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Plan for 500 Units on Vacant Pilsen Site Likely Won't Get Alderman's OK

By Stephanie Lulay | February 11, 2016 6:25am
 Property Markets Group wants to develop 500 rental units on a vacant 7.85-acre site between 16th and 18th streets and Newberry Avenue and Peoria Street in Pilsen.
Property Markets Group wants to develop 500 rental units on a vacant 7.85-acre site between 16th and 18th streets and Newberry Avenue and Peoria Street in Pilsen.
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PILSEN — An alderman will likely deny a developer's controversial plan to build 500 apartments on a vacant Pilsen site. 

After the Pilsen Land Use Committee recently issued an unfavorable recommendation, Ald. Danny Solis (25th) told DNAinfo Chicago this week that he likely won't sign off on the project, effectively killing it for now. 

"It is too many units," Solis said. 

New York-based Property Markets Group last spring revealed plans to develop 500 apartments on the vacant 7.85-acre site between 16th and 18th streets and Newberry Avenue and Peoria Street. The developer wanted a mix of one-, two- and three-bedroom units at the site. 

In May, Solis said that he was concerned that 500 units might be too many, but he liked that the plan called for about 1.5 acres of green space.

But the Pilsen Land Use Committee and the developer couldn't agree on how much affordable housing should be built at the site, confirmed Raul Reymundo, head of Pilsen Land Use Committee and executive director of the Resurrection Project.  

Affordable housing mandate 

The sticking point that led the Pilsen Land Use Committee to deny the 500-unit project plan was Pilsen's stringent affordable housing mandate. 

Around 2005, at the request of the community, Solis and the land use committee developed a mandate requiring a minimum of 21 percent of all new developments to be designated as affordable housing units. The rule applies to new developments of 10 or more units that seek zoning changes from the city or use city land or subsidies, Solis said.

Solis' 21 percent mandate — which only applies to Pilsen, not other parts of the 25th Ward — is double the city's mandate requiring 10 percent of new developments to be affordable housing units. Developers can also skirt the city's rules by opting to make a payment to a city affordable housing fund. 

"It's true that no other [area] in the city is asking for 21 percent. It's unique to Pilsen," Solis said. "But that's what the community wants and what I feel the community needs." 

In the case of the 500-unit development, Property Markets Group proposed developing 10 percent of affordable housing units on the site, developer Noah Gottlieb confirmed. 

The Pilsen Land Use Committee has relaxed the Pilsen affordable housing rules in some cases where the developer offered another significant community benefit, Solis said. In those cases, some affordable housing was still developed on site, he said. 

In this case, the developer wasn't offering enough of a community benefit to offset the affordable housing need, Solis said. 

A developer close to this project and others said Pilsen's affordable housing policies have stopped large-scale developments from moving forward in Pilsen, resulting in lost property tax dollars and added density that would support neighborhood businesses. 

The land use committee is composed of representatives from the Resurrection Project, the Pilsen Neighbors Community Council, 18th Street Development Corporation and Alivio Medical Center. 

The city defines affordable rental housing as an apartment that is affordable to households earning up to 60 percent of area median income. 

University Village neighbors want housing developed 

While a Pilsen group rallied to oppose the 500-unit development, calling the plan "gentrification on steroids," University Village neighbors are pushing for the land to be developed soon. 

Members of the University Village Neighborhood Alliance are circulating a petition that calls for leaders to approve the "smart, appropriate" development. 

"Empty lots provide no benefit to our neighborhoods, and development would bring much-needed density to local businesses as well as additional tax revenue for the city," the petition reads. 

Tony Gonnella, the group's president, said the big empty lots don't help University Village or Pilsen, and offer "bad guys" a place to hide.

"This is an issue that we care about; we're concerned," said Gonnella, who lives at 15th and Peoria. "At least once a week I see cars broken into over there because it's just empty, dark. A lot of people park there." 

The University Village neighbors live in Ald. Patrick D. Thompson's 11th Ward, but the site of the proposed development is in Solis' ward. 

On Wednesday, Byron Sigcho, director of Pilsen Alliance, called Solis' plan to reject the project "a victory" for the community. 

"We will continue to push these developers to listen to the community," he said. 

The proposed development site is owned by The Midwest Jesuits, who bought the land for $6.5 million in 2009.

In May 2015, Pilsen Alliance protested the Midwest Jesuits' planned sale of property in front of the Roman Catholic order's headquarters. 

Property Markets Group's contract to buy the property closes this summer, Gottlieb said. The developer plans to buy the property whether Solis signs off on a development plan or not, he said. 

"We think there are a lot of people who do want to see [this property] developed," Gottlieb said. 

Another Pilsen development approved 

While the 500-unit plan is likely dead for now, Ald. Solis has signed off on another large-scale development in Pilsen. 

Fox Chicago LLC will build 99 apartments at 21st and Laflin streets, Solis said. The plan cleared the city's Committee on Zoning, which Solis chairs, on Tuesday, and the full City Council approved the plan Wednesday. 

Fox will develop 10 percent affordable housing on site — less than Pilsen's 21 percent affordable housing mandate. The Pilsen Land Use Committee approved Fox's plan because the developer is also donating an acre of land to nearby Benito Juarez Community Academy that will be used to expand sports fields, Solis said. 

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