City ups Wilson Yard subsidy to $52 million
UPTOWN Public now funding a third of development's cost
For the second time in less than a year, city officials Wednesday hiked the public subsidy for the Wilson Yard development in Uptown and now plan to spend at least $52 million on the five-acre site.
Acting on a recommendation from the city's planning department, the City Council elevated the subsidy from a previous commitment of $41.6 million. The public funds represent more than a third of the project's estimated cost of $150.9 million, in contrast to city guidelines that generally limit such subsidies to 20 percent.
Officials said the additional money is needed to rescue a retail and residential project considered vital to Uptown's future. The project has been battered by costly design changes, higher construction prices, loss of initial investors, retailers' nervousness over a proposal to regulate wages at "big box" stores and lately by lenders' reluctance to extend credit.
"We're committed to getting this project done," said planning department spokesman Peter Scales. He noted that as part of the new deal, Wilson Yard developer Peter Holsten has been required to invest more of his own company's money.
Holsten Real Estate Development Corp. will provide an additional $10.5 million in equity, bringing the total to $29.9 million. Holsten will seek $69 million in financing, $20.2 million less than needed under the previous agreement.
The developer did not return calls. Despite years of planning and debate in the community, the project has produced only one concrete change, a new Aldi food store. It replaced an Aldi that was demolished to make room for unrealized parts of the development.
Holsten's agreement with the city calls for a store occupied by Target "or an affiliate thereof" with a 382-space parking garage. Target Corp. has never confirmed plans for the site, but Holsten and Uptown's alderman, Helen Shiller (46th), have repeatedly insisted the discounter is coming.
Planned in later phases are two residential buildings, one with 80 apartments geared to low- and moderate-income families, and the other with 98 units for low- to moderate-income seniors.
The site, a former CTA repair yard, runs along the west side of Broadway between Montrose and Wilson.
Holsten's agreement with the city shows he expects to deliver the apartments at a per-dwelling cost that's 50 percent to 90 percent higher than comparable prices in the market.
Also, documents indicate that the Illinois Housing Development Authority has withdrawn a loan promise of $750,000 for the senior apartments.
The subsidy would come via a tax-increment financing district, which would provide funds from future property taxes that Wilson Yard would generate. The agreement provides that Holsten would get no more than $10.4 million in city help before he completes the Target and a smaller retail building.
At least he's got more skin in the game.
ReplyDelete"The subsidy would come via a tax-increment financing district""
ReplyDeleteThe City press corp announces that the City is subsidizing..., my ass.
Read the story an you find that it is our TIF money from our real estate taxes being thrown down this black hole.
Vampira Shiller and longtime buddy Holsten are sucking this soon-to-be corpse dry with their low income housing debacle to prevent any real retail revitalization in this neighborhood. They already taken out huge loans against future TIF real estate dollars.
Here is the problem. TIF's are supposed to generate tax increments. They gerrymandered the TIF district to have an area that has only 50% of the properties paying taxes -the rest are non-profits. Then, they spent and allocated all the TIF money to non-profit low income housing and city parking garages - none of which will ever pay taxes.
So, the only growth in taxes, ie. tax increment that this project can generate is from inflation on the few tax-paying properties in the area. And guess what? We're in a depression and home prices are going sideways.
Futhermore, the high concentration of low income housing has driven away retailers who prefer not to try to start a business in the middle of a housing project.
Holsten flunks Ecomonics 101. Or, he and SHiller - with the Dept of Planning's assistance - had no intention of ever making this retail TIF successful from Day One. I believe the latter is correct.
Surprised and disappointed that Mr. Roeder didn't include the average price per apartment under the new plan in his article. What's up with that?
ReplyDeleteINJUNCTION!!!!!
ReplyDeleteThat's the only way to say ourselves. We're paying for WY, it's time we have a voice.
David Roeder did say the per unit costs were 50 to 90 percent higher than comparable prices in the market.
ReplyDeleteWould I have liked if he had mentioned the per unit cost? Yep, but he did make the point that the costs are unusually high.(read profitable for Holsten and his investors) Outside Crain's David Roeder seems to be the only reporter interested in this.
As for Holsten putting more "skin in the game" in one sense he has and in another he hasn't. The money he has to put in directly has to go up, but the money he needs to borrow has gone down because of an increase in TIF money. The city is essentially subsidizing a larger portion of the development now. More profits for Holsten.
Simple example. Pirate Development Corporation is putting up a whorehouse. I shall call it "Spitzer Place". The original cost of the whorehouse was projected at 1 Million Monopoly Dollars with 300 thousand coming from various tax dollars, 650 thousand in loans and 50 thousand from my personal "hooker" account.
Now the cost of "Spitzer Place" has gone up to 1.5 Million Monopoly Dollars. The taxpayers are now paying 700 thousand, the loan will be 500 thousand and my investors and I will put in 300 thousand.
So now the taxpayers are ultimately subsidizing my profits even more because of the higher costs and lesser loan amounts.
Voila.
IrishPirate math is so much more fun than "the new math!" :)
ReplyDeleteI've asked this before...but, why is this much $$$$ being spent per unit? These units are not going to maintained or cared for, and soon enough they will look like most of the other subsidized housing units in Uptown do. I'm not saying we should build sub-standard housing for lower-income families and seniors, but shouldn't those that are being given this housing be expected to maintain their residences to some degree?
ReplyDeleteWe are nosing into a recession and the last I heard the city coffers weren't exactly overflowing. At a time when the city is making cutbacks and complaining about budget problems, isn't spending like this insane?! This is way bigger money than Stroger's cousin's pay raise!
ReplyDeleteThe math on this is like the hotly contested Soccer Field in Lincoln Park. The Latin School will put in the money. (hush... after the City gives it to them....hush)
ReplyDeleteAnd why not just cancel the housing project that just lost it's state funding? HUD refused to fund it in the first place. Private investors won't buy the investment banker packaged deal because it economically is a loser.
ReplyDeleteThere's no where for Holsten to go with his money-wasting project other than to the City. And of course our money wasting Dept of Housing was their to make a grab for local TIF Funds.
Pigs at a trough is all I can say, other than Oink, Oink.
The Dept of Housing need a "book end" money wasting highrise to balance it's other financial disaster at Grace and Broadway. HUD was wise enough to pull out of that and the City bought off on the new concept of project section 8.
ReplyDeleteI wonder when that highrise will ever fix the burned out windows and walls left from last year's fire? How will they get the money when the low income tenants bought their coops with 100% financing and interest only loans using their section 8 vouchers as interest payments. Who - other than our wasteful Dept of Housing will have to rescue that building with no reserves?
There was a suggesting about an injunction. How do taxpayers go about doing this? Is it even possible?
ReplyDeleteOK then a "Future Home of Target" Should be erected this week. Shiller please provide timing on this. Cost to put a sigh up should be roughly around $250,000 in Parts and Labor. This budget was provided by the Holsten and Shiller. Remeber, Holsten said he would put a sign up even if Target fif not. Translation, we will go this far to trick the taxpayers paying for this corrupttion. Daley, you are an asshole
ReplyDeleteRoeder is wrong about one thing - Target has surely confirmed their place in the development. The company spokespeople are all over the place saying that.
ReplyDeleteI have asked this before but could someone please explain the rationale behind Target and the low-income housing? I accept that there is a demand for low-income housing in Chicago and that it is Shiller's issue, but what is the economic development argument behind creating a TIF for this purpose?
ReplyDeleteThe TIF WAS NOT created for low income housing. This was something Shiller slipped in. It was originally created to bring in a vibrant retail center and mixed income housing. You can thank Shiller for the monster this has turned into. As I recall, someone posted the original vision for WY in great detail in another post a few weeks ago.
ReplyDeleteShort history on Wilson Yard all low-income housing:
ReplyDeleteAt the last community meeting on Wilson Yard where Shiller and Holsten made their last appearance, in front of an overflow crowd around 400, Holsten announced, "The housing has been changed from mixed-income to all affordable housing because the numbers didn't pencil in."
Then Shiller and Holsten spent the next year telling the media, "This housing will be for firemen, and teachers and police officers."
Then people caught on that that was another big fat lie, so they dropped that story and started calling it affordable family housing for those making 60% of the median income. What they forgot to say was 60% median income was the top and the bottom income range went down to 0%.
Oh, the the IDHA folks who were giving Holsten a pile of money published the income range. Turns out 87% of the housing was going to be for "extremely poor and very poor". Guess no one checked to see if any of the existing 6000 subsidized rentals within a few blocks of WY had any vacancies.
Target was lied to also, don't ask me how I know, but we have it straight from a Target executive who thought, "Chicago sure has it right with the mixed-income housing. It's the smart way to go"
When this executive did his research, he said, "You're right. The housing in Wilson Yard isn't what we thought it was going to be."
He went on to say, "If you really want to hold your city officials accoutable, you're going to have to go downtown and do something about it."
So that's the short story, Target is a pawn in this chess game of TIF money, pissed-off taxpayers, and back room deals that stink.
UU, If you have the ablity to poll, can you please poll the following. Does the current situtation in Uptown, does work towards a vote against Mayor Daley in the next election? I would the the Alderman and the mayor to know how this will effect his slowing decreasing voter base. I know for a fact it is not only in Uptown that people are already talking about getting him out of office.
ReplyDeleteWhy didn't the city just sell the property at auction for the market price? The CTA needs money anyway. Also as an environmental engineer, I bet they have alot clean-up to do, I'd assume. Only God knows what has been dripping off the trains for the last hundred years. VOC's, PCB's, petroleum, lead.
ReplyDeleteIf I remember from some wiser persons post, Holsten is somehow getting out of paying for the necessary cleanup.
ReplyDelete"So that's the short story, Target is a pawn in this chess game of TIF money, pissed-off taxpayers, and back room deals that stink."
ReplyDeleteSo why not wage a boycott against Target? Make them stand up and say they won't be used as a pawn to pull this hopeless plan together?
INJUNCTION. How can we organize this?
ReplyDeleteINJUNCTION. Yes, would someone with knowledge tell us how to get the ball rolling on this?
ReplyDeleteWe have to take control from Shiller/Daley. This much waste and lying from our government is unacceptable.
Believe me, many people have banded together to review the idea of a lawsuit. It's very expensive and the odds of having any effect were considered very slim.
ReplyDeleteHelen coyly states that the housing is for teachers, nurses, and police officers. The press and the rest of City Council don't want to conclude that she is someone who has grown very comfortable with stating very bold lies so what she says is believed. There's always the tiniest grain of truth to what she says so she can either squirm out of it or just refuse to provide any comment. These days it's getting harder to manipulate the press so she's hiding from them too.
I thought the first additional city subsidy was contingent on Mr. Holsten getting the project going by a certain drop dead date, which he failed to meet. Why is he still getting that money if he did not comply with those requirements?
ReplyDelete"Why is he still getting that money if he did not comply with those requirements?"
ReplyDeleteChicago, the city ...where rules are meant to be broken.
We could take a page from the scientologists and just file suit after suit, not really expecting to win. The real purpose would be to stall until we can get a new alderman.
ReplyDeleteAnon 7:02 PM
ReplyDeleteAfter the last election - I'll never support Daley again. He sold Uptown out in his opposition of the Big Box ordinance.
Now he could redeem himself if he pulled some strings to stop both the Wilson Yard project and Labor Ready.
"Believe me, many people have banded together to review the idea of a lawsuit. It's very expensive and the odds of having any effect were considered very slim"
ReplyDeleteWell something has to be done. Just saying we can't win is pretty pathetic.
The real purpose would be to stall until we can get a new alderman.
ReplyDeleteYou know, I'm sick of waiting. I can't sit around for another three years, watching the alderman stomp all over the neighborhood like King Kong (holding Holsten in her paw). She can do a lot of damage in three years (see Labor Ready, for one -- not content with stomping all over Broadway with her absurd Wilson Yard plan, she takes out Sheridan as well with a business that goes against everything she used to believe in).
No, waiting for the next election isn't an option. We;ve got to do everything in our power to stop her now.
Whether you think can or can't,
ReplyDeleteyou're right.
Anon 7:35
ReplyDeleteUNC (Uptown Neighborhood Council) has put some time and effort into acting as a watchdog on the toxic clean-up. More information on that will follow.
Anon. 7:35 can you please make contact with UNC by sending an email to unc.chicago@gmail.com. Please identify yourself as an environmental engineer.
I would suggest filing a lawsuit and and asking for an injection until it goes gets through the courts and all the information you would be able to subpeonea would really open the doors on the whole things and TIFS.
ReplyDeleteBut it would cost a lot of money and finding a decent attorney to go against the machine would be hard.
It can be done. How do you think small towns have kept WalMart, Home Depot & the like out of their communities?
ReplyDeleteBut it takes a LOT of time, a LOT of money & the dedication of many, many members of the community to stay the course & fight, for years if needed.
Considering I had a hard time persuading my neighbors to learn about the issues and even getting out and voting in the last aldermanic election - a task that takes minutes out of the day and doesn't cost a thing - forgive me if I have doubts about the community being able to come together and fight this the way it needs to be fought.
This is really depressing. I also don't think my neighbors really care that much. How does one actually get them to believe that this affects them? Having one out of eight households actually showing up at meetings or voting is pretty poor. No wonder Helen Shiller got re-elected.
ReplyDeleteWilson Yard is Uptown's Iraq. Gross mismanagement, lies, taxpayer fleecing, denied community input and no end in sight.
ReplyDeleteI'm beginning to think that the only thing that motivates Daley these days is extending his power. Then, the only way to reach him is to keep his boy Obama out of office.
ReplyDeleteAs much as I like Obama I wish the those opposing his lakefront land grab in Rogers Park, and his Wilson Yards ghetto plan in Uptown and his Children's Museum in Grant Park would band together and send a message. A vote for these projects translates into community-wide votes against his guy Obama in the upcoming Fall elections.
F this. I pay more taxes in Buena Park than Lincoln Parkers pay for more square footage. Nuts, and bullshit.
ReplyDeleteAnon 5:30 you said
ReplyDelete“This is really depressing. I also don't think my neighbors really care that much. How does one actually get them to believe that this affects them?”
Spell it out in dollars and cents:
A Wilson Yard that is the gateway to a vibrant, pedestrian-friendly commercial and entertainment district will add (at the very minimum) 10% to property values.
A Wilson Yard that is stacked with low-income housing and detours a vibrant commercial and entertainment district will subtract (at the very minimum) 10% from property values.
If Shiller’s plan succeeds - on a $200 thousand condo -that translates to a $40,000 loss.
In Irish Pirate math that’s a dinner with Angelina Jolie.
Whatever happened to the Open Meetings Act?
ReplyDeleteHow can they legally change the redevelopment plan without an announcement of a public meeting and without a public meeting?
"I would suggest filing a lawsuit and and asking for an injection until it goes gets through the courts and all the information you would be able to subpeonea would really open the doors on the whole things and TIFS."
ReplyDeletetaking the City to court on TIF issues is extremely rare, but in at least one case it was effective in turning back an eminent domain seizure in a TIF
one theory is the City did not want to go to discovery
Officially Screwed
By Ben Joravsky, March 24, 2006
In one amazingly dumb deal, the city stiffed a property owner, the developer who would get his land, and itself.
"Whatever happened to the Open Meetings Act?"
ReplyDeleteour home town has not altered its practices one iota since OMA passed in 1957
"How can they legally change the redevelopment plan without an announcement of a public meeting and without a public meeting?"
ReplyDeletethe 2 main docs relevant to this question are
1. the planned development (PD), which covers zoning-related isues, and
2. the redevelopment agreement (RA), which includes the TIF subsidies
the PD, passed by the City Council 1/11/05, states that the Commissioner of the Department of Planning and Development (DPD) is constrained to only making changes that are "minor, appropriate and consistent" with the purposes.
our home town's standard TIF boilerplate includes a clause which authorizes the Commissioner of DPD to make changes as long as the developer agrees in writing
so one issue is whether the changes are reasonably within the Commissioner's discretion
in any case the City will claim the 2 amendments to the RA went before the Finance committee & City Council and that was a public process of sorts
if you understand the distinction between the overall plan for a TIF district and the plan for a particular TIF project in that district, Illinois TIF law requires the City to hold a public hearing if they change the district plan to suck more property taxes out of the district, but not to give more money to a project
ReplyDeleteThere is a lot of whining going on here with no real/realistic alternative plans or suggested actions put forth. It's amazing that anything ever gets done in this town. The project is moving forward no matter how many underinformed opinions and half-truths are spewed. Time to move on and let the project move forward, people.
ReplyDelete"Time to move on and let the project move forward, people"
ReplyDeleteYeah, we've all been waiting several years for this to happen anon, but the alderman and the developer can't get their shit together to make it happen.
thanks for the call to inaction
ReplyDelete