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.

Inside the Del Prado: A Photo Essay

posted by chicago pop

The old Shoreland Hotel has gotten all the attention lately, but the real jewel in the crown of Hyde Park's old hotels is, without question, the Del Prado. I'd go so far as to say it's the jewel in the crown of MAC's rental apartment portfolio, including their properties in Kansas City.

Located with views onto what is arguably some of Hyde Park's finest green space, Harold Washington Park, with commanding views to the north and west, the building's original exterior and interior decorations are better preserved and of finer quality than the Shoreland, at least in the latter's current condition.


This sunlit, mezzanine ballroom might become Hyde Park's next full-service family restaurant, with tables looking over the park. Done right, the Del Prado stands a chance of transplanting a little bit of the Drake Hotel's 20's ambiance back to the South Side.


Restoration work has already been done on portions of the Del Prado's entryway, including this grand staircase and the interior lobby.


In the penthouse are the ruins of the world-famous, speakeasy-style Chinese restaurant remembered by many, the "House of Eng." And, continuing the Drake-Del Prado connection, it's worth noting that House of Eng was originally located in the Drake until it relocated to the Del Prado in the 1960s.

What once was...

Red lacquer, orientalist fantasy

Looking to the Hyde Park Bank Building from inside House of Eng

Looking east onto Lake Michigan from the roof of the Del Prado Hotel

Exterior ornamentation

MAC rental property kitty-corner from the Del Prado, poised to be fully on the market sometime in 2010, making the corner of 53rd and Hyde Park Boulevard one to watch

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.

MAC Properties and Hyde Park -- Kansas City

posted by chicago pop

That's Not the Del Prado:
The Bellerive Hotel, Kansas City, Missouri

If and when Off-Off Campus does an improv routine touching on Hyde Park's second-largest landowner, MAC Properties, there's a one-liner they'd be foolish to pass up:

Eli Ungar: "I liked the Hyde Park neighborhood so much, I decided to buy another one."

In point of fact, things didn't progress in quite that order. Ungar's MAC Properties began acquiring residential properties in Chicago's Hyde Park at about the same time, in 2005, that it began to do the same in Kansas City's own historic Hyde Park neighborhood.

Vernacular Kansas City Two-Flats

The similarities between the two Hyde Park neighborhoods are curious. Both are linked to the larger city by a system of boulevards inspired by the City Beautiful movement. Both neighborhoods were platted in the mid- to late-19th century, and both are adjacent to smaller developments called "Kenwood." Both were annexed to their larger metropolitan neighbor after a few decades of municipal independence. Both are a mix of gracious, 19th century homes on broad, leafy streets, and taller 1920's residential hotels, with smaller 3-story apartment buildings sprinkled in between. Both are racially diverse, and both have suffered from urban decline.

And now, both neighborhoods are home to Eli Ungar's MAC Properties.

MAC's object in both neighborhoods, to quote MAC's Peter Cassel, is to develop "contemporary apartments in classic buildings." In practice, that translates into a $30 million project renovating vintage 20's transient hotels, together with smaller apartment buildings, and bringing them to market as middle-range rentals targeted at middle-class professionals.

In Chicago, examples of this strategy are the Del Prado, Windemere, and Shoreland Hotels. In Kansas City, it is the Bellrive and four similar buildings on Armour Boulevard.

The Bellerive's Casbah Room in its Glory Days

A local paper detailed the glamorous heyday of the Bellerive in the Roaring Twenties.

The ornate red-brick structure was Kansas City's fanciest apartment hotel when it was built in 1922, boasting a parade of famous guests: opera diva Ernestine Schumann-Heink, actress Mary Pickford, silent-film actresses Lillian and Dorothy Gish, contralto Marian Anderson and writer Edith Sitwall. Even Al Capone stayed there... Stars like Billie Holiday, Duke Ellington, Tommy Dorsey, Liberace, Bob Hope and Jerry Lewis performed at the hotel's swanky Casbah nightclub. Partly because of its past and partly because of its neobaroque architecture, the Bellerive made it onto the National Register of Historic Places in 1980.

That didn't keep it from falling victim to the declining fortunes of Hyde Park in general, which like those of it's Great Lakes sister, set in after World War II. It's a familiar story.

By the end of the Second World War, a profound change had occurred in the area. Many of the original owners had died or moved to larger communities, with newer addresses of quality. The large old homes were converted into apartments and sleeping rooms. The neighborhood began a long, slow decline which continued unchecked until the 1970's.

By the early 2000's, four the the five old hotels on Armour were vacant, and the Bellerive was traded from developer to developer as plan after plan fell through. The neighborhood was being polarized between affluent homeowners in the 19th century homes on smaller side streets, and the concentration of low-income renters in subsidized housing along Armour. Not long after MAC acquired the property, vandals began raiding it for copper pipe.

Renovation Underway at an Old Hotel on Armour Boulevard

By 2010, MAC hopes to have turned the situation around. Of the 3,000 plus rental units in the Hyde Park neighborhood, MAC has approximately 250 units in service, and 400 in development. The neighborhood has received MAC warmly, with neighborhood groups advocating strongly for MAC in negotiations with the Kansas City government in 2006 and 2007.

Speaking of the Armour Boulevard Hotels, a representative of the Hyde Park Neighborhood Association told a reporter in 2006, "The precedent that needs to be dumped is that this is an area for subsidized housing. These buildings need to be brought back and brought back now. Everybody agrees it needs to be a mixed-income neighborhood."*

Sullivanesque portal of a non-MAC neighbor on Armour Boulevard, the Newbern (1922)

Another representative of the Hyde Park group agreed with MAC in 2007 that the "neighborhood has maintained that the key to saving Armour is opening it to free market housing."** This view ultimately swayed city hall, convincing the relevant tax agency to wave certain fees for a 17 year period in the expectation that MAC's investment would help revitalize a centrally important part of Kansas City.

Renovated Lobby of a Hyde Park MAC Property

Stairwell of a Renovated Hyde Park MAC Property

As with Chicago's Hyde Park, MAC has made the bet that Kansas City, a growing Midwestern city with a healthy downtown just 3 miles away, home to a number of corporate headquarters, a major university, and a hospital complex, would support a growing market for middle-class renters in a neighborhood where they would add a much-needed demographic balance.

The scale is smaller in Kansas City, and there are no plans for major new developments like Solstice or the Village Center site. The neighborhood politics in Kansas City are also less convoluted, with the prominent neighborhood groups recognizing that an improvement in the housing stock -- or simply the preservation of Hyde Park's urban fabric, as opposed to clearance -- will benefit the entire community.

A MAC Building Near the Bellrive Hotel

So Hyde Park now has a sister city -- not Paris, Florence, or London, but good old Kansas City, Missouri.

* "Armour Projects Set Back. Five Building Renovations Stumble over Fee Wavers and Tax Abatements." The Kansas City Star, December 2, 2006.
** "Project to Redevelop Buildings is Revived." The Kansas City Star. February 21, 2007.

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