Real Estate Experts’ Talk On Chicago Market Applies To Proviso

Thursday June 21, 2018 || By Michael Romain || OPINION || @maywoodnews 

Featured image: Expert panelists during the May 24 Crain’s Real Estate Forum in Chicago. | VFP 

Last month, I attended a Crain’s Real Estate Forum, held May 24 at the University of Chicago’s Polsky Center for Entrepreneurship and Innovation on Chicago’s South Side.

The event featured a panel of community development experts who offered some interesting perspectives and insights that resonated beyond the city. What they said applies to suburbs like Bellwood, Broadview, Maywood and Melrose Park, too.

Below is a summary of that conversation.

Real economic growth still comes from the grassroots 

David Doig, the president of the nonprofit Chicago Neighborhood Initiatives (CNI) and the former CEO of the Chicago Park District, has helmed what some are calling a renaissance in the historic South Side Pullman neighborhood.

Doig’s CNI has leveraged local assets and the community’s rich history to attract roughly $250 million in investment and create around 1,200 jobs in roughly a decade. Doig said “one of the key elements” of the area’s revitalization has been its community institutions.

“In Pullman, we’re doing retail, industrial and housing, but we’re also working with schools, churches and block clubs,” Doig said at the Crain’s event. “So there is a social and human capital element to this that has to be addressed. I think where it works best is where you have these pieces working together in coordination. That’s the role of community development.”

Since 2014, Pullman has attracted a state-of-the-art Method soap factory, an $8 million greenhouse built atop a factory and owned by New York-based Gotham Greens (a second greenhouse was announced earlier this year) and a Whole Foods distribution center. 

Doig added that CNI — which, according to its website, does large-scale real estate development, projects, smaller scale neighborhood preservation projects and micro-lending, among other functions — is committed to Pullman for the long-term.

“I struggle sometimes with for-profit developers who want to spread risk,” Doig said. “They don’t want to have concentrated risk in any way, but that’s not moving the bar. You have to concentrate things, you have to keep doing it. We’re not done. We’ve got more work to do.”

Panelist Michael Altheimer, a principal with Miro Development — a general contractor and property management company that has acquired properties on the West and South Sides — said that there’s a lot of investment flooding into “reactivated” neighborhoods like West Garfield Park. There’s a flood of capital chasing “yield,” he said.

But places are more than vehicles for absentee investors to realize profits, Altheimer said. Investors must also emphasize cultivating community — even if it means investors moving into the neighborhoods themselves. The buildings are often easy to purchase, he said, but managing them is another story.

“You have to have corporate sponsors who understand [grassroots community building],” he said. “You still have to knock on doors and understand what’s going on in these communities.”

They introduced me to a new concept — the ‘tax foreclosure crisis’ 

Laura Granneman, the vice president of strategic investments with Quicken Loans Community Investments Fund — the philanthropic arm of the behemoth Detroit-based mortgage lending company — spoke about her organization’s efforts in the Motor City.

Quicken’s founder, billionaire Dan Gilbert, is the largest landowner in downtown Detroit and the owner of the city’s NBA team, the Cleveland Cavaliers. Much like Doig in Pullman, Gilbert has initiated something of a renaissance in the Motor City’s center — renovating historic properties, luring cutting-edge companies and high-paying jobs to town and, with them, young professionals and creatives.

Granneman said that her fund, meanwhile, has been tasked with making sure the swiftly rising fortunes of the city’s downtown dwellers don’t crowd out residents, most of them black, who reside on the city’s impoverished periphery.

“Detroit has a history of African American homeownership and a lot of that has been undermined — a little by the mortgage foreclosure, but a lot more by the tax foreclosure crisis,” she said. “A lot of people owned their homes outright and then, because of a lot of different factors, [among them property assessments that were out of whack in the city], they weren’t able to keep up with their property taxes.”

Granneman said that her fund recently deployed people from different community groups to knock on 65,000 doors in order to help homeowners who were at risk of losing their homes due to delinquent taxes. In the last 12 years, she said, there have been around 150,000 tax foreclosures in Detroit.

“It took us about three months and about $300,000,” Granneman said. “It was a different way to use the resources of the community that we hadn’t done in the past.”

Granneman added that her fund is also tasked with leveraging Detroit’s blight — an average single-family house in the city is valued at around $40,000, she said — in order to persuad would-be investors that now is the time to buy into the city’s burgeoning transformation early, while the price is still right.

Think deeper and more precisely about the term ‘gentrification’ 

During the roughly hour-long Crain’s forum, gentrification wasn’t explicitly mentioned until around 40 minutes into the dialogue, after the issue was brought up during audience questions.  

Panelist David Reisman, a commissioner with the Chicago Department of Planning, said that the largest issue on the West and South Sides isn’t gentrification, a term that is not often easy to define precisely, but “disinvestment.” 

“I think there is a significant concern as to whether investments like the Obama Center and other things contribute to the displacement of existing residents,” Reisman said. “For the wealth that is created, we have to keep it in the community of people who have invested there for decades, so that it doesn’t become a speculative endeavor [and] people who have been building these communities for years, if not decades, are not left out.” 

Echoing part of Reisman’s argument, Doig said that the West and South Sides aren’t suffering from gentrification as much as depopulation and a lack of population density. He offered up Lawndale — a community of 150,000 people 50 years ago that now has fewer than 30,000 residents — as a significant example. 

“There has to be a renewed effort to build new, affordable housing in neighborhoods that need population,” Doig said.

Bifurcated neighborhoods … bad? 

One thing Altheimer said he doesn’t like to see are neighborhoods unnecessarily bifurcated into distinct areas (i.e., West and East Garfield Park, North and South Maywood).

A programmatic development concept, he said, requires “spreading out development and spreading out change,” so that “folks who have never heard of these neighborhoods” won’t feel the need to concentrate in one area of the neighborhood over the other. VFP 

For more local perspectives, ‘Like’ our Facebook page 

2 thoughts on “Real Estate Experts’ Talk On Chicago Market Applies To Proviso”

  1. Good article; but I would ask that you contact David Doig and ask about CNI’s (and/or its predecessor, Park Bank Initiatives’) experience in Maywood, specifically the effort to redevelop the apartment building at 1st and Madison and also about the NSP? You could also ask about CNI’s experience in Oak Park, where the organization with Mercy Housing attempted to build a mixed-use building on Madison Street that included workforce housing units?

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.