Wednesday, May 23, 2007

City Set to Boost Subsidy for Wilson Yard

The city is poised to increase its subsidy for the long-delayed Wilson Yard development in Uptown to offset rising construction costs for the project, which is to include a Target store and 178 units of affordable housing.
The Daley administration agreed to raise the subsidy to $43.1 million from $35.6 million in a deal that goes before the Chicago City Council on Wednesday and would allow construction to begin no later than July. Costs for the 5-acre development are now expected to be about $150 million.
In addition to rising costs, the Wilson Yard project has endured the pullout of a movie theater and concerns that Target might walk over the controversial "big-box” ordinance.
Located near Broadway Street and Montrose Avenue, Wilson Yard includes a former CTA maintenance facility. Redevelopment of Wilson Yard has been contemplated since two fires at the site in 1996. The development, considered vital by some for the gritty Uptown neighborhood, has also been a source of controversy in an area that's become a fierce battleground over gentrification.
Since the original redevelopment agreement was struck with the city in December 2005, the project's costs have jumped 15% to $150.1 million, primarily because of rising construction costs. The administration has agreed to raise its TIF (tax-increment financing) subsidy to help offset the increased costs. The project's developer, an affiliate of Holsten Development Corp., agreed to defer some of its fees until the completion, now planned for 2009.
"It'll be a huge boost that will bring a lot of people to the area," says Peter Holsten, president of Holsten Development, who was marketing the development's retail space this week at a trade show in Las Vegas. "It will spill over and help the stores up and down Broadway."
Minneapolis-based Target Corp. has an agreement to buy its 180,000-square-foot store. The additional retail component involves moving the existing Aldi grocery store to an adjacent site, where the discount grocer is to open next week, Mr. Holsten says.
The project's residential component includes two apartment buildings, one with 80 units of affordable housing for families and another with 98 units of affordable housing for the elderly. Plans also call for a multi-level parking garage that can accommodate 382 cars and an additional 173-car surface parking lot.
Kerasotes Showplace Theatres LLC last year dropped its plan for a 12-screen movie theater, citing the high construction costs of plans to build the theater atop the Target store. Mr. Holsten says the economics of the theater didn't work, and that its withdrawal meant parking could be downsized from the original plan, which called for a 700-car garage.
The Wilson Yard project hit another speed bump last year when the City Council voted in July to mandate a new minimum wage requirement for large retailers, a move that had Target mulling whether to drop its expansion plans in Chicago.
Mayor Richard M. Daley vetoed the bill in October with help from local Alderman Helen Shiller (46th), the only City Council member who didn't vote on the original ordinance. She then voted against overriding the mayor's veto.
Ms. Shiller, whose office estimates the project will create about 200 new jobs, didn't return a call Tuesday afternoon seeking comment.
Mr. Holsten says he's confident the City Council will approve plans for Wilson Yard when it votes Wednesday, which he says would put completion at about 22 to 24 months from now.
"We've done everything the city has asked of us, so we'll be fine," says Mr. Holsten, who has also done mixed-income redevelopment projects near the Cabrini-Green public housing project. "It's going to be a good thing for the area."


  1. By the time the low-income rentals in Wilson Yard are finished, the price per unit is going to make the price of Uptown condos look like chump change by comparison.

  2. Construction costs have risen 15% for this project in 1 1/2 years? That is not the same rate that wages or other construction project have risen in the past 1 1/2 years for highrises or condos or townhouses. What are they doing? Adding gold plated faucets in all those low, very low income housing units, or just gold plating Peter Holstein's pockets with more campaign donations to Shiller?