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Why is Edgewater Hospital Still Standing? Emails Show Behind Scenes Battle

By Benjamin Woodard | October 17, 2014 5:34am
 The vacant Edgewater Medical Center, an "eyesore" in the neighborhood for years, could be redeveloped under a proposal put together by the alderman's office and the managers of the bankrupt estate.
Edgewater Medical Center
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EDGEWATER — The managers of the troubled, vacant Edgewater Medical Center wanted to demolish the decrepit buildings years ago and blamed the city for stalling the process, according to emails obtained by DNAinfo Chicago.

But city officials accused the owners of ignoring an "extremely dangerous situation" that could have lead to someone being killed.

The terse exchanges are included among hundreds of pages of correspondence obtained through a Freedom of Information Act request. They include behind-the-scenes details of the saga surrounding the former hospital that closed more than a decade ago after it entered bankruptcy and has yet to be redeveloped.

Ben Woodard pored through 200 pages of e-mails to dig deeper:

 Maurine Berens and her neighbors living near the vacant Edgewater Medical Center said the condition of the buildings continue to deteriorate, threatening the safety of the neighborhood.
Maurine Berens and her neighbors living near the vacant Edgewater Medical Center said the condition of the buildings continue to deteriorate, threatening the safety of the neighborhood.
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DNAinfo/Benjamin Woodard

For years, residents have demanded more transparency as they pleaded with the city to tear down the decrepit buildings, arguing they were not only an eyesore but also a safety hazard at 5700 N. Ashland Ave.

But many of the emails turned over by the city, including some that would reveal the views of Ald. Pat O'Connor (40th), were redacted because the city claimed they were "preliminary" or "pre-decisional."

O'Connor, who his staff said was out of the country, didn't immediately respond to requests for comment regarding the emails.

One of the more heated exchanges between the office of O'Connor (40th) and the estate's lawyer and property managers, Waveland Partners, occurred last March.

"This has become an extremely dangerous situation ... ," Chenin Kienzler, an attorney and aide to O'Connor, wrote in an email dated March 19. "We are deeply concerned that another trespasser could be injured or killed in the building, not to mention the possibility of an innocent victim being dragged in there against their will."

In 2011, two teens were injured on the roof of the former hospital after a transformer exploded.

Kienzler listed several concerns, including reports that men had entered the building through an opening under a doorway in the alley. She also noted that the security lights were out in behind the buildings, making the alleyways "completely unsafe to walk through."

Edward Polich, co-founder of Waveland, responded days later that crews had gone out to "re-secure" the building. But he warned that the fixes were "just another round of 'whack-a-mole' and an additional expenditure of the estate's minimal funds."

But the city also sent building inspectors, finding several violations.

In an email dated March 22, Polich then blamed O'Connor and the city for delays to the demolition and sale of the property.

He wrote that the "hardship and community risk" was because O'Connor and the city "backtracked on their initial agreement to complete the zoning and TIF agreement with Waveland Partners and the EMC estate."

He added that the buildings could have already been demolished and a new development underway.

Kienzler responded a few days later, writing that she had passed along the email to O'Connor.

"He asked that I communicate that Waveland Partners and the Estate's complete inability to find someone as an end user for the property has been extremely disappointing," she wrote.

O'Connor said in a statement through his office that the city has not stalled the redevelopment and only refused to enter an agreement with Waveland until a buyer was found.

Additional emails show the attempts made to secure tax increment financing funds for the site.

In emails from 2012, Polich's partner at Waveland, Nick Wilder, says the estate wanted to ask the City Council for nearly $10 million in tax increment financing money to demolish the vacant buildings, create a park and pass along the remaining balance to a developer, according to documents.

Wilder wrote that the estate expected at that time to use $4 million in TIF funds to pay for the "demolition and remediation" of the buildings, while $1 million would be used to develop a park on the property and $4.5 million would be passed on to the site's developer to "attract them to develop the property and conform to TIF-related requirements related to hiring and the creation of affordable units."

But Polich warned in another email to O'Connor that further delay would be "fatal" to the development.

"As the time passes, the available TIF revenues dwindle very significantly," he wrote.

Since 2008, the value of the TIF district created specifically to redevelop the hospital site has indeed dropped, from $6 million to $2.09 million at the end of 2012, the most recent year the district's report is available.

Even though the TIF's value has dropped, Waveland has proposed in a 2012 email to "port" funds from a neighboring TIF district, which has assets worth $10.2 million.

So far, though, no TIF disbursements have been approved for the property.

A $7.5 million offer by MCZ Development to buy the property is contingent on TIF commitments as well as other requirements. The firm wants $14.1 million in unpaid property taxes assessed by Cook County to be reduced to less than $1 million, according to a motion filed by the estate's attorneys.

The estate said in an Oct. 1 filing that it expected to pay the county about $1.75 million. A judge would have to approve any arrangements.

O'Connor said in his statement that MCZ was working on "building design issues" that would eventually be presented to the city and to the neighborhood.

But other developers have expressed interest in the EMC property include Cedar Street, the company behind FLATS Chicago.

In a string of emails from 2012, Dan McCaffery, of McCaffery Interests, Inc., and Wilder set up a meeting to discuss "development opportunities at Edgewater Medical Center." McCaffery's company's plan to develop the former Children's Memorial Hospital site in Lincoln Park was approved in April.

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