Chicago’s Best New Homes
The experts choose the top city developments of 2004
It’s easy to get jaded reviewing new residential construction in Chicago. Development, like most fields, is dominated by mediocrity, and most of what gets built is at best unremarkable. What a surprise, then, in naming Chicago’s best new homes to find ourselves struggling in a number of categories not because candidates were scarce but because there were too many from which to choose.
As the boom in new construction grew during the ‘90s, money was plentiful, and even second-rate projects often sold out before they were completed. Lenders since have become more discerning, tightening the money supply and in many cases raising the number of units a builder must sell before construction can start.
This has been something of a weed out process, and while some developers now struggle to sell the last of their units, others with the right product, price and location are seeing swift sales. Fewer new developments have come online during the last year as builders concentrated on existing inventory, but buyers have an array of interesting projects to peruse, especially when it comes to condos.
In the category of best new mid-rise condo, New Homes chose Metropolitan Development’s Rainbo Village, as much for the scope of the two-acre development and its likely impact on the neighborhood as for the forward-looking design of its new construction “loft” and condo buildings.
Rainbo Village
Chicago’s best new mid-rise
Metropolitan Development Enterprises inherited a number of advantages when it bought the site of the former Rainbo roller ink, at 4836 N. Clark, in Uptown. Sites as large as this one—more than two acres—are hard to come by in neighborhoods as dense as Uptown, and the expansive grounds of St. Boniface Cemetery across the street will give residents a quiet buffer of green in an otherwise bustling location.
Still, it would have been easy to bang out the kind of cookie-cutter faux Victorian units that have scarred so many Chicago neighborhoods during the last decade. Instead Metropolitan and architects Pappageorge/Haymes have created a tasteful site plan that includes a variety of units, an open courtyard and 15,000 square feet of sorely needed street-level retail on a sparse stretch of Clark.
The condo buildings mix brick, metal and glass for a contemporary look that will change the profile of a key stretch of Clark. The metal banding expressed through the canopies and decorative panels creates a horizontal emphasis and unit in front, while the brick adds warmth. Glass that starts at floor level and rises about nine feet in the front “loft” buildings will flood the condos with light and turn a friendly face to the neighborhood. The 88 loft-like units in the two buildings fronting Clark also have exposed concrete ceilings, exposed ductwork and track lighting, while the more traditional condos inside the courtyard will have dry-walled ceilings and concealed ducts. 
At press time, remaining condos started in the $230s and the townhomes were priced from the upper $500s to the upper $600s.
--as printed in New Homes/Home News 
June 2004
Boomers Breaking the Supply Chain

Empty-nesters stay put
Developers get creative to find multifamily sites
Demand for condominiums and townhomes is building in the suburbs, but a corresponding supply isn’t.
Some inner-ring suburbs are so filled out that developers are having trouble finding property for multifamily units. That shortage translates into fewer options for prospective buyers, especially aging baby boomers who want to downsize from their three-bedroom houses by don’t want to leave the community. Many of these empty nesters are staying put because they can’t find suitable multifamily units.
A higher concentration of older residents has converted some suburbs into naturally occurring retirement communities, reducing available housing stock for younger families that need more space. The number of people 65 or older jumped 32% in Arlington Heights between 1990 and 2000, and 17% in Morton Grove.
The numbers are expected to increase in the Chicago metropolitan area, making the shortage more pronounced. The Metro Chicago Information Center, a not-for-profit research and consulting organization, projects at 40% jump in the number of people 60 and older by 2020, as more seniors stay in the area rather than retire to the Sun Belt.
These older residents, along with young professionals, have created a vibrant multifamily market. “I see a very strong demand for condos in the suburban market,” says Paul Hardej president of Metropolitan Development Enterprises in Skokie. “It is more competitive and more difficult to find new sites. We’re constantly looking.”
Demand is especially high in the north and northwest suburbs along major transportation corridors and commuter trains, developers say. From Schaumburg to Palatine and Des Plaines to Highland Park, buyers are eager to move into condos and townhomes with easy access to Chicago.
Offices in Morton Grove focused on the Metra rail station when they created a tax-increment finance (TIF) district in 2000 to encourage multifamily housing. Morton Grove-based Elliot Group Inc. is redeveloping a 250,000-square-foot former industrial site in the district, building more than 300 condominium and townhome units that are being marketed to a wide spectrum of buyers, including older people.
“That has opened the single-family housing stock for young families,” says Tim Angell, Morton Grove’s economic development director.
Mark Elliot, president of Elliot Group, says he’s always looking for available property, especially in “transit-oriented sites” near train lines and highways. “These are areas where people are paying a premium to be.”
Developers have to get creative. “You can’t limit yourself to particular kinds of sites,” Mr. Hardej says. He noticed an old 36,000-square-foot retail building in Skokie last year that he envisioned as a condo project. “I was just doing my homework and driving around myself and thought that was a good corner,” he says. “The property was never on the market, and we approached the owner. A lot of property owners are sitting on land and don’t even realize how valuable it is.”
Mr. Hardej bought the property and is developing 61 condos priced at $185,000 to $500,000.
Like Mssrs. Hardej and Elliott, other developers are reworking infill sites occupied by commercial or industrial buildings. But he cost of demolition and environmental cleanup can drive construction costs so high that the project isn’t feasible.
“it’s harder and harder to find multifamily sites that can be developed and produced at a cost that makes it worth it,” says Daniel K. Star, Illinois division president of Dallas-based Centex Homes, a subsidiary of Centex Corp. “Those little nuggets show up every now and then, but it could take three, four or five years to turn those properties around. There’s a huge time and money commitment to go after one of those.”
Mr. Hardej thinks he has a nugget at the site of a former gas station in Winnetka, He’s developing a 10-unit condominium project that required the removal of underground gas tanks and the contaminated soul, but he thinks the cost will be offset by the prices of he luxury units, $324,000 to $699,000.
Whatever the type of property to be used, municipal governments are concerned about adding density and congestion.
“During the past several years, multifamily has been harder to get zoning (for),”j Mr. Star says. “Building codes, density, the price of land all impact the market.”
“Many communities are fearful of allowing multifamily housing,” says Barry Schain, a managing principal at Next Realty, LLC in Northfield. “Now, if you want to build, you have to compromise and develop mixed-use properties.”
Indeed, developers may need to reconfigure their plans to gain approval, as suburbs try to balance their multifamily housing offerings—meeting the needs of older people and younger families looking to buy, and providing affordable rentals.
The Highland Park city council recently passed an ordinance requiring 20% of new multifamily housing construction with five or more units to be within reach of a family of four with an income of $56,500 to $90,000.
Some suburbs have encouraged multifamily housing developments as long as they’re consistent with community plans. Arlington Heights supports downtown redevelopment that offers high-rise and multifamily options for people of all ages and income levels.
Arlington Heights May Arlene Mulder says the goal is to accommodate longtime residents while diversifying the community. “The idea was to keep a variety of choices at different price levels,” she says.
:I wouldn’t necessarily call us developer-friendly, but we’re willing to partner with the private sector to work with them,” says Mr. Angell. “We’re willing to help a developer through the process with the TIF to reuse property that is dilapidated and blighted, but it’s not like we’re going to just rubberstamp it. We’ll do due diligence.”
Even when a suburb supports multifamily development, the high upfront cost is a deterrent. “You’ve got to be a major regional or national developer in order to play at the table,” Mr. Angell says. “Land assembly is the second part. You’ve got to have enough acres assembled to make it work.”
--as printed in Crain’s Chicago Business
September 29, 03
 
Media Contact:
Nellie Donovan
Metropolitan Development Enterprises, Inc.
mail to: nellie@metropolitan-us.com