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Sweet Chicago public housing deal for Miami Dolphins owner goes horribly sour

Thursday, Mar 16, 2017

* A friend of mine asked me yesterday if I’d read a late February Tribune story about a South Side housing project called Parkway Gardens. I did see it, but I didn’t read it very carefully because the piece was kind of all over the place.

I read it again this morning and looked for the hot buttons my friend mentioned last night. This story has everything. So I’m going to make it easier for you to read.

* According to the report, in a little over five years, there have been 41 shootings at Parkway Gardens, including the recent murder of 11-year-old Takiya Holmes and last August’s killing of a cousin of Chicago Bulls guard Dwyane Wade, who was shot while pushing a baby stroller containing her newborn child. Former First Lady Michelle Obama lived in Parkway Gardens as a child.

The article claims residents also complain about problems with roaches and mice, and the project’s latest HUD inspection score put it “just above what was historically the threshold for passing.” But the real problem is the violence.

* The place was developed and managed by a company owned by Stephen Ross, the wealthy owner of the Miami Dolphins. Ross gave Mayor Emanuel’s campaign fund $25,000 in 2015. The Trib reports that the company has a $20 billion real estate portfolio and has a new luxury rental building on Lake Shore Drive and is developing the site of the failed “Spire” tower.

* According to the article, the rent collected on a fully leased complex, which includes 35 buildings and 694-units, is $10.5 million a year

A three-bedroom apartment at Parkway, for example, can bring in up to $1,375 per month, and a two-bedroom can command $1,167, according to Related. That’s up to 14 percent higher than HUD estimates is “fair market rent” in the surrounding Woodlawn community, records show.

* The company acquired the complex for $40 million and ended up spending a total of $100 million after the rehab, according to the article. But the company didn’t do it alone. Taxpayers helped - a lot.

According to the Trib, the company received $59 million in bonds issued by the Illinois Housing Development Authority. It also got $30 million in federal low-income housing tax credits for 10 years, and another $9.6 million in tax credits after the property was added to the National Register of Historic Places. It also received a $10.4 million federal developer’s fee, for a grand total that appears to be just shy of its $100 million outlay, not including rent

“These are pretty safe bets,” [Alan Cravitz, a vice president at Draper and Krame] said. “You’ve got a long-term contract with the government and rents are higher than market rates.”

* Mary Mitchell and Mark Brown both wrote about Parkway Gardens in February columns…

* Mitchell: Time for Parkway Gardens’ owners to step up: Between 2011 and 2014, there were so many shootings in this area that a Chicago Sun-Times analysis of police data found it was the most dangerous block in Chicago in terms of shootings in a three-year period.

* Mitchell: Parkway Gardens ground zero for Chicago’s violence: For many working-class families, Parkway Gardens was seen as an alternative to the Chicago Housing Authority’s Robert Taylor Homes and Stateway Gardens. It is now a textbook example of what happens when hope moves out and despair moves in.

* Brown: ‘Small’ Parkway Gardens kids program must get a bit bigger

* The media attention seemed to work, according to the Tribune article

On Friday, after meeting with an official from the U.S. Department of Housing and Urban Development, Related announced a series of security improvements, including limiting and redesigning entry points to the complex, better lighting, more fencing and cameras and beefed-up security staffing. The measures were the culmination of months of planning, the company said.

OK, fine. Let’s hope something happens. But where’s the outrage from the alderman and state and federal legislators who supposedly represent that complex? It’s just bizarre that nobody has spoken up more about this.

- Posted by Rich Miller        

  1. - Rocky Rosi - Thursday, Mar 16, 17 @ 10:58 am:

    The Chicago way. Unreal.

  2. - Amalia - Thursday, Mar 16, 17 @ 11:04 am:

    You know what’s really bizarre? that no one has spoken up much about the surplus of funds with the CHA. Money just sitting around not being used. That entire agency is ripe for reform and a money pot when housing is an issue is useful. come on Rahm, pay attention to this agency!

  3. - DuPage - Thursday, Mar 16, 17 @ 11:08 am:

    Is gang violence the responsibility of the owner? Yes it is good to beef up security, but there is something wrong when such extreme security is necessary.

  4. - TinyDancer(FKASue) - Thursday, Mar 16, 17 @ 11:16 am:

    Read about this. Michelle Obama lived there. Why do they get to charge (taxpayers) above-market rent?

  5. - Sherrie23 - Thursday, Mar 16, 17 @ 11:22 am:

    Isn’t Willie Cochran, the local alderman of that area under a federal indictment? He’s got bigger problems than Parkway, lol.

  6. - TinyDancer(FKASue) - Thursday, Mar 16, 17 @ 11:25 am:

    Anyone know the public school situation in this neighborhood? Did they close schools there?
    All that extra above-market rent could be used for after-school activities/wrap-around services for the neighborhood instead of going into the developer’s pocket.

  7. - Amalia - Thursday, Mar 16, 17 @ 11:29 am:

    Rahm, you have to be nimble right now with the money you have at the CHA. Trump just proposed cutting CDBG, a council on Homelessness, and the Neighborhood Reinvestment Corporation. Money is needed in low and moderate income housing development. If you have money now, spend it before
    Trump takes it back.

  8. - Been There - Thursday, Mar 16, 17 @ 11:33 am:

    ===The company acquired the complex for $40 million and ended up spending a total of $100 million after the rehab====

    Wait a minute. Who in their right mind would spend that kind of money and then after the fact do this?

    ===Related announced a series of security improvements, including limiting and redesigning entry points to the complex, better lighting, more fencing and cameras and beefed-up security staffing===

    I use to own multi family properties in the city and the FIRST thing I would spend my money on were those items. Then work on the apartments. If the place isn’t secure on the outside all your investment on the inside will be wasted soon.

  9. - wordslinger - Thursday, Mar 16, 17 @ 11:35 am:

    Did tronc fire all their editors? The original story is a mess.

    You get points for enterprise reporting, but work your craft. Just dumping your notebook on the page doesn’t cut it.

    Lot of that going on at that paper. It’s not talk radio — edit.

  10. - titan - Thursday, Mar 16, 17 @ 11:41 am:

    I am assuming the owners aren’t the ones shooting people in the neighborhood.

    Mitchell only makes references to gangs doing (at least some of) the shootings. She doesn’t suggest one thing that the owners ought to be doing but currently aren’t (or anything that they are but shouldn’t be doing).

    Should the owners be more restrictive about who the tenants are? Maybe more intrusive about keeping gang affiliated offspring and boyfriends out of the units? If they did those things, Mitchell would be attacking them for discriminatory policies.

  11. - Tone - Thursday, Mar 16, 17 @ 12:18 pm:

    “Why do they get to charge (taxpayers) above-market rent?”

    Ask HUD.

  12. - Gooner - Thursday, Mar 16, 17 @ 12:42 pm:

    I’m surprised at the involvement by Related Midwest.

    That company has an excellent reputation for both high quality work and in listening to the community. They are by no means a slum-lord nor are they a company that gets by based solely on political connections.

  13. - housing researcher - Thursday, Mar 16, 17 @ 12:45 pm:

    - TinyDancer(FKASue) @11:25
    “Why do they get to charge (taxpayers) above-market rent?”
    Because that’s within HUD’s payment standard–the 2017 standard for a 2-bedroom is $1,207. That said, the payment standard is the max and CHA has come discretion. Should be noted that $1,207 for a 2-bedroom really limits where a family can live

  14. - Arthur Andersen - Thursday, Mar 16, 17 @ 1:40 pm:

    And who was a big shot at Related Companies until she blew town for the big big shot in the White House with Pres.Obama?

  15. - Gooner - Thursday, Mar 16, 17 @ 1:45 pm:

    Arthur Anderson, I may be wrong, but I believe you are confusing Habitat and Related Midwest.

  16. - Arthur Andersen - Thursday, Mar 16, 17 @ 1:46 pm:

    Withdraw the previous comment. AA should not Blog with a migraine. Going to take meds and a nap. My apologies.

  17. - allknowingmasterofracoondom - Thursday, Mar 16, 17 @ 2:21 pm:

    AA - that would be Mr. Brad White, who Pres Obama appointed to a cushy job in DC. Its ok to say it AA…..

  18. - Tone - Thursday, Mar 16, 17 @ 3:55 pm:

    Brad White has not worked for Related for years and years. He has been a housing consultant on his own for a while. Was at Habitat before that and Related before that. He was also just an employee of Related, not the owner.

  19. - Term Limits, Like ONE! - Thursday, Mar 16, 17 @ 6:16 pm:

    Did Michael LaVaughn Robinson live there?

  20. - Andre Beckerle - Thursday, Mar 30, 17 @ 1:14 am:

    I do trust all of the ideas you have introduced in your post. They are very convincing and will definitely work. Still, the posts are very quick for starters. May just you please extend them a bit from subsequent time? Thank you for the post.|

Sorry, comments for this post are now closed.

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