

The Arts Council press release also confirmed rumors that the sale of Harper court to JDI Sr. Realty, LLC., a for-profit realtor based in the Loop, had been halted. "As I understand it, JDI made and offer, but the board rejected it ," said Peter Page, a member of Neighbors to Save Harper Court, a community group formed in response to the prospective sale. "It looks like there'll be more time for us to form a strategy."

According to the HPKCC, Harper Court is now closed to new tenants, and current tenant have signed monthly leases with short-term commitment provisions, [Ed. note--it is not certain to this website whether this is universally the case --Harper Court denied to the Herald that a Copyworks successor was refused signing rights.]

Responding to charges of opacity, the Arts Council press release stated, "It has never been our Board's intention to be secretive about this process.. In fact, over the last several months both board members and David Rattner of JDI have talked with members of the business community, Harper Court tenants, the alderman, and members of the University of Chicago community" [and swore them to secrecy].

The Arts Council press release added that since 2003, the Harper Court Foundation has discussed ways to balance the needs of Harper Court businesses with the area's purpose of promoting artistic activity."Ultimately [the Foundation] felt the best strategy was to transfer the assets of the Foundation to the Harper Court Arts Council," the press release said.

A major question raised by Neighbors to Save Harper Court is who will benefit from the Harper Court sale. The Arts Council said in the release that the sale's proceeds "will be used to fund an expanded Harper Court Arts Council program"

In response to the Arts Council, Rumsey and the HPKCC executive committee sent an open letter to the Arts Council board, published February 24 in the Hyde Park Herald, criticizing the Council's decision to sell the property to one developer "without utilizing a process that permitted community input."

The HPKCC posed seven questions to the Council, including "what is the Council's vision or idea for appropriate 'development?" and What steps are you taking to eliminated possible conflicts of interest?" Rumsey has also expressed concern that two Arts Council board members are affiliated with the University of Chicago, a significant leaseholder in Harper Court.

"These are the questions that need to be answered first," said Rumsey, adding that much will remain to be seen even after addressing these issues."I expect there'll be a lot more questions," he said.

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About the Save Harper Court group, contacts, petition

Presented as a service of this website. The activities and positions of the group are not necessarily endorsed by our site or its owner, Hyde Park-Kenwood Community Conference.

A Neighbors to Save Harper Court group has been established by community residents. To text of their Letter to the Herald, January 18 2006 with petition.

They have established a listserve, saveharpercourt@yahoogroups.com.
Subscribe at saveharpercourt-subscribe@yahoogroups.com.
E mail: saveharpercourt@yahoogroups.com
Talk to a real person (Sonya Csaszar) 773 548-5779. Hannah Frisch is co-organizer.
Their listserve has a petition they are circulating.
They ask that people write Alderman Preckwinkle with their views and urging her to "save" Harper Court, a community non-profit resource. The petition states that the Alderman should act to preserve the Court, whose loss is NOT in the interest of the community, that is is very important that the local retail outlets be able to stay in Hyde Park at affordable rent, and asking her to serve as the community's agent with and setting the standards for the developer. ).
They seek volunteers to circulate the petition, do other work, including an informational visit with the non-profit regulators.

Petition text:

Dear Alderman Preckwinkle:

We the undersigned respectfully request that you do everything in your power to preserve Harper Court. As customers of the Harper Court businesses, it is very important to us that these vibrant local retail outlets be able to stay in the community at an affordable rent.

We ask you to represent us as you deal with the developers who are seeking to turn Harper court, a community non-profit resource, to private use. As the alderman, you have the power to facilitate a developer’s work or to let developer know that he or she is violating community interests. Losing Harper Court is NOT in the interest of this community.

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"HPKCC says":

HPKCC's executive committee and board considered both the Harper Court Arts Council letter of February 17 2006 then the answers by the HCF and HCAC at the March 13 TIF meeting inadequate and responded in each case with an Open Letter with 7 questions (the ones needing answers first) to the HCAC board, Herald and others dated February 24, and then with a an open letter dated March 17 announcing an alternative process for broad input into RFP principles. HPKCC also questioned the appropriateness of the HC boards to proceed with sale of the court and management of realized assets.

One of HPKCC's community goals is open process on community changes, most recently expressed as a Board Resolution and letter to the parties and Herald with regards to selection of a replacement senator in late 2004, Promontory Point negotiations, and Harper Court sale. The Conference and sister organizations are jointly still seeking to open dialogue with the Harper Court Foundation and Arts Council (as we have been encouraged to do by the Attorney General's Office.)

And what most vexes a large part of the community--is it the sale, the threat of remake or teardown of the Center, use and control of the money, or the lack of a public process or at least disclosure? Or all of the above? HPKCC has not taken a position on the physical future of the court except to set up a process for community input as well as asking hard questions of Harper Court.


Comments by HPKCC to the February 17 Maroon

"[All this] happened so quickly with so little warning, with no discussion," said George Rumsey, president of ...HPKCC. "No on anticipate it. It seemed very unfair to people, especially considering that Harper Court was originally set up as a community asset."

"A lot of people are disappointed with the process, said Gary Ossewaarde, secretary of the HPKCC. "They chose to fall back on 'it's my right not to tell anything.'"...

At last week's meeting with Assistant State's Attorney Harris, community groups raised concerns about a lack of community representation on the Harper Court Arts Council's board. Rumsey said that conflicts of interest may rise with the current board, which includes two members affiliated with local banks and two others with University affiliations. "The University has been seen as one of the possible beneficiaries if a sale were to go through," Rumsey said. "Those issues have not been resolved yet."

...HPKCC...['s] top priority is to understand the current ownership status of Harper Court and its future implications....


HPKCC Comments to the February 22 Hyde Park Herald

George Rumsey, president of the Hyde Park-Kenwood Community Conference, said he is disappointed that an opportunity for commercial progress slipped away, but he is not surprised the sale fell through because he said the process lacked community input. "I think if they had been open about making changes and the development of the center to the community, we would be in a very different position right now," said Rumsey. He said he could not speak for the HPKCC until the executive committee had discussed the issue further but he personally would like to see the site developed in a "good and open manner."

Rumsey said the most immediate problem facing Harper Court tenants is the uncertainty of their futures. "I have several friends who have businesses in Harper Court and it is very difficult for them," said Rumsey. "They just don't know what is going to happen to them...It is very difficult to run a business in that kind of environment."


The March 15 Herald, March 31 Maroon quote President Rumsey at the March 13 TIF meeting

Hyde Park-Kenwood Community Conference President George Rumsey questioned whether the current board, which admitted to sub-par property management multiple times during the meeting, was the ideal group to handle the sale. "A group that has not been able to manage Harper Court doesn't exactly instill confidence that they are going to be the best group to sell Harper Court," he said. Rumsey requested that local community groups have a say in what becomes of the complex.

The March 31 Chicago Maroon quoted Rumsey: "I don't think they answered any questions. They agreed to an open RFP process, but their idea of an open RFP process is to turn it over to the alderman. A small, self-appointed board of six or seven people is entirely inappropriate to handle a transaction that will change the face of Hyde Park for the rest of our lives. They need more people--people with background in the arts, people who know how to manage real estate. They've repeatedly said they had trouble managing Harper Court, so why do they think we'll trust them to sell real estate?"

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Scenarios: Who might gain; how might a sale play out in terms of the Center and dollars

By Gary Ossewaarde (March 2006)

Potential gainers

Harper Court Foundation and Harper Court Arts Council.--dumps an aging, difficult to fix and bring to code, allegedly mismanaged (at least in the past) perceived white elephant while being able to show or say that loss to a non-resident entity and the center's movement into the private sector is compensated by a large sum of money to be spent in the community for arts or related needs. Will reap tax advantages and can say what happens to the center is responsibility of the buyer.

Tenants. 1) if the new owner truly does all possible (given compliance laws) to fix up and keep the court while not driving out tenants through high rent and finds ways to increase the foot traffic and parking/access capacity,
2) if the center is to substantially rebuilt or torn down, new space (cheap in compensation) is provided (pres. by the University) for the stable, viable tenants. Marginal tenants likely lose out.

University of Chicago, Theater developer. Respondents to Theater RFP and final developer chosen are assured that the adjacent Harper Court is in the wholly private sector and is in play for future development-along with the city lot and its replacement parking! This increases immediate and long-term value to both university and developer (to the university especially if it selects a lease option). Also to the University as lease-owner of the Checkerboard-Kleiner restaurant building. Flexibility in the theater structure and for enhanced parking in the future are also increased. See also next three items. Should the University in the end be the buyer (as it was before mid 2005), the gains are multiplied.

53rd Street TIF District. Even a private purchase and or some fix up is likely to result in increased valuation, hence increased increment in tax dollars for use of the TIF for parking, the Canter School addition, streetscape etc. If redevelopment comes in the next 10 years, the gain should be substantial. The TIF is inevitably driven toward maximal development.

Businesses and owners in the vicinity. Increased value from the possibility of short-term improvement and future redevelopment, possibility that the parking mess may be alleviated.

Institutions and others who may receive part distributions of funds: University of Chicago (art organization providers and incubators such as Smart Civic Knowledge Project, Urban Schools Program--or potentially an arts component in the Theater: this latter highly unlikely now), Hyde Park Art Center, Community Art Fair, artists/art providers under existing Harper Court Arts Council and similar.

Note--any suggestion that individuals stand to profit from the sale proceeds (other than as legitimate administrators) is both speculative and highly unlikely given laws, oversight, and now public scrutiny.

Future of the shopping center

Substantial or total redevelopment is likely (the economy holding up). Presumably, space at greatly reduced rate could be made available for key loyal tenants such as the Animal Clinic and Artisans 21, in-development or elsewhere, similar to the University's arrangement with the Checkerboard. Alternatively, tenants could be bought/opted out, eliminating a source of sympathy and opposition to rfp and development. Meanwhile the theater complex and the one-story to the north are redeveloped.

Harper Avenue is punched through, probably sooner rather than later--the Alderman already is said to prefer this anyway and it may be necessary to the theater redevelopment.

A few years down the road most of Harper Court is torn down for new development and or garage (with development of the city lot).

Distribution of the six million or so sale proceeds

Part will undoubtedly go to present beneficiaries of the Arts Council including the Community Art Fair (for which HCAC is the 501), art projects and programs in schools, art projects in the community, support for needy artists and arts organization, and arts festivals. If substantial amounts are to be given in "grants" to "unknown" or needy individuals, there will be expectation that safeguards will be put in place and the board of the Council reconstituted.

A major component could go to University of Chicago qualified administrators of programs, grants, and outreach programs such as Civic Knowledge Project/Enhancing Assets, Smart Museum, Court Theater, and more.

A component could go to the University for a qualifying component of the proposed Arts and Performance Center south of the Midway (by extension "in Hyde Park-Kenwood" and since the University is specifically mentioned in the HCF articles as at least a default repository for dissolved assets of the Foundation).

Some could conceivably go to Theater building redevelopment or programs should the developer include some facility under the Request for Proposal invitation of "civic, arts, or entertainment." This is highly unlikely.

A major part could go to be administered by the Hyde Park Art Center, particularly for outreach.

What the Herald of March 1 says will be cost changes to current tenants if the same space is redeveloped- and do we care if we lose such businesses?

Artisans 21: Six times its current rent anywhere else in Hyde Park
Hyde Park Animal Clinic two and a half times
Plants Alive two to two and a half times

And would we lose Cafe Calypso, Dixie Kitchen and Bait Shop, C'est Si Bon, Maravellas, Baby PhD, the bike shop, Checkerboard, and Kleiner?

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Summaries and turn of the wheel. Alderman Preckwinkle, in Alderman's Report of March 8 2006, reflects on trajectories of Kimbark and Harper Court, calls lack of public process Harper Court's "big mistake," announces RFP process and calls for community involvement in use of funds

Hyde Park Herald, March 8, 2096

From Urban Renewal to the present, 53rd Street. reflects all of our attempts to revitalize this most important commercial district. Two major investments in retail on 53rd Street were made in the 1960s, both bearing the imprint of the decade.

Local businessmen could not induce a real estate developer to build a shopping center. Together they built Kimbark Plaza themselves, showing admirable grit and a willingness to invest in a racially diverse community at a time when even the federal government deemed that a risky business.

Kimbark Plaza reflected the limited architectural vision of the time with its parking located in front of the retail units. To protect their individual investments, the founders formed a commercial cooperative. For decades the center house popular local businesses, often with female and/or minority ownership. However, as major changes became necessary, the complex ownership proved an obstacle to effective decision-making and further investment. A few owner-operators remain, while others lease their spaces.

Harper Court was more innovative and for a time more successful. Muriel Beadle and the neighbors who supported her deserve credit for caring about small business owners and artisans. Harper Court reflected an effort to preserve a place in the community for them.

Until the 1990s, diverse businesses continued to boom and lively crowds shopped and dined. Stellar businesses and restaurants continue to thrive although in an increasingly forlorn environment. The overall design of Harper Court has not aged well and the lower levels in particular proved lethal to successive businesses. The low rents, a central feature of the strategy to attract and retain small businesses, had unintended consequences. The foundation never built a reserve sufficient to fund major capital improvements.

Unfortunately, the shadow of uncertainty has hung over Harper Court's tenants for years. Change is clearly needed; however, the decision not to include the neighborhood in the decision-making process was a big mistake. I do believe that as public land was assembled to build Harper Court and it was built for a public purpose, the building should be offered for sale as part of an open Request for Proposals process, inviting well-qualified developers to make creative proposals. Harper Court is under no legal obligation to do this, but the board has consented to do so. I would also suggest that the board seek community input on the use of the proceeds of any sale eventually made. It's not legally required but it's a good idea and will most likely lead to a better result.

The Request for Proposals (RFP) developed by the University of Chicago for th 53rd and Harper parcel is a good model. I would encourage people to review the redevelopment principles contained in that document which is available on the South East Chicago Commission's web site (hydeparksecc.com).

I can make recommendations about selling, preserving or redeveloping privately held real estate. However, I cannot prevent a willing seller from selling to a willing buyer even though I occasionally would give my right arm to be able to do so.

53rd Street proves one generation's innovation can become the next generation's challenge. Hopefully, as we manage change we will think hard about long term needs. I will try to insure a fair and open process because that is more likely to foster development that serves a diverse community well.

I have asked the TIF Advisory Council to provide a much needed forum for a public airing of Harper Court's options. The meeting will be held on Monday, March 13 at 7 p.m. at the Hyde Park Neighborhood Club. I would encourage everyone who is interested to attend.

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Two views summarize what folks were thinking by mid-late March

Continuing viewpoints and letters March 2006>

Peter Page, March 22. Herald. Harper Court no longer relevant?

The March 13 TIF meeting must, to say the least, be disappointing to those in Hyde Park/Kenwood who expected to engage in a two-way discussion with Harper Court Arts Council representatives. It was more reminiscent of the present administration's presidential press conferences.

One hoped to leave with specific information regarding the process of the proposed sale of Harper Court and at least some notion of the council's future agenda. Instead, I left with the impression that this small group of people decided that, because Urban Renewal is past history, Harper Court is no longer relevant.

Was there some significance in the timing of the sale? Did they consider any options for preserving the foundation? Why did they not include the community in their decision making? We may never know the answers to these and many other questions posed. The council representatives conveyed the impression that their decision was irrevocable and there was no point in further discussion.

The only thought more frightening than their seeming reluctance to share any specific information is t he possibility that what they said was all they had to say.

One of the best ideas of the evening was Robin Kaufman's suggestion that there be a two-or threee0year moratorium on any transactions involving Harper Court. This would give the present tenants a breathing space and the board, whatever it chooses to call itself, an opportunity to come together.

I add my thanks, along with many other at the TIF meeting, to the Hyde Park Herald for its superb reporting of the Harper Co ut controversy and to Ald. Toni Preckwinkle for making this first meeting possible.

James Newborn, March 22. Herald. Constructive dialogue for Harper Court

I attended the 53rd street TIF Advisory Council meeting on March 13 an I listened to the Harper Court meeting on March 13 and I listened to the Harper Court Arts Council closely.

It is rather transparent that the arts council did not address the community out of some egalitarian notion, but of damage control. The members of the council were quite haughty when answering questions.

First, they refused to meet in any other community venue outside the 53rd TIF advisory board. I surmise this is not surprising since the chair of the board stated prior to the meeting that the arts council can "orchestrate it as they see fit".

But there are other community groups and organizations, like Neighbors to Save Harper Court, the Hyde Park-Kenwood Community Conference, Hyde Park Historical Society and others that would welcome a constructive dialogue with the arts council to hopefully enhance and preserve Harper Court.

[The Council] have nothing to fear but themselves. The arts council created the environment in which many in the community are deeply incredulous of their intentions, especially the lack of openness. So getting out of their "comfort zone" simply goes with the territory.

Second, the arts council made no guarantees that current tenants and/or businesses that are conducive to the original mission of Harper Court would be allowed to return if the court is redeveloped or razed. This is disturbing. Even the thought of the nature and character of the court being changed is repulsive and an affront to Hyde Park.

Third, I asked the council members during the question and answer about why an earnest effort was not made to enhance the structural facade of the court and other improvements? The spokesman for the group, who identified himself as vice president of the Harper Court Foundation, stated that such attempts were made, to no avail. If so, why were other tenants at the meeting stating that their plans and lamentations for improvements were ignored for years by the Harper Court Foundation, now the arts council? Something is amiss here.

Ald. Toni Preckwinkle's position on Harper Court is rather reticent. She has to take a firm position on what should happen to Harper Court. She is either for the community or against the will of the community.

In my current opinion, the arts council changed its non-profit status out of sheer avarice. The $6.2 million property assessment of the court must be an attractive endeavor for developers and business interests who are more concerned about profit than about enhancing a sense of community and small retail which is the hallmark of Harper Court. The latter should remain the same.

On the other hand, Hannah Hayes says we should latch onto the "supporting artists" (including the muralists, seeking to rehab the murals) and bring that back as a major, precious part of continuing Hyde Park heritage.

Do why did Harper Court change its purpose? Herald editorial March 22

The most disheartening thing about last week's TIF meeting was the lack of information from the Harper Court Foundation/Harper Court Arts Council about why they felt it was appropriate to change the purpose of Harper Court.

Harper Court was created 40 years ago to provide services and commercial space in Hyde Park for small business and artisans and to make it possible for some businesses that could not find affordable space in our neighborhood to exist. The foundation/arts council now proposes to sell the land for redeployment and take the money and make arts grants.

Although Harper Court was created by community effort and functions as a non-profit corporation, the foundation board carried on its planning in secret apparently for almost two years. Finally at a public meeting last week we were in hopes that they would articulate a position that was well thought out and backed by research that would make clear that Hyde Park no longer had a need to help the kind of merchants that Harper Court has served.

Instead we are told that Harper Court had served its purposes and they had consulted local and national experts who confirmed that it was no longer needed. What experts? What did they specifically say? Are there retail studies of Hyde Park? What was learned? Was this straight "shopping center" research? Or did they do community interviews to find out neighborhood need and desire?

Also there were allusions to the center's enormous land value and the need for rehabilitation of the present buildings, but again no specifics.

We would like to emphasize something the Herald pointed out several weeks ago. There are two separate issues: what to do about the "value" of the Harper Court land and the condition of the present structures, and what to do with the "assets" of Harper Court, either the land and present center or the cash, which might be generated by selling the land?

What we do with the "assets" is the primary question. The Harper court board says there is is no longer a need to help Artisans 21 or Plants Alive or the other small merchants who serve our community. They should be on their own. They do not need the help Harper Court provides, and therefore we (the board) can take the assets of Harper Court (the cash) and spend it making arts grants to artists.

What Harper Court failed to do last week was to make the case for its position on the use of the assets. Where is the research that says we no longer either want the merchants who are there or they can survive on their own.

To say that Harper Court has outlived its usefulness without documentation is not fair to the community or the history of Harper Court.

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Harper Court Foundation and Arts Council facts

 

Helga Sinaiko relates to Herald projects over the years of the Harper Court Arts Council, new owner of the shopping center

Since include Stars of the Joffrey at Hyde Park School of Ballet benefit, Harper Court Int'l Art Fair

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Who are the board members, who's in charge?

In the filing of November 28, 2005 with the Illinois Secretary of State's Office, listed as directors
of Harper Court Foundation, which wholly controls the Arts Council:
Paula Jones (president)
Nancy Rosenbacher (secretary)
Georgene Pavelec (treasurer)
Kenneth Grant, Rose Nayer, Mary Anton
(Leslie Cole-Morgan is the executive director of both the Foundation and the Council)

Paula Jones is an officer in Hyde Park Bank, Georgene Pavelec is a real estate owner and manager, Rose Nayer is a former owner of a real estate firm now with Kennedy, Ryan, Monigal, and Mary Anton has served on many neighborhood boards, some say as an observer/ representative for the University of Chicago.

Recent filings with the State by the Harper Court Arts Council list Helga Sinaiko as president although she told the Herald she has not been part of the Council for two years. Others listed from January 21, 2005 were:
Elizabeth Lawlor
Dorri Ellis (active with the Community Art Fair on 57th)
Judith Heineman
Mary Anton

In November 2005 the HCAC was reconstituted and frozen by HCF, 6 officers of the latter being substituted: (Only Anton and Rosenberger had been on the HPAC Board; Duel Richardson is an officer in the U of C Community Affairs Office)
Paula Jones, President
Kenneth Grant, Vice President
Nancy Rosenberger, Secretary
Georgene Pavelec, Treasurer
Jim Ratcliffe
Mary Anton
Jason W. Bruce
Karlyn Metcalf
Duel Richardson

Leslie Cole-Morgan is listed as executive director of both boards).

(Two directors listed in 1990 told the Herald they have never been associated with the Council.)

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Seeking answers, reality

As of late January, neither the Harper Court Foundation nor the Harper Court Arts Council have given any comment on sales, transfers, use of funds or other changes to Harper Court.

Original purposes from Articles of Incorporation, according to those who have checked with the Illinois Attorney General and Secretary of State offices and non-profit experts; what tax exempt status for the new owner (Arts Council) brings.

Harper Court Foundation (1963, reaffirmed in auditor's statement Nov. 10, 2006):
[for] "the civic purposes of furthering the trade and economic development of the Hyde Park-Kenwood area in the city of Chicago and its environs, and promoting and assisting the growth and development of business concerns including small-business concerns in said area."

Harper quotes in more detail:

"to study the means to prevent and alleviate the effect of urban renewal projects in eliminating from a community the low rental, diversified properties which are necessary for the continuation in the community of artisans, craftsmen and educational, recreational and other services offered on a commercial basis but of special cultural or community significances; to initiate and to carry on any project designed to further or effectuate said purpose, and in general, to engage in any activity tending to further said purpose, including the development of a demonstration project in the Hyde Park-Kenwood urban redevelopment area in Chicago, Illinois...net earnings of the corporation...if any, shall all be used for the study, development or carrying out of any means and projects for preventing the cultural and community sterilization associated with urban renewal developments and for the making of donations to existing tax-exempt cultural organizations in urban renewal areas....Upon dissolution the assets of the corporation shall be distributed to some tax-exempt organization whose purposes are, as near as may be, the same as those of the corporation; and failing such similar organization, the assets shall be distributed to tax-exempt cultural organizations in urban renewal areas..."

[Comment, this was at once vague and extremely limited (i.e. "urban renewal"-constrained). No wonder the statement of purposes is cited to prove nearly anything about the purposes and construed as either giving carte blanche or saying the org. can do very little than it originally did. HC tries to get around this by saying urban renewal conditions are gone and the original purposes are both accomplished and impossible to further carry out under the existing structure, and by pointed to words like "cultural" and "artisan" as well as provisions of dissolution including "charitable" to say it can devolve the assets on a cultural foundation that serves the arts. According to the Attorney General's office, the law governing general nonprofit corporations (as the Foundation is) provide little guidance or restriction so that the devolution is undoubtedly legal.]

Harper Court Arts Council (1990, a 501(c)3 with federal* tax exemption on sale of assets and contributions received: (What advantage tax exempt status brings)
"to stimulate, promote, encourage and enhance public appreciation of various art forms primarily in the Chicago metropolitan area, in particular, the community known as Hyde Park-Kenwood ...including but not limited to fine art, theater, photography and music, and to foster and develop the arts by sponsoring public exhibits and theatrical performances of unknown, but promising artists."

*But see at bottom of section.

One can conclude that the Arts Council can sell the Center with no tax liability (so long as it uses the proceeds in accord with the above/similar purposes), while Harper Court Foundation could not. If this is so, it likely explains the transfer of the Center to the Council.

The Herald of January 25, 2006 cites conversation with Evelyn Brody, professor of non-profit law at Kent College of Law: Proceeds from sale of assets by the Council would have to remain in the charitable sector and adhere to the seller's mission. What would happen were the Foundation to make the sale is less clear, since it does not have the federal tax-exempt status. However, the Foundation is now dissolved and the Arts Council probably cannot continue to own and operate a commercial district of for profit businesses.

Harper Court was originally and has been since 1965 a Planned Unit Development approved by the Plan Commission and then City Council December 30, 1965. The PUD stipulations are very strict--business and commercial uses only, and include one of the lowest density provisions of any PUD--nothing much larger or with more floor space than what's there can be built. This means any different proposal will have to go through the process again, including final approval of City Council. This is probably a major reason HCAC agreed to go through Request for Proposals procedure.

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What is the State of Illinois (Attorney General Bureau of Charitable Trusts, others) and tax experts saying about what's permitted, what's not, what has to be changed?

At the February 9 meeting of George Rumsey, HPKCC president; George Davis, HPKCC board member; Carol Bradford, Hyde Park Historical Society president; Charles Custer, Theresa Harris and three other officers of the Illinois Attorney General's office expressed these concerns:

Earlier, Therese Harris, Assistant Attorney General of the Charitable Trusts Bureau, informed a questioner that she met with representatives of the two boards (HC and HC Arts Council). Her advice was for the boards to enact certain bylaws changes (particularly coordinating mission), expand their boards to make them more representative of the community-- especially since the money to be realized was, she suggested, too large to just use for current arts support such as the Community Arts Fair--and to engage the community and its stakeholders in some manner re: use of the proceeds. She did tell the boards that they have not done anything so far that is illegal or violates their trust. She encouraged the Neighbors to Save HC group and stakeholder organizations to meet with Harper Court and with her.

Previously, Ms. Harris told the Herald that generally a charitable non-profit must extend all proceeds of a sale to the mission of its organization. She opined that a non-profit without a board is often illegal. In late January, the Herald cites Evelyn Brody, professor of non-profit law at Kent College of Law: Proceeds from sale of assets by the Council would have to remain in the charitable sector and adhere to the seller's mission. What would happen were the Foundation to make the sale is less clear, since it does not have the federal tax-exempt status.

Tax experts consulted by the Herald say there are tax savings or elimination from the transfer of the shopping center to the Arts Council. However, it appears the Arts Council has only a state, not a federal 501 charitable tax exempt status (a frequent option for small organizations).

The Foundation's articles say it was founded to promote business, particularly small and artisan businesses, in Hyde Park especially, while the Foundation was established to promote and underwrite the arts. However, an expert at the Bureau of Charitable Trusts says this is not an impediment to the transfer or to the sale of the Center.

Article 6 of the Foundation's incorporation filing says:

"Upon dissolution, the assets of the corporation shall be distributed to some tax-exempt organization whose purposes are, as near as may be, the same as those of the corporation, and, failing such similar organization, its assets shall be distributed to tax-exempt cultural organizations as the University of Chicago in the Hyde Park-Kenwood Urban Redevelopment Plan in Chicago, Illinois."

(Note- the U of C, such as the proposed new Arts and Performing Center south of the Midway and its many arts and performing sub organizations including Smart Museum, as well as the Hyde Park Arts Center would thus appear to be in view as legitimate heirs for parts of the funds, as well as the Harper Court Arts Council.) Attorney Leon Despres, however, told the Herald that "there are so many purposes under which non-profits can be organized, so just transferring it from one to another would not be enough to protect the original purpose." There is also the question of what is the impact on all this of the alleged December dissolution of the Arts Council by the Foundation.

On rights and obligations as nonprofits; recourse of others

A charitable, tax-exempt nonprofit's realization on sale of assess must remain in the charitable sector and adhere to the seller's mission.

Non-profits are not required to discuss their decision with the public, and there is not legal recourse or standing for third parties such as community residents.

Evelyn Body of Kent College of Law told the Herald that the Attorney General has authority to step in if she believes noncompliant behavior has occurred, but "the court of public opinion is usually where this stuff gets litigated." She opined that a non-profit without a board is often illegal. (According to Dorri Ellis who says she is on the board of the Arts Council, the Council was dissolved until after the sale by the Foundation after the Center was transferred to the Council.)

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Leaders of HPKCC, HP Historical Society, Neighbors to Save Harper Court meet with officers of Illinois Attorney General's Office February 9

February 9 2006, President Rumsey and a board member of Hyde Park-Kenwood Community Conference, President of Hyde Park Historical Society, and a member of Neighbors to Save Harper Court met with Therese Harris and three other personnel from the Illinois Attorney General's Office (all Assistant Attorney Generals).

Rumsey said the meeting reinforced and clarified other information available in bits and pieces previously. Ms. Harris confirmed that non only is the Foundation dissolving and has turned over its assets to the Arts Council but the Foundation has never registered with the Attorney General's office (which it can so choose since it is not "charitable"). They have agreed to file 3 years of financial reports--not yet then received.

Harris said she insisted to the Arts Council that it re-write its by-laws so it will be enabled to handle the new assets, and must also broaden its board of directors to include more community representatives. Copies of the organizations' articles of incorporation and most recent annual reports were furnished.

She is also encouraging and will re-ask them to meet with concerned community groups such as those at this meeting, and encouraging community groups to keep up the pressure..

Some discussion was held of community concern about potential conflicts of interest of board members whose institutions/businesses could benefit from distribution of the assets, and of whether either the Foundation or the Council were, should have been or can in the future subsidize rent of profitable businesses in the shopping center.

At the February 9 meeting of George Rumsey, HPKCC president; George Davis, HPKCC board member; Carol Bradford, Hyde Park Historical Society president; Charles Custer, Theresa Harris and three other officers of the Illinois Attorney General's office expressed these concerns:

 

Comments to the February 17 Maroon re the meeting:

"[All this] happened so quickly with so little warning, with no discussion," said George Rumsey, president of ...HPKCC. "No on anticipate it. It seemed very unfair to people, especially considering that Harper Court was originally set up as a community asset."

"A lot of people are disappointed with the process, said Gary Ossewaarde, secretary of the HPKCC. "They chose to fall back on 'it's my right not to tell anything.'"...

"We don't know anything about this developer," said Lab Schools nurse Peter Page [of Neighbors] "Maybe he's intending to keep these businesses here, but it's hard dt believe that the rents won't go up."

... Rumsey said that conflicts of interest may arise with t he current board, which includes two members affiliated with local banks and two others with University affiliations. "The University has been seen as one of the possible beneficiaries if a sale were to go through," Rumsey said. "Those issues have not been resolved yet."

[The HPKCC sent its letter of reply and questions to the Harper Court Arts Council public letter (not an answer to us and to our request to meet). Next steps other than consultation in the community likely depend on what's said at the March 13 TIF meeting.]

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Harper Court's distributed paper at the March 13 TIF meeting: Questions and Answers About the Status and Future of Harper Court, March 2006

Q: When and why was Harper Court Foundation started?
A: The Harper Court Foundation was incorporated in 1963 "to study the means to prevent and alleviate the effect of urban renewal projects in eliminating from a community the low rental, diversified properties which are necessary for the continuation in the community of artisans, craftsmen and educational, recreational and other services offered on a commercial basis but of special cultural or community significances; to initiate and to carry on any project designed to further or effectuate said purpose, and in general, to engage in any activity tending to further said purpose, including the development of a demonstration project in the Hyde Park-Kenwood urban redevelopment area in Chicago, Illinois...net earnings of the corporation...if any, shall all be used for the study, development or carrying out of any means and projects for preventing the cultural and community sterilization associated with urban renewal developments and for the making of donations to existing tax-exempt cultural organizations in urban renewal areas....Upon dissolution the assets of the corporation shall be distributed to some tax-exempt organization whose purposes are, as near as may be, the same as those of the corporation; and failing such similar organization, the assets shall be distributed to tax-exempt cultural organizations in urban renewal areas..."

The Harper Court Shopping Center was a "demonstration program" which grew out of the Harper Court Foundation charter. The Shopping Center was build on public urban renewal land using the proceeds of bonds that were purchased by the members of the Hyde Park Community. The bonds were paid off in the early 1990s.

Q: Why was the Harper Court Arts Council created in 1990?
A:
The Harper Court Arts Council was created in 1990 after some members of the University community contributed their matures bonds back to Harper Court to be used for charitable purposes. The 1990 charter of the Council is: "To stimulate, promote, encourage and enhance public appreciation of various art forms primarily in the Chicago metropolitan areas and, in particular, the community known as Hyde Park, including but not limited to fine art, theatre, photography and music, and to foster and develop the arts by sponsoring public arts exhibits and theatrical performances of unknown, but promising, artists..."

Q: Has the Foundation changed the focus of its original mission?"
A:
No. The Foundation has always had the dual mission of supporting the community's small retail businesses and tax-exempt cultural organizations. The Foundation has concentrated on the management of the Harper Court Shopping Center, while the arts Council has concentrated on using limited available resources to support cultural activities.

Q: What are the plans for the future of Harper Court?
A:
The Harper Court Foundation donated the Harper Court Shopping Center to the Harper Court Arts Council. The Arts Council plans to sell the shopping center through a public RFP process similar to the one being used for the Hyde Park Theatre. The Council feels the "win-win" strategy for the community is to sell Harper Court to a reputable real estate developer who has the resources to reinvest in the business community.

Q: What will happen to the proceeds from the sale of Harper Court?
A:
Proceeds from the sale of the Harper Court Shopping Center will be reinvested to create an endowment fund. The income will be used to support tax-exempt cultural organizations that contribute to the quality of life in our community. The Federal Internal Revenue Code and State of Illinois Attorney General's Office govern the organization and programs of the Council.

Q: Will residents and business owners be able to review the Request for Proposals?
A:
Yes. The draft will be available for public comment prior to being released for distribution to interested real estate developers.

Q: How can the community stay informed about the process?
A:
The Harper Court Arts Council will use the TIF meetings to report to the community and provide a public forum for continuing discussion.

Q: How does Harper Court Arts Council view the changes in the community?
A:
As our community goes through another period of residential and commercial change, the board of t he Harper Court Arts Council believes that to support our local arts organizations is an investment in the community that will complement those changes. We hope the community residents will see that the actions taken now are as appropriate to these times as the original decision to create Harper Court was forty years ago.

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As finally summarized in the Herald of July 19 and July 26, 2006 after a citizen's freedom of information request: Foundation Minutes 2003-2005 show Harper Court was actively selling and negotiating sale of the shopping center since before 2003--and considered issuing disinformation to hide it. The University was actively interested for a time, as were others, but HCt wanted over $6 million (which they say is their appraisal), buyers only offered $4.5 to $5 until JDI c. November 2003.

By Kathy Chaney

The Herald recently obtained the minutes from the 2003 to 2005 Harper Court Foundation and Arts Council [checking-Foundation only?] board of directors meetings. Those minutes confirm that the foundation had considered the sale of Harper Court before January 2003, contrary to what Harper Court representatives have said. In those minutes, it was also confirmed that the University of Chicago was interested in acquiring the Harper Court Shopping Center.

According to the minutes from January 2003, the foundation voted to approve the sale of the property and formed a strategic committee to work out the logistics. That same month, Harper Court Executive Director Leslie Cole Morgan produced an informal appraisal of the property, which indicated the value of th property was between $4 to $5 million.
[ed.-not the $6.5 it said more recently was the value and what JDI was going to pay. Why the jump?].

In March 2003, the university expressed an interest in bidding for Harper Court and the board decided to wait and hire a broker until a bid was submitted. Also in March, the board explored "preparing a statement regarding why we are not selling Harper Court" and discussed the importance of keeping the sale of the court under wraps until and agreement might be made with the U. of C."

In the April 2003 minutes, Foundation Board President Paula Jones informed the board that she and Rose Nayer, another board member, were scheduled to meet with Hank Webber, the university's vice president of community and government affairs, and Jo Reizner, the university's vice president of real estate operations, "to discuss purchasing Harper Court."

Then in December 20o3 minutes under "Board Issue," it was stated that the board retained an attorney to respond to the university's proposed offer and represent Harper Court. Jones reported in June 2004 that "Hank Webber seemed upset that we had hired our attorneys to represent Harper Court Foundation" and asked for another extension. The board felt the university was stalling and agreed to have its attorneys "make discrete overtones to known developers that they thought might be interested in our properties. We are now open to any offers."

By September 2004, the board had no additional offers on Harper Court and had not received an update from the university since July 2004. The board felt it best to consider "a discrete sealed bid plan" and look at "the services of a commercial broker."

With still no update from the university, the board decided in January 2005 to have its attorneys send a reminder "regarding the time frame." The board's attorneys sent another reminder to the university saying "the clock is ticking," in March 2005.

Attorneys for the board said in June 2005 that "all negotiations with Mr. Henry Webber of the University of Chicago have ceased" and the university is "out of the market for Harper Court."

Although the minutes point to more than "some discussions," in an interview with the Herald this wee, Weber said, "We had some discussions with the foundation several years back but had not been interested since then."

While giving no details on the negotiations, Webber said both the university and the foundation board "couldn't agree on the value of the property."

Webber told the Herald in December 2005 that the university was not interested in buying Harper Court at that time, which the minutes confirmed as true.


In the July 26 issue the Herald clarified that the Council had early revised its estimate of value to an upper estimate of $6.2-$6.5 million, backed by appraisal from Patrick Murphy and Associates of $6.2 million. HCAC stuck to that through several inquiries and offers, with the board telling Paula Jones to hold out for $6.5. The board did have a commercial broker. The highest bid which before JDI's is said to be $5.9 by Thrush. Joseph Fried and Associates may or may not have made an offer, but apparently was not interested in paying more than $5 million, as was the University. The holdout paid off in an acceptable bid from JDI, but by that time word leaked out and in the firestorm JDI dropped out.

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