The first two were designed to educate neighborhood attendees about the basic concepts and parameters affecting real estate development in the corridor, and to help illustrate positive correlations between such factors as density of households and the viability of urban retail districts.
Overall, the workshops were well received, drew input from a wider demographic spectrum of Hyde Parkers than the typical and impressionistic "community meeting", and demonstrated a broad consensus on the demand for improvements in the neighborhood's retail offerings liveliness.
The workshops also gave grounds for a cautious optimism regarding public acceptance of the need for higher residential density as a prerequisite for the commercial revitalization of Hyde Park.
People aren't necessarily opposed to getting dense, if it's done right and the economic necessity of doing so is made clear by running the numbers on possible projects. This is exactly what the third and final visioning workshop set out to do: illustrate the limits within which any urban development project is economically feasible by highlighting the economies of scale that come with density.
Reviewing the various development concepts from the November 15th workshop, it's clear that the facilitators tapped a rich well of creativity in the participants. Most of the concept proposals -- for the McMobil lot, the Dorchester Commons strip mall, and Harper Court -- are interesting, and some are attractive.
Unfortunately, none of them is economically feasible. It seems that while Hyde Parkers may be growing accustomed to the idea of density, none of the workshop proposals was dense enough to offer the kind of return that would attract a real-world developer.
Even with up to $6.2 million in subsidies from the 53rd Street TIF fund.
Workshop participants used blocks and a map to mock up a development proposal which they then gave to some real estate people who crunched the numbers then and there.
The chart below lists the development concepts that were graded as feasible, i.e., not money-losing. Of the 8 concepts that made this cut, only 4 of them would have generated any profit for a developer, and none of those came close to the threshold of 15% return on investment that was used as the no-go line beneath which few developers would risk their money.
The affordable housing requirement for TIF districts is a Chicago ordinance, and Alderman Preckwinkle is firmly committed to it. It's laudable, but in order to make it attractive for the kinds of projects Hyde Park needs, we need bigger subsidies from somewhere, or a tolerance for still greater density to offset revenue from the sale of below-market rate units.
The market value of land in Hyde Park is a vaguely mysterious subject, as there is so little of it, traded so infrequently, with so much owned by the University of Chicago, that it is hard to know if the going rate is really $75/sq. ft as the workshop proforma assumed.
A perusal of values for a standard-size, 3,100 sq. ft. vacant lot in the areas immediately west and south of Hyde Park puts them around or below $35/ft.sq. The few lots in Oakland/North Kenwood are in the $55-60/sq.ft. range.
But in order to find comparable $75/sq. ft. prices, I had to venture north to Bucktown and Edgewater, where this number represents the lower end of the range. Is this really what the McMobile lot or Dorchester Commons are worth?
One relationship that's not too clear from the document is the relationship between retail and residential space in any of the projects, and how tipping this balance either way works for or against it. For example, the most ambitious concept for Harper Court (pictured above) actually has more retail than housing units (115 to 114); this concept also resulted in the highest (7.8%) rate of return.
Likewise, two of three concepts for the McMobile site had roughly equal retail to housing numbers, and neither of them did more than break even. The question I have for our real estate folks is why McMobile #1, with 44 residential units and 10 retail, did no better or worse than McMobile #3, with 16 residential units and 17 retail.
What are we to take away from these numbers? Do we need more retail at these sites, or more density? If a 1:1 ratio works OK at Harper Court, why not at McMobile, and which way should it go at that site, or at Dorchester Commons?
And how in the world could Hyde Park support 115 new shops as proposed in Harper Court #2?
Whatever the answers to these questions, it's clear that the 53rd St. Visioning Workshops have elevated the discussion of development in the TIF District, and in Hyde Park overall.
No longer will it suffice for a few people to sign a petition and make vague protestations about what they consider acceptable or not at this or that place, based on this or that arbitrary standard.
Now we have a much better set of tools for figuring out what will realistically work at some of these sites, as challenging as it may be. We just need to figure out how make that happen.