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University of Chicago Selling Harper Court Two Months After Buying It

By Sam Cholke | March 7, 2014 12:31pm | Updated on March 7, 2014 3:38pm
 The redevelopment of Harper Court officially opened in November to praise from officials and neighbors.
Harper Court Ribbon Cutting
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HYDE PARK — The University of Chicago announced plans Friday to sell the Harper Court development two months after purchasing it for $98 million.

“It was never our intention to be the long-term owner of the property,” said Calmetta Coleman, a spokeswoman for the university.

The university purchased the development, which includes a 150,000-square-foot office tower leased by the university for 20 years, from Vermilion Development and JFJ Development in November.

Coleman said the university still plans to occupy the office space over the long term, but is looking for a new owner that can manage the retail and parking in the development.

“We’re confident that it will be a good investment for the right buyer and continue to be an important center for the community,” said James Hennessey, associate vice president for commercial real estate operations for the university.

The university’s purchase in November included the existing building and also the development rights to build a 425-unit residential tower. 

Coleman said the university is not selling the rights to develop the residential portion of the project project.

More than $20 million in TIF funding for Harper Court that has yet to be paid out will also be part of the sale.

The TIF money will go to the new owner of Harper Court, but the city must sign off on any sales of the property during the first five years after the project is completed, according to Peter Strazzabosco, a spokesman for the city's Department of Housing and Economic Development.

The city has not yet certified Harper Court as complete and has not started payments of TIF money, according to Strazzabosco.

Much of that TIF money is already spoken for, though.

The city committed in 2011 to supporting the project with more than $20 million in property tax revenue from the 53rd Street TIF District, but would not pay out any of the money until after the project was complete. The developers sold claims on the city’s promised payout to investors in exchange for cash up front to complete the development.

Coleman said the university has claim to the TIF subsidies right now as the current owner.

Harper Court was developed through a partnership between the University of Chicago’s real estate development arm, Lake Park Associates; Earvin “Magic” Johnson’s Canyon-Johnson Urban Fund; and Vermilion and JFJ.