May 2008 53rd Vision report. 53rd Street. TIF home. TIF Council reports and minutes. Development home. Harper Court home. Harper Ct. RFP. http://hydeparkprogress.blogspot.com/2009/01/developing-in-hyde-park-its-hard-and.html.

From 53rd Street Vision Block Building Exercise Workshop Report-including Draft Report on November 15, 2008 Block Building Workshop Report, 1/12/09

 

(Distributed separately by Irene Sherr January 20, 2009):

Observations [about the November 15 Block Exercise]:

1. Groups only had about 15 - 20 minutes to generate a scenario, test it, revise it etc. before they moved onto the next site.

2. The purpose of the workshop was to generate a quick sense of the rough parameters needed for a viable project. The same model was used for all of the sites.

3. The model and the workshop did not give participants the opportunity to refine a scheme further by varying unit size, program elements, construction costs, sale prices, etc.

4. Harper Court appears to be the site with the greatest potential. The scenarios produced the most promising results there. This may suggest that projects need to be of a certain size to be viable.

5. Successful projects are clearly possible but will mostly likely need more density and/or more subsidy or bigger sites.

6. The community knows a lot more about likely development than it did before, and will be more educated consumers.

7. Developers who participated in the various workshops enjoyed the process and workshops, were impressed favorably by the community and many expressed a desire to pursue development opportunities in Hyde Park .

Next steps: there will be a final report prepared by CMAP that synthesizes the work of the three workshops and comments from developers that were made at the January 12, 2008 meeting.

All documents are available from www.vision53.org. Hyde Park Progress has a recent post about the workshop: http://hydeparkprogress.blogspot.com/2009/01/developing-in-hyde-park-its-hard-and.html.

Irene

Irene Sherr, Community Counsel, 5100 S. Hyde Park Blvd., Chicago Il 60615
773-324-8614

isherr@communitycounsel.com
www.communitycounsel.com

 

How Did We Get There?

General observations:

December 8, 2007 Vision Workshop I (used pda's and maps to answer:)

May 3, 2008 Vision Workshop II (breakouts and walk about on existing plus and minus)

Let's learn from the past, esp. mistakes with parking placement and low-rise
Building on strengths--what are these strengths?
Create a vibrant and attractive milieu/destination for residents and visitors

November 15, 2008 Vision Workshop III: Can we achieve our goals with the redevelopment? We played with blocks to find out.

Modeled after the Twin Cities Lisc Corridor Housing Initiative program
CMAP and MPC received training in the program, held a Corridor Development Initiative in the Lawndale neighborhood,
worked with the community to respond to the needs of Hyde Park.

 

Objectives and Thanks

Model Blocks Objectives:

1. Engage in hands on explorative development scenarios
2. Learn about the impact of different uses and densities
3. Understand the tradeoffs in development
4. Cultivate community understanding for viable development

Let's get to work:

Thanks to (for the whole vision process)
-over 400 participants
-Kenwood and Canter schools (hosts)
-CMAP
-MPC
-Eric Rogers
- Treasure Island

From the Draft: Block Building Workshop Report [January 12, 2009]

 

See http://www.Vision53.org. Prepared under Irene Sherr, Community Counsel, and Chicago Department of Planning and Development.

The exercise was held at Kenwood Academy, November 15, 2008 (and was largely attended- facilitators et al are listed at end).

The sites highlighted were: 1. McMobile, E. 53rd St., 2. Dorchester Commons, E. 53rd St;, 3. Harper Court Area, 52rs adn 53rd Harper to Lake Park Ave.

Introduction

On November 14, 2008 over 125 Hyde Park residents played with wooden blocks and experimented with their own development ideas for three sites along 53rd Street: Dorchester Commons (53rd and Dorchester), the McMobile site (53rd St. across from Nichols Park), and Harper Court and City Parking Lot (Lake Park & 53rd St.). Once a group reached agreement on a concept, Real Estate Advisors tested its viability quickly with a computer based financial model and Design Advisors quickly sketched the concept. Groups then adjusted various project components to create a financially viable scheme. This workshop was the third in a series of interactive workshops designed to help residents develop a vision and recommendations for 53rd street. Additional information about the workshops is available at vision53.org.

This document summarizes eight development schemes from the 22 schemes generated for the three sites. These eight represent what appeared to be the most viable projects.


Development Assumptions

Workshop organizers utilized data available from current Hyde Park market conditions as the basis for the assumptions in the financial model. The development advisors reviewed the assumptions within the financial model, or proforma, and the model was adjusted based on this input. The same assumptions were utilized for all three sites. It is very important that one keep the following points in mind when considering the information contained in this document.

1. The model is designed to provide participants with a general sense of the cost of development. The model was designed to bemused in a workshop setting and only includes "hard costs" (bricks and mortar) associated with the development.

2. The financial assumption utilized for this exercise are listed on the following page.

3. If this was and actual development project, costs would likely be different (higher or lower) depending upon various factors including, but not limited to: the cost of materials, land acquisition costs, labor costs, construction loans, financing costs and fees, marketing, site remediation, architectural and engineering fees, legal fees and other "soft costs", rate of return to developer, and retail and housing market conditions. The model includes some, but not all of these variables.

4. Developers consider a project's rate of return when they determine whether or not a project is feasible or worth the potential risk. In today's economic climate market rate developers usually expect a minimum of 12-15% return on their investment. Every deal is different and return requirements can vary depending on different project elements. For example, with a larger deal, a developer is more likely to assume a slightly lower rate of return (but still not usually below 15%).

In light of the statements above, please consider the figures on the following pages as "back of the envelope" estimates only. If an actual market rate developer were to took into developing a site there would undoubtedly be a significant number of additional details they would have to consider, which would impact the bottom line.


WORKSHOP OBJECTIVES

  1. Engage residents' in the hands-on exploration of different development scenarios for different sites. This is done by literally building various program alternatives from blocks and then evaluating proposals via a financial model. Through this process residents will clearly see what development concepts are financially viable for the three sites in the 53rd St. TIF district.
  2. Learn about the implications of different development uses, program ranges and densities on each of these sites
  3. Understand the tradeoffs a developer faces when considering different options (i.e. mix of residential and/or commercial uses, integration of affordable housing, surface or structured parking and public space) each of the specific sites.

Assist future development effort along 53rd and the potential developers by cultivating a community understanding toward viable development


DEVELOPMENT ASSUMPTIONS

Assumptions

Land Price (per square foot) $75

Market Sales Price (per square foot) $280

Developer Return 15%

Average Parking Space Area (in square feet) 350

Sale of Parking Spaces $30,000

Rental

Rents (average monthly) $2,000

Occupancy 95%

Expense Ratio 35%

Cap Rate 6.75%

Retail

Square Feet per Unit 1,360

Efficiency 97%

Rent $30.00

Closing Costs/Commission 6.0%

First Year Leasing Commission 8.0%

Last 9 Years Leasing Commission 3.0%

Occupancy 95%

Cap Rate 8.0%

Affordable Sales 1 Bedroom $161,500

Affordable Sales 2 Bedroom $188,000

Affordable Sales 3 Bedroom $205,500

Affordable for Sale Construction Costs (per square foot) $185

Rental Construction Costs (per square foot) $180

Condo Construction Costs (per square foot) $190

Retail Construction Costs (per square foot) $150

Underground Parking Construction (per square foot) $115

 

AFFORDABLE HOUSING IN CHICAGO

Chicago first enacted an inclusionary zoning policy, know as the Affordable Requirements Ordinance, in 2003 and later expanded it in May 2007. Alderman Preckwinkle has made it a practice to require 15% affordable units for non TIF projects throughout the 4th Ward.

According to the City's website, the city-wide policy includes the following conditions:

COST OF DEVELOPMENT: SITE PROPOSAL FEATURES

[Here are] the better performing development scenarios for our three sites.

Included in the results are"

As you can see, from the above table, none of the schemes resulting from the workshop result in a return expected to be attractive to a private developer. However with some tweaks, like greater density or different ratios of housing and retail, some of these projects could have the potential to provide greater returns. [Harper had the best returns.]

[The following set up is used: Site and scheme s#, uses u, aver. stories st, parking spaces p, total cost of the development in dollars c, eligible TIF dollars uses in dollars TIF, Percent return to developer (profits) r

McMobile 1: u mixed, st 11.5, p 63, c 20.6, TIF 1.9 m, r break even

McMobile 2: u mixed, st 4.5, p 52, c 12.9, TIF 1 m, r break even

McMobile 3: u mixed, st 5, p 70, c 18.9, TIF 718,503 m, r break even

Dorchester 1: u mixed, st 8, p 89, c 21.5 m, TIF none, r 1.1%

Dorchester 2: u mixed, st 8, p 58, c 15.5 m, TIF 534,039 m, r break even

Harper 1: u mixed, st 6, p 223, c 45.2 m, TIF none, r 4.9%

Harper 2: u mixed, st 10, p 419, c 83.6 m, TIF 6.2 m, r 7.8%

Harper 3: u mixed, st 6, p 186, c 38.3 m, TIF 3.1 m, r 2.5%

 

[ABOUT THE SITES AND PROPOSALS (visit vision53.org to see):] DORCHESTER COMMONS PROPOSALS

1322 E. 53rd St. , 33,000 square feet.

Earlier workshops participants expressed desire to see less strip malls and parking lots, so we chose one to explore redevelopment potential. It is important to note the owner of this site has not expressed any plans or interest in redevelopment.

Total number of scenarios generated: 6
Number of scenarios that were potentially viable 6; Numbers of scenarios that were not viable: 2

Proposal 1

stories 8 av, residential 54,400 sf in 40 units 20% affordable, commercial 28,560 in 21 small stores,
parking spaces 89 in a 5 story garage, 9 stories residential adn 2 retail, cost $21,5 m, no TIF, 1.1% return

Proposal 2


HARPER COURT Corner of 53rd and Lake Park, 128,000 square feet

Rationale for the selection:

This site was chosen because both the University of Chicago and the City of Chicago have expressed plans to redevelop this property. A RFQ/RFP for this site has been released.

Total number of scenarios generated: 10, Number of scenarios that were potentially viable: 4 [error: 3], Number of scenarios that were not viable: 6 [error: 7].

Proposal 1

Proposal 2

Proposal 3

MCMOBILE SITE 1410 E. 53rd st, 36,000 square feet

Rationale for site selection:
The present owner has expressed interest in redeveloping property in the future

Total number of scenarios generated: 6, Number of scenarios that were potentially viable: 4, number of scenarios that were not viable: 2.

Proposal 1

Proposal 2

Proposal 3

_______________
Special Thanks To:

Design Advisors

Andre Brumfield EDAW
Mark Schewamel, Gensler
Michelle Rademacher, Gensler
Michael Romero, Romero Design Studio

Facilitators

Amy Girst
Joanna Trotter, Metropolitan Planning Council
Joanne Howard, Metro Chicago Information Center
Kim Bolton, Metropolitan Planning Council
Lee Deuben, CMAP
Mike Spadafore, Metropolitan Planning Council
Margaret Hyuck, OWL
Stephen Ostrander, CMAP

Real Estate Advisors
Collin McKenna, Related Midwest
Kevin Augustyn, HSA
Fred Bonner, Bonheur Development
Dennis Harder, Joseph Freed & Associates
Jeffrey Greenberger, Brewster Advisors
Ben Ranney, Terra Firma
Lyneir Richardson, General Growth Properties
Peter Holstein, Holstein Development

 

The 53rd Vision Workshop was sponsored by 4th Ward Alderman Toni Preckwinkle, 53rd Street TIF Advisory Council, City of Chicago Department of Planning and Development, Coalition for Equitable Community Development, Hyde Park Chamber of Commerce, Hyde Park-Kenwood Community Conference, Interfaith Open Communities, the Chicago Metropolitan Agency for Planning, and the South East Chicago Commission.