E-mails give insight into financing, zoning process for 5150 Northwest Hwy. project
by BRIAN NADIG
E-mails obtained from the city show that the planned housing development at 5150 N. Northwest Hwy. has run into potential obstacles since the property was rezoned last May, but the developer said last week that the project is moving forward.
The hundreds of e-mails and other documents were obtained by residents through Freedom of Information Act requests to the city and then given to Nadig Newspapers.
They include messages involving Alderman John Arena (45th), his staff and a public relations consultant, and representatives of the project’s developer and the Chicago Housing Initiative, which has helped to coordinate support for the proposal. The e-mails also show that efforts were made to bring in unions and progressive organizations to testify at public hearings on the proposals.
Several recent e-mails indicate that financing for the seven-story project could be in jeopardy because the city would not commit to providing $10.5 million in financing and that without such a commitment, it may be difficult for the state to approve low-income housing tax credits, which provide a dollar-for-dollar reduction in federal income tax.
The documents show that those concerns led project developer Joshua Wilmoth of Full Circle Communities to send a message to Arena suggesting that the development could "in theory" proceed without city financing if the number of planned apartments were reduced from 100 to 60, consisting of 30 Chicago Housing Authority and 30 affordable units. The suggestion came one day before Full Circle’s tax credit application was due to the state.
The June 22 e-mail also states that the reduction in units "would likely meet the four-story height requests" of the community. Opponents have said that the building’s height should conform to the 4-story height recommendation in a master plan which covers the commercial area north of the Kennedy Expressway.
Arena’s chief of staff Owen Brugh said in an interview that the developer only briefly mentioned the 60-unit idea and that it was quickly dismissed as not feasible. He said that "no due diligence" was conducted prior to the e-mail being written.
Brugh said that applying for state tax credits is a highly competitive process and that no matter the state’s decision, there is a variety of financing options which Full Circle can explore. He said that those options include applying for a Home Depot grant which would require some of the units to be reserved for veterans and seeking assistance from the city’s tax credit or housing fund programs.
In another e-mail, the developer tells Arena’ office that another possibility would be to reposition "the development into a bond/credit transaction with more CHA units and capital dollars from the CHA."
Currently, the proposal calls for 30 CHA units, up from original plans of about 20, along with approximately 20 market-rate and 50 affordable units, which would be intended for those households making about 60 percent of the area’s median income. The CHA units, whose occupants would be recommended from the housing authority, would be intended for those making around 30 percent of the area’s median income.
Arena has pledged to bring in at least 50 new CHA units to the ward by February of 2019 to help end what he says is segregation in the ward’s neighborhoods.
Full Circle is seeking to purchase about half of the Northwest Highway site, where LSC Development is planning to build a five-story warehouse on the northern half. The project came about as part of an agreement to settle a lawsuit that LSC, which owns the parcel, filed after Arena had the property downzoned to stop initial plans to build only a self-storage facility. Arena had said that having only a storage warehouse would do little for the area’s economic vitality.
After the first phase of the project’s zoning was approved, Full Circle had to negotiate new terms to acquire the land.
"Now that they have the zoning, LSC Development has retraded our site control terms and pricing, and their current proposal tanks our ability to do the deal. Significantly, they are requiring that we purchase the land in advance of our financing awards, which we simply are unwilling to do.
"Before I provide my counter offer to them, which may be declined and ultimately lead to our walking away from this project, I wanted the alderman to be aware of the discussions, but I am also wary of getting him involved in a business discussion between two private parties," Wilmoth wrote to Arena’s staff members in a May 30 e-mail. "I am hoping you can help manage the politics of this."
Full Circle now has until mid-November to obtain its financing and buy the land, "or we lose any realistic option on the site," according to another June 22 e-mail from Wilmoth to the city Department of Planning and Development Housing Bureau.
Despite some of these obstacles, Wilmoth said in statement that he is optimistic that the development will come to fruition. "We are moving ahead with the development and are presently assembling the financing," he said.
Full Circle has not filed a zoning application for an amendment to the planned development ordinance that governs the property. Any construction would require an amendment outlining the specifics of the planned project.
Other e-mails show that school overcrowding was the top concern that opponents told those canvassing on behalf of the project last winter. Fifty-one of the 100 apartments would be three-bedroom units, and those would attract families, putting a further strain on overcrowding at Beaubien School and Taft High School, according to opponents.
"It tended to be parents with particularly young children (pre-school age) who had moved to the neighborhood quite recently, explicitly for the schools, and seemed concerned about the long-range trajectory of increasing density and how by the time their kids were in elementary school (sometimes three-plus years away, or high school sometimes 10-plus years away), they felt very uncertain about how the school crowding issues would be then," one of the canvassers reported in an e-mail.
The e-mail also states that concerns that the building’s occupants would worsen crime in the area were less prevalent than "we feared," while other e-mails show that housing advocates were appalled by the "hate" rhetoric and "mob energy" outside a local church where Arena held a Feb. 9 community meeting on the proposal.
Brugh said that efforts would be made prior to tenants moving into the building to collect data on which schools their children would be attending. He said that the data would help school administrators with their planning and that efforts to find additional ways to relieve overcrowding are continuing.
Brugh added that enrollment at Beaubien appears to have "crested," as enrollment has declined slightly the last two years. Last year’s enrollment was 1,098 compared to 1,117 in 2015, with a projected enrollment of at least 1,035 this fall.
The e-mails also reveal a glimpse of how the proposal could affect Arena and other area politicians, as having state Representative Will Guzzardi (D-39) speak in favor of the project at the Feb. 9 meeting was ruled out.
"I don’t think that putting other elected officials in the line of fire is best. While I love that he is willing to stand with us, if Will speaks for it, it will beg the question of (Representative Robert) Martwick and (Senator John) Mulroe on where they stand. I do not want them to have to answer that direct question. 1) they have no vote on it and 2) they have to go to voters in north precincts before I do.
"Also, there are very few hearts and minds that change at these meetings. This is an advisory meeting to help (guide) how this might be improved or amended. I know it is a lot, but I hold hope some will be ready with thoughtful inquiry and input," Arena wrote in a Feb. 6 e-mail.
In the Jan. 27 settlement agreement, Arena signed a legal document requiring him to support rezoning the site for the warehouse and an unidentified, multi-family development. News of the settlement agreement came out after the community meeting in February.
A group of property owners later filed a lawsuit challenging the settlement agreement.