Panel okays $1 firehouse sale; Ald. Tunney challenges city’s claim that Copernicus plan wouldn’t generate property tax revenue

by BRIAN NADIG

The Chicago Plan Commission at its Sept. 17 meeting approved the sale of the former Jefferson Park firehouse, 4837-41 N. Lipps Ave., to local developer Ambrosia Homes for $1, as a city official argued that the $300,000 purchase offer from the Copernicus Foundation would be negated by the nonprofit not paying property taxes on the land — an assertion which the foundation says is not true.

City Department of Housing project manager James Wheaton told the commission that over the long-term the city would make up the “one-time purchase price” of $300,000 because the proposal by Ambrosia, which calls for a brewery and nine apartments, would put the city-owned property back on the tax rolls, generating property tax revenue for the city, while Copernicus, a nonprofit agency, would be exempt from paying taxes.

Commission member Alderman Tom Tunney (44th) later questioned Wheaton’s assertion. Tunney said that given that Copernicus’ proposal includes a for-profit restaurant, it would have to pay property taxes on the land. Copernicus’ proposal calls for a restaurant on the ground floor and four apartments on the second floor.

Tunney said that he is familiar with nonprofit hospitals which must pay property taxes on a portion of their land because they lease space to for-profit doctor offices.

A Copernicus spokesman said after the meeting that the foundation would be paying taxes on the property and that a letter to a commissioner explained that under the foundation’s proposal the property would be put on the tax rolls. “We 100 percent intend to fight this (decision),” a foundation spokesman said.

It was difficult to determine the actual vote count due audio issues with the live video feed of the meeting, but there were about a dozen votes in favor of selling the firehouse to Ambrosia and two or three votes against. Commission member Alderman Gilbert Villegas (36th) was one of those voting against the sale.

Another alternative proposal for the property was submitted by the Carpenters Local 58, which offered $1 and proposed to relocate its offices to the second floor of the firehouse and to lease out the ground floor. The union is not exempt for paying property taxes, according to Local 58 financial secretary Ian Main.

The union is financially strong and can afford to rehab the firehouse, Main said.

The city only recently advertised for alternative proposals for the firehouse, as it has been negotiating with Ambrosia for several years.

Wheaton told the commission that in 2019 Ambrosia provided the city with a letter of intent from Lake Effect Brewing, 4727 W. Montrose Ave., to move into the ground floor and that Ambrosia plans to restore “as much of the exterior (of the 114-year-old structure) as possible” but that an agreement on the planned restoration is not in writing. “We don’t have a contract yet,” he said.

Both the union and foundation have said that they also would be restoring the façade. Both also said that they bidding process was unfair in part because they were denied entry to the building, and the foundation says it can finance the project and will be responding to Wheaton’s statement that the pandemic could hurt the foundation’s financing given that much of its revenue is from events and room rentals.

The city never conducted a public request for proposals for the firehouse, but as part of the Community Development Commission approval process for negotiated sales, the department was required to advertise for  “alternative proposals” before it can finalize a deal with Ambrosia, which offered $208,000 for the property, according to the department. That also is the appraised value of the property, and the required asbestos and paint remediation cost is projected to be about $200,000, leading to the city’s decision to sell the building for $1, according to the department.

About 3 years ago then-alderman John Arena held his own RFP for the firehouse and recommended that the city enter into a negotiated sale with Ambrosia. At the time Troy Realty, whose president also is chairman of the foundation, gave Arena a proposal but the alderman chose Ambrosia’s plan. Housing commissioner Marisa Novara told the commission that anyone could have submitted a negotiated sale application for the firehouse property during the past 10 years.

Main said that he talked to Arena about the firehouse several years ago and was told that the city’s plan to sell to Ambrosia was a done deal but that the union decided to file its own bid after reading in the newspaper that the city would be taking alternative proposals. He said that many of the union’s members live in Jefferson Park and that the union has been searching for a new home in the area for several years.

The overall cost of Ambrosia’s project is estimated at $2.5 million, and the developer has obtained approval for financing, according to the department.