LINCOLN PARK — New megamansions, some taking up to seven city lots, are popping up all over Lincoln Park while developers continue to scoop up land.
About a dozen projects are in the works to knock down multifamily residences, and even multiple free-standing homes, to pave the way for mansions that might typically be found in the suburbs.
The structures being demolished aren't the types of buildings that were once ripe for tearing down in the neighborhood, such as small, modest homes of working-class families.
"There's just not a lot of those old workers cottages in Lincoln Park to be knocked down anymore," said Dennis Dooley, vice president of Berkshire Hathaway HomeServices KoenigRubloff Realty Group.
Paul Biasco talks about the multimillion dollar homes being destroyed for megamansions:
The latest example includes the slated demolition of a unique 139-year-old brick building that includes three single-family homes at 2124, 2126 and 2128 N. Dayton St. The homes were purchased by a developer for a combined $4 million in three separate sales in September. A new single-family home will rise on the lot.
The unique deal was reached with the help of two agents, one representing the family that owned the home in the center, and another representing the owners of the homes on each side.
"We contacted the next-door neighbors, and they were in the process of putting theirs on the market, too, so we thought to get the best outcome we would market all three properties together," said KoenigRubloff's Natasha Motev, whose listing was the middle home.
Motev said the sale price of the individual homes was "much higher" due to their package deal.
LG Development Group purchased the homes with a buyer in mind for a single-family home that would stretch three lots wide, according to Motev.
"The builders are back. They are back in droves," Dooley said. "The biggest problem is finding land."
The number of teardowns in Lincoln Park has risen dramatically since the bottom of the recession in 2008, when there were just two permitted in the 43rd Ward.
In 2014 the city issued permits to tear down 26 buildings and permits to construct 25 single-family residences in their places. In 2013, the city issued permits to tear down 37 buildings, with 36 single family homes in their places. In 2012, permits were issued for 20 teardowns and replacement homes, according to Chicago Cityscape, a service that tracks Chicago's data portal.
A DNAinfo Chicago analysis of the teardown data found that in the mid-to-late 2000s builders were constructing a mix of multiunit and single-family homes through teardowns. That is no longer the case over the last three years, with all but two of 83 teardowns being given permits to build single-family homes.
As the desire for larger homes grows, and the availability of space to build them dwindles, in some cases builders are spending years accumulating land. Some builders have been "land banking" over the last three to five years, according to Dooley.
The multiple-lot push has been spurred by the creation of two of the city's largest homes, according to Motev.
The first, a 26,000-square-foot giant, is under construction at 1955 N. Orchard Street and will stretch across seven city lots. The project has taken 10 years to come together. According to public records, the owners, Mark and Kimbra Walter, have spent $9.1 million since 2004 buying the seven lots for the home.
Mark Walter is the founder of the financial services firm Guggenheim Partners and, in 2012, was a partner in the purchase of the Los Angeles Dodgers for $2.15 billion.
The second multiple-lot home is the reportedly $40 million one at 1932 N. Burling St., built by insurance exec Richard Parrillo in 2008. The home stretches across seven city lots.
"Everyone is trying to put together lots and have mansions, or McMansions, whatever you'd like to call them," Motev said.
Other notable multilot projects underway include a $22 million single-family home build on what was originally intended by to eight town homes on St. James Place next to the Lincoln Park 2520 condominium building. The home is being built by billionare CEO and founder of Morningstar, Joe Mansueto.
In many instances, sellers are contacting potential developers and home builders before they list their homes.
"There's a few people who say, 'Hey I'll sell you my house.' I don't care how nice it is, but you are paying up for that," said Charles Grode, vice-president of BGD&C, a custom home building company.
Developers used to be able to buy a lot for around $500,000, according to Grode, but now single lots are fetching upward of $1.5 million.
“The problem is there's sometimes no differentiation between a nice [house] and a junky one," Grode said. "It’s the land value. It depends how much you want it.
"The concept of teardowns is bizarre," Dooley said. "You are looking at a house that might be perfectly fine to live in, but their perception is you can tear it down and build something for three to four times the price."
It's not just single-family homes that are being torn down. Multiple projects on the table in Lincoln Park include plans to demolish condominium buildings to make way for homes.
BGD&C bought all 11-unit condominiums in two buildings at 1909 N. Orchard Street in the spring of 2013 for $4.5 million. There were four developers making cash offers for the property at the time, according Dooley, who represented the condo association in the sale.
The condo buildings are still standing, while the developer seeks a buyer for a potential new home.
"We paid a high price at the time for the triple lot," Grode said. "We are basically just holding it until we find the right buyer."
While Burling, Orchard and Howe streets, the three blocks of some of the city's priciest real estate just south of Armitage Avenue, have traditionally been home to these types of homes, the teardowns have pushed further north in the neighborhood.
The 2000-2200 blocks of North Dayton are filled with construction zones and empty lots from freshly demolished homes. A $12.9 million home is planned for three consecutive lots at 2018 N. Dayton.
Environs Development, which bought the former DePaul University Theater building in late 2014 at 2135 N. Kenmore Ave. from the school, has plans to build four homes on the site.
Each will feature an extra-wide lot with an 8,000-to 9,500-square-foot home starting at $5.795 million.
Ken Brinkman, president of Environs Development, said the typical 25-foot wide city lot requires "quite a few compromises" for builders.
"These buyers are looking for wider homes and homes with more outdoor space, not necessarily larger homes," Brinkman said.
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