Chicago's mega-project

by Kate Hawley

Massive developments build community, parks and more alongside new homes

Most Chicago neighborhoods grow and die piecemeal – old buildings get new uses, condos sprout as shuttered storefronts slide into decay. Change happens a few lots at a time, the identity of neighborhoods forged by the advance and retreat of myriad competing interests.

But if you drive east on Roosevelt Road and turn south on Halsted Street, this accidental city suddenly falls away. Shops of the same style and vintage appear en masse. Newly minted brick condos and townhouses with landscaped lawns extend as far as you can see – nearly three full blocks to the south – as if a master chef whipped up a batch of raw dough and cooked an entire neighborhood fresh.

This is pretty much what happened. The development team Mesirow Financial Real Estate, Inc., Harlem Irving Companies and New Frontier Companies are building just shy of 900 new homes and 120,000 square feet of retail space at University Village, on a site abutting the University of Illinois at Chicago campus just west of the Loop.

The project is one of about 10 massive mixed-use developments underway in Chicago. All builders face steep challenges, but the creators of these mega-projects have to do much more than conceive and develop a successful residential project.

They must plan and oversee multiple projects within the new community, often by multiple developers or co-developers, and make sure that the mix of various phases and housing styles complement each other. They have to build new infrastructure – streets, sidewalks, sewers, lighting, parks – coordinating with the city. They typically must deal with retail as well as residential, and they have to consider how their mini-neighborhood fits into the fabric of the larger neighborhood, often building relationships with local schools – and sometimes aiding in the creation of new ones.

More than size

What makes a mega-project? Size is only part of the equation. The Chicago Spire, the twisting tower planned in Streeterville by Dublin-based developer Garrett Kelleher, is plenty big at roughly 1,000 units. Cityfront Plaza, another Streeterville development, will ultimately include three high-rises with condos, retail and hotel rooms. But a few tall buildings, no matter how much they increase the density of a neighborhood, don’t reshape it in quite the same way as a development that reclaims a big swath of land.

University Village, Lake Shore East, Central Station and The Roosevelt Collection are massive private projects that fill that bill, ranging from about 1,000 to as many as 8,000 units. Six more mega-projects are getting heavy public subsidies as part of the city’s overhaul of its public housing system. Parkside of Old Town, Westhaven Park, Roosevelt Square, Legends South, Park Boulevard and Oakwood Shores are among the largest developments replacing troubled Chicago Housing Authority projects with mixed-income communities. They range from just under 700 to more than 3,000 units.

For the most part, sales have been brisk at these developments. “They have the ability to outperform the rest of the market because they can achieve significant economies of scale in their marketing program, says Gail Lissner, vice president of housing analyst Appraisal Research Counselors and a columnist for New Homes Magazine.

“They also have the ability to transform a neighborhood, she says. “They can achieve critical mass much faster than a stand-alone project.

Home on the rails

It’s rare for an American city to have so many large, mixed-use projects underway in or near its downtown area. This is in part Chicago’s legacy as a national railroad hub, “Player with Railroads and the Nation’s Freight Handler, to quote Carl Sandburg. As the rails faded, vast rail yards and open tracts of land sat vacant. Much of this land faced severe infrastructure challenges, and since downtown was depressed and people were leaving Chicago in droves, residential redevelopment was an unlikely option.

The first of the recent wave of downtown mega-projects, Dearborn Park, was built not because homebuyers were clamoring to live in the Loop, but because the city’s business elite feared what might happen as poor, predominantly African-American residents of South Side pushed north into what looked like a dying downtown.

The design was insular, almost fortress-like, with a density that, by necessity, was much lower than originally envisioned. Still, despite its modest (some would say cynical) beginning, the homes sold and the project helped create a new vision of the possibilities for living downtown. Dearborn Park paved the way for Central Station, which sits on 80 acres once owned by the Illinois Central Railroad directly south of Grant Park. The site sat empty for nearly two decades. “With the deterioration of the South Side over time, very few people had a cause to be down here, says Timothy B. Desmond, president of Central Station Development Corp., a partnership between Fogelson Companies and Forest City Enterprises.

Desmond’s team bought the property in 1989, encouraged by a spate of loft conversions in the area. It imposed the city grid, extending Roosevelt Road and Indiana Avenue, and divided the site into sub-neighborhoods. The first of these, Prairie District Homes, includes about 1,200 homes and is almost completed, Desmond says. Museum Park, developed through a partnership with The Enterprise Companies, has built all but 1,000 of its 4,000 homes, Desmond says.

“In this market, we’re selling anywhere between four and seven units a week, says Ron Shipka, Sr., principal in The Enterprise Companies. “I think this is pretty reflective of what happens in the creation of a neighborhood. People just get more excited as these places create their own synergy.

A third sub-neighborhood of Central Station is in the planning stages. It’s zoned for as many as 3,000 units, Desmond says. When Central Station wraps up, he estimates that it will include 7,000 to 8,000 new homes.

Lakeshore East, Magellan Development Group’s community of 16 buildings (most of them high-rises) under construction between Millennium Park and the Chicago River west of Lake Shore Drive, was also owned by the Illinois Central (although the 28-acre site, land leftover from the never-completed Illinois Center development, was subsequently used as a nine-hole golf course).

The project is about a third of the way complete, according to Tricia Van Horn, vice president of marketing for Magellan. Aqua, the high-rise designed by Jeanne Gang that is the project’s architectural centerpiece, broke ground in February, and the Parkhomes, townhouses and stacked condos that will ring Lakeshore East’s central six-acre park, were slated to break ground in early May. Prices at Lakeshore East’s Aqua ranged at press time from the $650s to $2 million. The Parkhomes started at $1.5 million.

Chicago’s railroad history is also in evidence at University Village. In the mid- to late ’90s, the University of Illinois at Chicago sought bids to revitalize the areas south of campus, many of which were succumbing to blight, recalls Vincent Forgione, University Village project manager. Railroad lines ran through the site – and through two mid-rise buildings, which served as warehousing and loading stations for freight trains. When converting these buildings to lofts, the developers preserved the columns that supported the tracks as lobby decorations.

A new income mix While some mega-projects owe a debt to the city’s industrial past, others stem from the widely acknowledged failures of Chicago’s public housing. In 2000, the Chicago Housing Authority announced its $1.4 billion Plan for Transformation, which is replacing troubled projects with mixed-income communities. These developments aim to integrate public housing residents with buyers and renters of affordable and market-rate housing. The public housing units are scattered throughout the sites, indistinguishable from market-rate or affordable homes.

These new communities are dominated by low-rise housing (with a few mid-rises in the mix) and are meant to mirror thriving Chicago neighborhoods. Traditional street grids break up the old “super-blocks��? that were hard for police and city services to access.

“We used Chicago very much as the model, says Kevin Hardman, vice president of development for Kimball Hill Urban Centers, which along with Holsten Real Estate Development Corp. and the Cabrini-Green L.A.C. Community Development Corp. is developing Parkside of Old Town.

The development’s nearly 800 new homes, with market prices from the $260s to the $830s, will fill eight square blocks, bounded by Larrabee, Division and Oak streets and Seward Park, on the edge of Old Town. Parkside is one of several developments, including North Town Village, an earlier project by Holsten and partner Kenard Corp., replacing the CHA’s notorious Cabrini-Green projects.

“Large sites mean the opportunity is even better to create places to emulate what we all love about Chicago, Hardman says.

Striking a balance

For mega-projects replacing public housing, diversity is a public mandate – even, for some, a moral imperative. But other mammoth developments also have to keep economic diversity in mind to reach a broad swath of buyers, though the range is not as sharp as at the CHA redevelopment projects.

“We decided early on that the only way to do it was to have a mix of products – to have both rental and homeownership on the same site, says James Loewenberg, co-CEO of Magellan Development Group (Lakeshore east will also have about 200 hotel rooms).

Shipka agrees, arguing that Museum Park is a “pure, good, Chicago mix, with condos priced at press time from the $250s to the $2 million range (those prices were significantly lower when the development first got off the ground, he adds).

Given the number of units the market must absorb at just one of these projects, diversity of housing is key; none of these could succeed appealing to a narrow market niche. But creating a sense of coherence – making mega-projects places where people can form connections and feel at home – is equally important, developers say. In Hardman’s view, such bonds are formed “organically and through chance encounters, which can be facilitated by good design.

In an urban environment, a true sense of community also means integrating the project into the larger neighborhood rather than focusing solely on connections within what could evolve into an insular subdivision.

Many projects have formed relationships with local schools. For example, Granite Development Corp. gave about $10,000 to Donoghue School, the University of Chicago charter school on 37th Street – a short walk from Granite’s planned 3,000 new homes at Oakwood Shores on the mid South Side. And Magellan Development Group hopes that a new public elementary school will be built as part of Lakeshore East. “The mayor has made a very strong and absolute commitment to it, Loewenberg says.

The village green

All of Chicago’s mega-projects include open green space. Whether at The Park at Lakeshore East, the to-be-redeveloped Metcalfe Park at Legends South, or the string of pocket parks Forgione calls University Village’s “green necklace, outdoor space is another crucial element both for new-home buyers in these communities and for nearby residents who see new parks as assets contributing to neighborhood growth.

Most of the mega-developments also have a commercial component, from small-scale retail such as dry cleaners, convenience stores and boutiques to major grocery stores, cinemas and national retailers. Retail is the central selling point at The Roosevelt Collection, a 14-acre mixed-use project on a site bounded by Roosevelt Road, 9th Street, Wells Street and the Metra tracks, according to Jordan Cooper, director of sales for the project.

The first phase is the 342-unit Lofts at The Roosevelt Collection, loft-style condos priced from under $300,000 to the $650s (a second phase includes a 600-unit-plus high-rise). Developer Centrum Properties is building what amounts to a fancy mall, including a string of high-end shops and a 16-screen movie theater lining a wide pedestrian walkway.

The challenge for projects of this size is to create a sense of human-scale livability – a goal the city has long strived for. “One hundred to 120 years ago, the North Side of Chicago was developed just like this – whole blocks at a time, Hardman says. “How did they create a sense of community?