Tribune reports on Antheus in Hyde Park

posted by chicago pop

A decent little piece in the Tribune's business section today more or less covers the range of local opinions (including ours) on the Antheus-financed MAC-vasion of Hyde Park Kenwood. George Rumsey gets in a tart little zing, someone complains that Hyde Park risks losing its 'small town' feel, and someone else worries about the neighborhood no longer being a bastion of low-income housing. I had a number of more positive things to say in addition to the comment quoted, but they didn't make it into this short piece. Which is a sort of too bad, because - probably unintentionally - the piece comes off as Antheus/MAC vs. Everybody. 

A choice excerpt: 

This month, a small group of residents gathered at the Hyde Park Art Center to see Gang's designs.

While several praised the scale and beauty of Gang's work, some residents said they were worried that the project might alter Hyde Park's quirky, small-town feel. And others were concerned about Antheus' plans to ask the city for $10 million in financial assistance — money the company initially said it wouldn't seek. Funding would come from the 53rd Street tax increment financing (TIF) district.

"You are using TIF money for huge projects that are forcing independent business owners who have been in Hyde Park for generations in some cases to close," said resident S. Beth Thomas. "You want to make Hyde Park look like a world-class neighborhood, but my concern is the people who are being displaced," she said.

And Rumsey's little splash of NIMBY hot sauce on Eli Ungar's business lunch:

"MAC has a history of making really dumb decisions when they acquire new properties and having to back down when it's a public relations disaster," said George Rumsey, an affordable housing advocate and former president of the Hyde Park-Kenwood Community Conference.
Ungar, 44, often plays "good cop" and flies in to rescue MAC, using his affable personality to calm residents' ire. "He knows how to feel your pain," Rumsey said. "He'll say, 'Let me look at it' and calls and takes people to lunch."

Meanwhile, the Del Prado and East Park building look better and better every day, the Shoreland is kept from demolition, and the sidewalks down each side of Hyde Park Boulevard are shoveled within hours of every snow storm - not something a good number of local property managers were managing to accomplish prior to Antheus's MAC-vasion.

Herald's Chicken: Shoreland, Sutherland, Heartland, Who?

posted by chicago pop

Hyde Park Herald Headline Confuses the Shoreland Hotel with
Sutherland Apartments

This week's botched Herald headline makes us think that Dr. Seuss is running the news desk, or at least has his hand in everything the paper writes that has to do with the Shoreland Hotel: "Antheus buys Shoreland from Heartland."

Aside from being completely erroneous -- Antheus already owns the Shoreland -- this headline has the Seussian virtue of being a fun nursery rhyme, especially when you throw in the Sutherland Apartments, which the Herald habitually confuses with the Shoreland, as they did in their banner headline of September 9, 2009.

Dr. Seuss says: Shoreland, Sutherland, Heartland, Who? You said Shoreland, and Sutherland, Too!

Maybe a repeat of this gaffe twice in one year is why the Herald website is still running the July 7, 2010 issue?

Or perhaps everyone was just too giddy over the journalistic coup achieved with the wonderfully dramatic headline over Sam Cholke's banner article having to do with the preservation of the Chicago Theological Seminary in its pristine state, stained glass windows included:

Hyde Park Hyperbole, Volume 128, Issue 28

Tabloid journalism of the purest sort: behold the University as executioner, it's face hidden in the shadow of a cowl, ready to raise its skeleton arm in order to drop the axe of demolition across the neck of the old Chicago Theological Seminary building. Or, is it the CTS, which wanted to move its own stained glass windows from the old to the newer building? Would moving pieces of the building around be an execution, or just a desecration? Or, since the University's decision to buy it is the reason the building isn't going to be completely razed, perhaps the University is executing itself? Just who is the executioner, and what is being executed?

Certainly not an informative, fact-based headline.

Mr. Cholke, or whoever came up with this headline, was undoubtedly drunk with the poetic euphoria of a wildly inaccurate though colorful metaphor, enough so to botch the execution of the Sutherland headline on page 3.

The chicken at Herald's is deep fried and crispy this summer, for sure.

The New NIMBY Tower of Power: 5490 South Shore Drive

posted by chicago pop

Move over, Vista Homes: self interest has a new address

Report from the Shoreland Meeting, September 30, 2009

posted by Richard Gill

The Shoreland Hotel, built 1926

About a hundred people attended a September 30 public meeting in the Crystal Ballroom of the old Shoreland Hotel, 5454 South Shore Drive, at which developer Antheus Capital presented its proposal to resurrect the empty structure as a luxury rental apartment building. The firm’s principal, Eli Ungar made the presentation and answered questions. Comments and questions from the floor comprised most of the one-hour forty-minute meeting. Overwhelmingly, the discussion dealt with worries about parking, voiced primarily by a relative handful of residents of 5490 South Shore Drive, located immediately south of the Shoreland. Neighbors’ worries about parking and traffic tend to dominate Hyde Park meetings about development proposals.

Fifth Ward Alderman Leslie Hairston was in attendance, as her concurrence with the proposal is required before it can be brought to the City Council for approval. She said that she wanted to hear what people had to say, before she would say yea or nay.

Shoreland Hotel Driveway

When the historic hotel went into decline, the University of Chicago bought it for use as a student dormitory. The dorm was closed this year, with the opening of a new dorm on south campus. Knowing the Shoreland dormitory would be phased out, the University sold the building in 2004 to the Kenard development firm, which later sold it to developer Bob Horner. Both firms had plans for a condominium development. When those plans fell apart, Antheus acquired the property. Antheus will need to obtain City approval for a change in Planned Development (PD) No. 1062 that was approved for the prior condominium proposals.

Under Antheus’ plan, the 450,000 sq. ft. building would have 325 to 350 apartments (primarily one bedroom and two bedroom; with roughly 30 studios; and 30 three-bedrooms). The lobby area and function rooms would be retained, and a restaurant included. Antheus estimated that 450 to 500 people would reside in the building, compared with more than 700 students in the former dormitory.

Rockefeller Chapel and University of Chicago
as Seen From Roof of the Shoreland Hotel

Meeting attendees were generally favorable toward the building plan, which would include a lot of restoration work. That informal consensus left a vacuum of sorts for 5490’s complaints and worries about parking to take up most of the time and dominate the meeting. The people of 5490 said the development would worsen a tight parking situation in the area.

I state here that I like the proposed project and I believe that, at least in this neighborhood, anti-project parking arguments are mostly used in narrow self-interest, despite claims that they are for the general good.

The 5490 building, with about 20 units, has no on-site parking. The building does have a large area in back that could accommodate perhaps 20 cars. This was noted from the floor, and by Eli Ungar. In addition, Ungar repeated what he has said at every similar meeting – that a specific building project cannot solve the neighborhood’s “parking problem” and that adjacent property owners shouldn’t expect someone else’s project to solve their problems. Alderman Hairston has generally agreed with that position, adding that the parking issue should be addressed community wide, not project-by-project. That’s old news, and the tone of the audience seemed to be that they were weary of people trying to stop beneficial projects by using parking as a wedge.

Decorative Corbels on Shoreland Facade

In refutation of 5490’s prediction that parking gridlock would be caused by the Shoreland development, there were two general arguments: (1) by Antheus citing their recent experience, and (2) by people in the audience who essentially said this project is what the neighborhood needs, and parking is not the pivotal issue.

Antheus and its property management company MAC Properties have experience with rehabbed rental buildings in Hyde Park, such as Windermere House and Algonquin Apartments. They said that about one-third of renters use parking facilities on the properties, and that both properties have unused parking spaces in their lots. Ungar said they expect the Shoreland to follow this pattern. He also said that Antheus has more than 100 vacant parking spaces in its “portfolio.”

Ungar said it’s feasible to get 100 “legal” parking spaces into the building without encroaching upon the residential space. A “legal” parking place is one that meets the City code’s criteria for self-parking, in terms of square area, access and maneuvering room. The City figures a building’s “parking ratio” in terms of “legal” spaces. That in itself would meet anticipated demand for about one-third of the Shoreland apartments. However, a valet operation with staff-operated lifts and stackers would enable the garage to handle about 220 cars. In its PD application, Antheus is seeking a variance that will permit this arrangement, which will be important for accommodating function and restaurant parking, as well as residents’ needs. The condominium proposals had included parking on a one-to-one ratio (which 5490 liked), but it required a multi-story garage that would have consumed residential and public space. Antheus says the rental proposal is not economically viable if that residential space is taken up by parking.

Entrance Hall, Shoreland Hotel

Speakers from 5490 took the position that plentiful parking is necessary for property values and quality of life. Others took the opposite position, stating that walkability, density, ability to live without a car, are what make for a desirable neighborhood, and they said that many vibrant places thrive with an extremely tight parking environment, maybe because of it. Hyde Park’s good public transportation was noted. Strong statements were made about the benefits of this project (which has funding commitments despite the present economy). One speaker went so far as to say that if you see a neighborhood with plenty of parking for everyone, you wouldn’t want to live there. An owner of Open Produce on 55th Street said storefront businesses need foot traffic more than they need customer parking.

My overall take of the meeting is that most people want the Alderman to approve the proposal and move it forward. I believe she received that message. She would also like to hear individually from people.

Ungar closed by asking anybody with an alternate proposal for the Shoreland to come forward with it. Further, he said that he understands that the parking issue will continue to be prominent, and that Antheus would be pleased to commit financial support to city public parking projects in the neighborhood.

I hope very much that this project is approved in its present form. The alternative is probably a vast derelict building. Hyde Park is already saddled with two large vacant buildings—Doctors Hospital and St. Stephen’s Church. Narrowly focused opponents stopped redevelopment of these two sites. Both buildings are hulking corpses. Hyde Park cannot have another.

Antheus Capital Takes on the Shoreland

posted by Peter Rossi

Last week, Antheus Capital purchased the former Shoreland Hotel for $16,000,000. Antheus Capital owns an number of rental properties in the Hyde Park area and has two other major projects in various stages of production (Solstice in the Park (a 26 story condo at 56th and Cornell) and Village Center (a makeover of the Village Shopping Center at Hyde Park and Lake Park Blvds)).

At the current time, Antheus Capital is said to be studying the possibilities at the Shoreland. One nifty idea would be to make one wing of the massive former hotel just that -- a boutique hotel and leave the other to condos. In any event, this will be sure to draw NIMBY fire (aren't those condo owners noisy!). It may also add fuel to the "big is bad" argument (did you hear that Antheus Capital is partnering with Walmart?).

I'm delighted to see some positive movement. The Shoreland has a great location and is a grand old dame. One request please: Eli, can you please restore the portion of the cornice that was "repaired" by our dirt poor U? You know, the section in the middle with the sheet-metal covering that looks like it belongs in Naperville. But, I'm not going to threaten to vote you dry to get this. I put my trust in the profit motive - who wants to buy a condo or rent a hotel room in a building with a prominent missing tooth?

MAC & the Hyde Park Rental Revolution

posted by chicago pop

Lobby of The Blackwood Apartments

5200 S. Blackstone

One of the biggest positive transformations in Hyde Park has been happening mostly under the radar for about 6 years now.

It hasn't involved the construction of new buildings. It hasn't involved Federal grants, City tax breaks, bailouts from the University of Chicago, or neighborhood activists laying down the law.

Most of the improvements we're talking about have been behind locked doors, in the form of new kitchens, modernized wiring, newly lit stairwells, central air, and restored historical and architectural details.

Detail of Grillwork, Blackwood Lobby

Since acquiring its first rental property in Hyde Park, MAC Property Management has sunk a whopping $200,000,000 in construction costs to renovate, restore, and add to the inventory of rental units to the neighborhood. This is all apart from the two projects slated by Antheus Capital, the private equity firm and parent company of MAC, at the Solstice location and at Village Center.

New Kitchen (with IKEA cabinets and granite counters) at MAC property 54th & Maryland

In Hyde Park, the result has been a net addition of 400 rental units since 2002, ranging from one bedrooms at $900/month to 2 bedrooms at $1,400/month, depending on the size and location. On average, this represents a rent increase of $300-500/month at a range of properties, many of which had deteriorated for decades under the former ownership of K&G Building Management.

Sidewalk Lighting on MAC building at 54th and Maryland

MAC Director of Community Development Peter Cassel, who took us on a walking tour of MAC's walk-up and high-rise properties, emphasized that when MAC acquired rental properties along Cottage Grove, Drexel, or the historical art deco Blackwood tower on East 52nd Street, many of the units were uninhabitable.

In the long-forlorn northwest corner of Hyde Park, where MAC's current activity is conspicuous, a few examples stand out. At the Drexel Grand (5220 S. Drexel) only 30 of the 64 units were occupied when MAC acquired the property. The gas had been disconnected to the entire building, and the previous owner had distributed microwaves to all the tenants as a substitute for gas stoves.

New Com-Ed Poles, Power Boxes, and Wiring at MAC buildings on 54th and Cottage Grove

Shortly after MAC acquired The Blackwood (5220 S. Blackstone) the 15 story deco tower completed in 1930, the company was contacted by the FBI and informed that 59 of the building's residents were suspected of involvement in the drug trade.

Primarily for this reason, according to Cassel, the building was half-empty. Similar dynamics are playing out on Ingleside, Drexel, and Maryland, where MAC is renovating historic buildings in an area that for decades had been viewed as a lost cause by both the University and the Chicago Police.

Failed Condo Conversion in West Hyde Park
(Not a MAC Property)

On Cottage Grove, MAC is is building on the favorable geography of West Hyde Park. A cluster of 3-story walk-ups face Washington Park, offer secure parking, and direct access to CTA Cottage Grove and Garfield Lines for workers commuting to the South Loop or downtown. For medical technicians and others employed at the U of C Medical Center -- a major target for the new rental units -- work is just steps away.

West Hyde Park's Front Lawn: Washington Park (Renovated MAC buildings on either side of 54th Street and Cottage Grove)

Since the Second World War and the subsequent 60 year boom in suburban development, the market in residential real estate has operated on short time horizons. Malls, residential subdevelopments, and the familiar landscapes of suburbia were investments expected to generate returns within a 5 to 10 year period. For this reason, they were built quickly and cheaply. Decades later, it shows.

It wasn't always this way. Many of the greatest achievements of American urban building date to the pre-WWII period, when real estate was a long-term asset class, something expected to garner value over a period of several decades.

In many ways, MAC -- a private equity firm that is also investing heavily in other historic, inner city neighborhoods (such as another Hyde Park, in Kansas City, Missouri) -- represents a return to this older model of real estate investing.

One of the up sides of this model is that, relieved of the pressure to report quarterly earnings growth to anxious Wall Street investors, a company like MAC can take its time to realize a return.

View from 13th Floor of the Algonquin rental property

In MAC's case, that horizon is about 15 or 20 years down the road. Until then, MAC's financial bets are tied in part to the success of its rental portfolio, the market for which has already responded favorably throughout the neighborhood. MAC won't be flipping these properties anytime soon.

The down side is that this activity may add to the pressure for low-rent, off campus student accommodation as much as the boom for condo conversion did. K&G answered that need for many years, and it's not clear that it was good for the neighborhood as a whole.

The University and Divisions may need to take the higher rents into account when they formulate admissions and funding packages for graduate students, the biggest segment of student renters. And MAC, which has clearly gotten very big, very fast, needs to stay on top of its work orders and customer service, both of which have generated many complaints from student renters.

For the University, spending more for housing allowances to float fewer students through graduate school may ultimately be a better deal than paying for a police force to protect them in the slum conditions that have historically housed them.

Until then, MAC is rounding out the housing market for working professionals, and we're starting to see the results.

A Bull of Khorsabad Guards the Blackwood Lobby

Village Center: Poised for Development?

posted by Peter Rossi

At the corner of 51st and Lake Park Avenue, Village Center stands as one of Hyde Park's numerous monuments to poor design.

Village Center

Home to a rag-tag collection of buildings and dominated by a dirty parking lot, Village Center's only redeeming feature is the Original Pancake House. OPH exists almost to spite the other anemic tenants.

It obvious that this location is perfect for a mixed-use development. For example, a development that extends over the entire property (including the parking lot) with lower floors of retail, upper floors of apartments, and interior parking would make a great deal of sense.

The Village Center properties have been owned by Antheus Capital for more than two years. It is no secret that Antheus Capital would like develop this plot. Exact details on what might be proposed are difficult to come by (the Herald, in one of its brief moments as a real newspaper, printed a design prototype last year).

MAC Properties Sign

The wheels of development grind exceedingly slowly here in Hyde Park. Other developments such as the McMobil and Cornell and 53rd sites are dead in the water. The developer for these properties is clearly not up to the task.

This means that Village Center is the only real option for development in Hyde Park (note that Harper Court is many years in the making and probably will be hampered by law suits and community interference).

The economy in general, and the commercial real estate sector in particular, shows signs of slowing down if not a true recession. I worry that all of the fumbling of the ball on Village Center will mean that, by the time something is ready to be built, no funding will be available.

In the meantime, Village Center remains a depressing sight and an embarrassment as one of the "gateways" to Hyde Park-Kenwood.

Eye Candy at Village Center