McKinley Park affordable housing project near asphalt plant scrapped | Crain’s Chicago Business

With a big park across the street and strong demand for low-cost housing in the neighborhood, the proposed project at 2159 W. Pershing Road, called Parkview Lofts, held promise. But it got caught in the political crossfire between community activists, MAT’s owner and the city, which had been facing a backlash for allowing the facility to open in 2018. Now, nearly four years after filing its development plans with the city, the owner of the building and one next door, at 2139 W. Pershing Road, has had enough and hired a broker to sell them.

Parkview’s developers argued that the asphalt plant posed no health threat, citing a consultant’s study to back up their position. And former Ald. George Cardenas, 12th, who represented the neighborhood until December, supported the development.

But Marisa Novara, commissioner of the Chicago Department of Housing, caved into pressure from “environmental justice warriors,” said Tom Brantley, one of the developers. In August 2020, the Mayor Lori Lightfoot appointee rejected about $8 million in city funding for the affordable housing project.

“They just yanked the DOH funding out from underneath us,” said Brantley, president of Downers Grove-based Fifth Avenue Capital Partners. “No one at DOH pointed to anything that said, ‘Here’s why we can’t do this.'”

MAT Asphalt owner Michael Tadin Jr. did not return a phone call.

Environmental activists have pressured the city to shut down the plant over the past few years, and the city has received hundreds of complaints from neighborhood residents about odor and air quality related to the facility. Around the time the department denied the funding, city officials were already catching heat from environmental justice advocates over the botched implosion of a power plant in Little Village and the decision of scrap metal recycler General Iron to move from Lincoln Park to the Southeast Side.

After consulting with the Chicago Department of Public Health and the city’s chief sustainability officer, “DOH ultimately concluded that funding Parkview Lofts would directly contradict our mission and values due to the site’s close proximity to an asphalt plant,” a spokeswoman for the department wrote in an email. “The proposed location of the 120-unit project would diminish the quality of life of the residents due to truck diesel and asphalt odors/emissions.”

Though the DOH denied funding for the project, concerns about its location didn’t prevent the Chicago City Council from approving a zoning change for it in May 2021.

By then, the developers had moved on to the Illinois Housing & Development Authority, agreeing on a funding package with the state agency that included about $19 million in Low Income Housing Tax Credits. But in mid-2022, the IHDA pulled its funding at the last minute, citing environmental concerns.

“They used the same talking points that the city did,” Brantley said.

“Once the city pulled out of the deal, it raised some flags,” said an IHDA spokesman. “We just looked at it as not financially feasible, in addition to the environmental concerns.”

Air-quality concerns also meant that IHDA was unable to tap into a key federal program to finance the project, limiting its funding options, the spokesman said.

Fifth Avenue planned to team up on the project with Hispanic Housing Development, a Chicago nonprofit, and Code Real Estate Partners, a New York-based investor that owns the properties. Code has hired Berkadia, a brokerage, to sell the two Pershing Road buildings. An apartment conversion could still be an option for a new owner, but probably not affordable housing, said Jared Remington, Code’s founder and managing partner.

“We’re still optimistic that the property can be a very successful market-rate development” that doesn’t require public funds, he said.

Totaling 320,000 square feet, the two vintage six-story warehouses sit directly across from McKinley Park. They fill out a row of industrial buildings on Pershing Road that were part of Chicago’s Central Manufacturing District, one of the nation’s oldest industrial parks.

Situated south of Pilsen and west of Bridgeport, the area is in “the path of progress,” said Berkadia Managing Director Ralph DePasquale. He expects the two buildings to fetch a price in the mid-$6 million range.

Though the housing department has denied funding for the Parkview project, another city department is pushing to redevelop a pair of city-owned properties just down the street. Last summer, the Department of Planning & Development asked developers to submit proposals for a historic 571,500-square-foot warehouse at 1769 W. Pershing and a property next door, at 1717 W. Pershing, that the city uses as a vehicle-storage facility.

In January, the department picked proposals from three development teams for the properties. Two of them include mixed-income housing. A group including Brantley also proposed housing for the properties, but its plans didn’t make the cut. The planning development is hosting a community meeting on the three proposals at 6 p.m. tomorrow.

The city properties are about two-fifths of a mile east of the asphalt plant, not as close to it as Code’s buildings are. They are also directly across the street from a residential neighborhood.

Brantley, meanwhile, hasn’t completely written off the Parkview Lofts project. With Lightfoot’s loss in the recent election, there’s a chance that housing officials appointed by her replacement could be more receptive to the development, he said. He would at least seek a meeting with them.

“As far as the project goes, it certainly does not have potential under the current administration,” Brantley said. “With a new administration, it might.”

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via rk2’s favorite articles on Inoreader

March 6, 2023 at 11:28PM

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