Church of Scientology Coming to Printer's Row?

Anytime we hear anything about the Church of Scientology there is usually some form of controversy surrounding the story. With that said, the controversy that is the Church of Scientology seems to be creeping into the Sloop as the church continues to lobby for a zoning change in Printer's Row. The plan would allow the church to build a structure at 650 S. Clark.

Although we're not going to offer our official opinion on the religion, we highly encourage you to check out the Wikipedia entry for more info. If that doesn't entice you, maybe Tom will:

What Do Miami, Las Vegas and the South Loop have in Common?

If you said, “real estate internet blogs and message boards trying to compare them”, you win.

Someone on yochicago’s message board recently brought up the question, so we tried to defend the Sloop. Although the housing boom can be credited for the large amount of development in these three places, in our opinion that’s where the comparisons should stop:

I understand peoples desire to compare Miami and Las Vegas to the South Loop, but it's really not a fair comparison. Compare Miami to Phoenix or Houston.

If you want to compare the South Loop, compare it to Soho, Chelsea or Harlem in New York. These areas had similar booms to the South Loop. Although they may not be in as good as shape as the upper east/west sides of New York or comparably the Gold Coast in Chicago, they're desirable neighborhoods in large, dynamic cities. As long as Chicago and New York remain viable global cities, these neighborhoods will be well positioned for the long term (unlike Miami and Vegas).

Not a Good Time to Be a Landlord

According to Crain's Chicago rent in the downtown market has fallen to it's lowest levels in 7 years. The article goes on to call out the South Loop specifically saying:

The new South Loop projects “have hit the market at the worst time, if you want to live in the South Loop, you have lots of options. That has really slowed down the leasing.”

This isn't a big surprise especially since there are also a lot of condo owners who would rather try to rent their properties instead of selling them.

Federal Funding for the Olympics

Jack G recently directed us to this old but relevant article from the New York Times circa 1999. The article talks about federal spending associated with the Olympics. Obviously this is relevant for us to consider as Chicago's bid for the 2016 games progresses.

From what we've read, the federal government is on tap to pay for the security if the games come to Chicago. This no doubt will be a lot of money given the size of Chicago and awareness of security post 9-11. The story states that the most recent American games in Salt Lake City, the first after 9-11, cost the federal government upwards of $200 million. Compare that with the '96 Atlanta games ($92 million for security) and the '84 Los Angeles games ($68 million) and it's easy to assume that the cost of security for Chicago could potentially be twice as much as the Salt Lake City games.

However, the biggest federal expense might come from new infrastructure projects that are sped up due to the Olympics. Olympic loyalists argue that this would happen eventually, but given the stage the Olympics provide enables these projects to be greenlighted quicker.

Our guess is that long term CTA, Metra and highway projects that are on the table but currently 'unfunded' could fall into this category. We hope so, because right now the current Olympic transportation plan for Chicago is pretty unimpressive.

More Real Estate Stats for Sloopin

Recently we had some correspondence with Lakeshore Analytics about the real estate market in the Sloop. For a .pdf with in depth information about our specific neighborhood check this link out. When we asked them to provide their thoughts on the South Loop's real estate market here is what they said:

1. The neighborhood has very high incomes for Chicago ... over $45,000 per capita, like the fifth highest in Chicago. Neighborhoods with higher incomes have generally more stable households. (Good.)
2. This was one of the hottest neighborhoods in the city for a while, but it didn't experience lurches up or down because of the new construction. The fact that so much was new actually helped smooth things because those sales are all pretty high and developers don't panic-sell the way some existing home owners do. (Good.)
3. Along similar lines, the loan-to-value ratio in the neighborhood averaged 77%, one of the lowest in the city. This is good because people will in general be less susceptible to default if they have more equity. It basically signals a buyer who's got a strong handle on his or her finances. (Good.)
4. The development cycle for a high rise is very long. So when there are signs of trouble somewhere near where I live (northwest side), a developer can call off a condo conversion. You live with your decisions for like a year in the northwest side, but a high rise new construction could take two or three years to complete the development cycle. (This is bad.)
5. The key question marks that I don't have access to are, How many condo's are on the market currently and how many are coming online in 2009? You may have a better idea of that. It could well be there is a long backlog of homes left to be sold and more coming online -- that doesn't necessarily mean lower median prices, but it does portend a difficult time for an existing owner if they want to sell and move. The early evidence is that the number of existing homes sold has been increasing every year -- people are still able to sell their homes -- so I would guess that existing owners have escaped some of the pain so far. (This is mixed.)

Interesting stuff.

For more information on the greater Chicago real estate market check out their website. Also they're providing a $10 discount for Sloopin readers who are interested in purchasing their entire report, The Neighborhood Report 2009 (simply type in "SLOOPIN" when purchasing). Check it out, we found it interesting.

The Metra and The Olympic Village Stop Question?

Ok, by our calculations it seems like the bid team intentionally left out the fact that there is a 27th street Metra stop right by the proposed Olympic Village. Why would they do this? We thought it provided them a great opportunity to connect the Olympic Village to the rest of the city with Mass Rail Transit.
From our calculations, there really are not many close CTA stops to the proposed Olympic Village (see chart below). The closest Red Line stop is the Chinatown stop which is approximately 1.5 Miles away. The closest Green Line stop is also about 1.5 miles away. So the CTA really won't be accessible to the Olympic Village.
So this leaves the Metra, which literally stops at the proposed Olympic Village. Let's also not forget that the Metra stops at McCormick Place and 18th street (both places that are either at or very close to proposed venues). So again why would they leave these off their maps? Are they hiding something? It's weird because they put random CTA stops on the map, but leave out major Metra stops that could actually affect the bid.

Not sure the reasoning, but the only logical explanation would be security concerns. Do the Athlete's only use buses? I imagine they do when they're going to venues to practice and compete, but when they're done wouldn't it be good if they could jump on a train and enjoy the real CHICAGO culture!

Just a thought on our part...can you think of any other reasons?

First Take on the 'Final' Chicago Bid

Let's be honest, it's impossible to sort through the 500+ pages of bid information quickly. However, as I thumbed through the plan, the venue portion (volume 2) did impress me. The 'Olympic Waterfront' cluster, which is centered around Grant Park, Museum Campus, McCormick Place and the new proposed Olympic Village, would truly be spectacular and showcase some of the most beautiful areas of our city to the entire world.
However, the biggest disappointment has to be the Transportation plan. Our hope, as well as many other people judging by the comments on this article on chicagotribune.com, was that the Olympics could serve as a spring board for the City, State and Federal governments to invest and upgrade our decrepit CTA. Anyone living in Chicago knows upgrades are desperately needed!

We were hoping for some new lines (maybe the circle line project) or something connecting the Olympic Village to the rest of the CTA. Amazingly this doesn't exist. I think it goes without saying that the Olympics would bring funding for the CTA, but right now it looks like it would solely be used to upgrade the existing system; which is needed but not the scale we were hoping for.

However, 2016 is a lonnnnnnnng time away! If Chicago gets the Olympics it wouldn't surprise me if the transportation plan changes (remember Chicago and the US are all about CHANGE these days thanks to Obama). I know it would cost a lot to expand the CTA, but we see this as an opportunity Chicago can't pass up.

More Olympic thoughts to come as we continue to read, listen and digest all that is the 2016 Olympic bidding process...

Chicago Mass Transit Doesn't Stack Up

A great article and video on Medill's website comparing Chicago's transit system to Madrid's and Tokyo's. Based on the video it's pretty clear that Chicago doesn't stack up to either of these transit systems. Tokyo's system simply looks amazing!

The fact of the matters is that Chicago has the second largest mass transit system in the United States (behind New York). However, compared to many foreign cities it's pretty weak. Hopefully our new president can help change this trend, but Americans love their cars...

Stimulus Bill: Mass Transit Compromises cont.

Yesterday we spoke about some compromises that needed to be hashed out between the House and Senate in regards to Mass Transit funding. Greg Hinz at Crain's has a new post about rumors on what happened and how this will affect the Chicagoland area. Unfortunately, it sounds like the CTA and Metra won't get as much as they were asking for. Ditto for O'Hare.

According to the article the big surprises were funds allocated to High Speed Rail development and Amtrack:

The one local winner in the last-minute bargaining appears to be Amtrak.

It will get $850 million for capital grants and $450 million for security upgrades, a portion of which will end up here.

But the big money was a surprise $8 billion added for development of high-speed rail.

While President Barack Obama says the bill will contain no earmarks, word out of Washington is that Mr. Reid is in line to get that much of that money for a high-speed line from Las Vegas to Los Angeles. If so, it will be particularly interesting to see what Illinois Sen. Dick Durbin -- Reid's number two and big advocate of Midwest high-speed rail -- has to say about it.

Mr. Reid is up for re-election next year, and is facing an uphill battle to retain his seat. According to Nevada media, he last summer secured $45 million in federal funds for preliminary environmental work on teh proposed $12-billlion magnetic levitation (maglev) line.

So we will see what develops with that battle, but in the mean time here is a map detailing what the Midwest high speed rail network could look like (realize some tracks already exist, it would just be improving them to accommodate higher speed trains, among other things):

Printer's Row Condo Auction!

A sign of the times...Vetro (at 611 S. Wells) is auctioning off it's final 40 units on Saturday, March 7th. If you're in the market for high rise living and a potential deal, I would recommend taking a serious look at this opportunity. Here is a list of the units being auctioned:

Obviously it's an auction and prices will go up, but as I poked around their website most of the floorplans looked sensible and practical. I also imagine there are some great views from this building.

New CTA Entrance on Polk

Good news for Printers Row, the CTA has just opened up a new entrance for the red line Harrison stop.

The new entrance can be found at the intersection of Polk and State (point A on the map below). In our opinion, this is a great sign for the area and especially this developing corridor of the South Loop. Polk street already is a great location and place to visit with it's variety of bars, restaurants, festivals, venues and stores. This new entrance will help funnel people directly into the heart of Printer's Row and we applaud the city on this new improvement.

Does the Chicago Spire depend on the Olympics?

Although we realize that the Spire isn't technically in Sloopin's jurisdiction, it's probably the best and highest profile gauge on Chicago's real estate market. Two years ago all systems were go. The largest propose building in North America was under construction, a new icon would be added to Chicago's legendary skyline, and surprisingly to some sales at the Spire seemed to be doing well.
However, times changed, the bubble burst and today we're left looking at a gigantic 7 story hole at one of Chicago's most high profile and important pieces of land (at the intersection of the Chicago River and Lake Michigan).

According to a recent article in the New York Times, the Spire is on hold (which is obvious if you drive by the site). Most people probably read the writing between the lines an infer that this project is dead. However, according to Garret Kelleher (the developer) it's not over. At this juncture, Sloopin's going to take a cynical approach and hope we're proved wrong.

In the NYT article one of the most interesting quotes from Mr. Kelleher is his statement about the Chicago 2016 Olympic bid and it's impact on the Spire:

Specifically, Mr. Kelleher is waiting for next fall, when the city will learn whether it will be the site of the 2016 Olympics. “If Chicago lands the Olympics,it will certainly be a boost to the local economy,” Mr. Kelleher said.

Why is this interesting? It seems as if many people in the business world are on the edge of their seats to see what happens with the Olympic bid. As you know, we're all for the Olympics here at Sloopin, but it does raise a red flag when we hear talk like this. What happens if Chicago doesn't get the Olympic bid? Will this loss spell even more deflation in development and business in Chicago?

Conversely, winning the bid would probably help the local economy a lot (which is what Mr. Kelleher is saying). Obviously Chicago would get a lot of free international publicity which would help Mr. Kelleher sell units to across the globe.

So what do you think? Does the Spire need the Olympics to actually get built?

1720 S. Michigan

Although the real estate market is down, it's still fun to look at some of the properties around the sloop. With that said, check out this 2bed/2bath at 1720 S. Michigan. From what it looks like, it's listed at $340,000 for 1,134 sq. feet. If a highrise is your thing, then this could be yous...

Buyer Beware

If you put money down for a condo in a new construction building within the past couple of years this story unfortunately probably sounds way to familiar. This article on Crain's Chicago talks about a number of horror stories, but of particular relevance for Sloopin readers is the proposed Glashaus development at 1327 S. Wabash Ave:

Buyers of units in stalled condo tower projects face a tough decision: walk away and lose their deposits, or wait in hopes that the condos of their dreams will be built eventually.

Manish Shah is all too familiar with this bind. He agreed in December 2006 to buy a two-bedroom unit at the GlasHaus development, 1327 S. Wabash Ave., and plunked down $24,000 in earnest money.

This is unfortunately seems to be a sign of the times and something many people are dealing with around the neighborhood and city.

However, based on this long (but interesting) thread of comments on YoChicago.com, Manish and others at Glashaus have been able to get their money back. Hopefully others will be as lucky.

Sloopin's Public Housing Situation

A recent article in the Chicago Journal detailed new plans by the Chicago Housing Authority (CHA) to close more buildings at the Harold Ickes Homes (which is located at the far southwest corner of the near south neighborhood).

The topic of Public Housing and gentrification always proves to be a touchy subject and this is no different. From their controversial conception in the 1930’s to the current dilemmas they face now, Public Housing tends to be viewed negatively, but as a necessity for poorer, underprivileged citizens.

Without getting into to much detail and nuance, the “older” public housing complexes (like the Ickes Homes) tended to only be comprised of poorer citizens that couldn’t afford housing. As you can imagine and have probably read, these complexes bred illicit and underground markets (such as drugs and prostitution) where gangs fought for control and power. Many documentaries, books and movies have chronicled this history (most famously in the Cabrini-Green complex on the near north side).

More recently, the federal department of housing and urban development (HUD) in conjunction with other local government agencies has started a ‘new’ initiative that tries to encourage mixed housing with people of different socioeconomic backgrounds (public housing, affordable housing and market rate housing). The idea is to have a diverse neighborhood with a variety of different types of people.

Public housing continues to be a tough situation, but the newer approach seems to make more sense then grouping large numbers of underprivileged and sometimes desperate residents together (however, who buys the market rate housing? Would you?).

In the near south side neighborhood resides two complexes, the Ickes Homes and the Hilliard Homes (as seen on the map). The Hilliard Homes is comprised of two unique buildings that are considered architectural gems and are on the national register of historic buildings. In 2002, the city started a project to convert the complex into the new mixed housing model (and includes public housing, affordable housing and senior living). Across the street, The Harold Ickes Homes are currently listed as 'TBD' in regards to their future plans.

Given the proximity to McCormick Place, other proposed Olympic venues and the cities general plans for the near south side neighborhood, it will be interesting to see what happens with the Ickes Homes. If the Hilliard Homes (which sit across the street) prove to be a success, maybe the government will implement a similar strategy here. If not, who knows?

One thing seems inevitable though, the Harold Ickes Homes probably won’t be around much longer in their current form and for many residents of the South Loop and Near South Side neighborhoods that’s probably welcomed news.

"Major" Developers Line Up for Olympic Village

Chicagobusinesss.com is reporting that some of Chicago's biggest developers are interested in taking on the Olympic Village project assuming Chicago wins the bid. This is good news for the bid and city as it will alleviate some of the fears citizens and the IOC might have with this 'privately' funded portion of the plan:

The willingness of well-known developers to take on the project boosts the
credibility of Chicago's Olympics bid, which relies heavily on the private
sector. At an estimated cost of $1.1 billion, the athletes' village, planned for
the site of Michael Reese Hospital near 31st Street and Cottage Grove Avenue,
was the most expensive and perhaps riskiest element of the plan.

To us this isn't surprising. We figured that a developer would be salivating at the opportunity to develop this high profile and great piece of land. Obviously the city is making this area a priority for its future plans and it seems like a no brainer for most developers.

Previously our only reason for concern was how the current economic and real estate situation could effect this plan, but this article puts those fears to rest...well sort of puts them to rest.

Closer Look at the Michael Reese Hospital Site

With all the recent talk about TIFs to help fund the Olympic Village, it sparked us to take a closer look at the area. Below is an aerial shot of the proposed Olympic Village area. Although the official bid book has not been released, pieces of information have leaked through various media reports and interviews with 2016 officials.


We've identified four areas on the map that look to play a vital part in Chicago's 2016 Olympic Plan (assuming Chicago wins). With that said, let's take a look at each one:

Michael Reese Hospital Site
This area was recently bought by the city and looks to be a less expensive way to create the Olympic Village while still having it close to the city, by the lake, and next to many proposed venues. This area is prime real estate and in our mind a big win for the city and the bid.

Air Rights over McCormick Place Parking Lot
For the initial bid submission to the USOC and IOC, this area was originally slated to be the Olympic Village. The problem with that plan was that it was very expensive to build large housing structures over the air rights. From what we've read recently, the city still owns the air rights and plans to build a park connecting the Michael Reese site to the Lake/South Burnham Park. We like this idea as this area has been an eye sore for a long time and will help build a new park which will bolster the lake front.

Unknown Real Estate
The area shaded green is an unknown to us, we're not sure if it's part of the Michael Reese deal. After going down to the area it's still hard to tell. However, there is a McDonald's so we imagine that it's private property not owned by the city. The reason we call this out is because it butts up against the southern part of McCormick Place and would potentially be between the Olympic Village and McCormick Place (which plays a vital role in the plan). Although it would be ideal if the city owned this area, it probably wouldn't diminish the plan if it's not part of the village. Just an area to ponder...

Metra Rail Lines
Shaded in yellow are the Metra Rail lines that run Metra trains and South Shore trains. This is another great resource for this area and hopefully something the bid organizers and other Chicago urban planners are considering. These train lines don't connect to the current CTA train grid, but we would love to see them somehow join them. Check out our post from 2008 called "Sloopin's Grand Plan" that talks about this in more depth. Regardless, the 27th street station most likely will become a large hub for trains, buses and various other transportation resources as it looks to be one of the central points for the Olympic plan.

How do you feel about this site? Do you think the bid is using it well?

Freight Trains Could be Diverted Out of the South Loop

The Chicago Journal has a follow-up article about a story we were following in early December. Canadian National, the company that runs the freight trains that often pass through the South Loop, have won their legal battle to acquire a different company that has the rights to train tracks that go around the city of Chicago. What this means is that the trains that pass through the downtown area (and South Loop) could now be diverted around the city instead of through it.

For residents in the South Loop (particularly those that live close to the tracks) this is great news. Hopefully they won't hear trains laying on their horns in the middle of the night. However, the ruling is being contested by various suburb groups that are trying to block this move as it will make their communities more congested and busy with the diverted trains. Stay tuned...

More on Sloopin Real Estate from Crain's

Brief news bit on Real Estate in Chicago and specifically the South Loop. Gail Lissner, VP at Appraisal Research Consultants, is "cautiously optimistic about the South Loop" in the long run (1:46 seconds in)...

Interesting Discussion at YoChicago about SL

For those of you who don't know, YoChicago is a website devoted to covering the real estate market in Chicago. And as you can imagine, the South Loop is one neighborhood that is often covered due to its recent growth.

About two days ago YoChicago posted a conversation starter comparing the South Loop in its current state to Edgewater a couple of decades ago (According to the website real estate in the Edgewater neighborhood lost approximately 60% of it's value from 1972 to 1992). Although this has garnered a fare share of comments, most of them seem to think that the South Loop is nothing like Edgewater. In my opinion here was an insightful post comparing the two:

I don't think that there is much of a historical parallel (between the South Loop and Edgewater). Yes, the supply of condos in both neighborhoods skyrocketed, and skyrocketed over the a period of 5 years or so, before the market collapsed, but that's probably where the similarities end.

As John succinctly put it, the South Loop location is downtown and attractive, unlike Edgewater. Yes, the South Loop currently has a large inventory of unsold units, however, the South Loop is a very attractive place to live unlike Edgewater was/is - and while it will take quite some time to absorb this inventory, it will be absorbed much more quickly than Edgewater, due to it being so attractive to live in the South Loop.

Also, while I agree with most of what Abuyer had to say, I disagree with his comment that the inventory in the South Loop is overpriced. There may be a couple buildings with units that are overpriced, but most of unsold units in the South Loop are such a bargain compared to other neighborhoods that are close to the Loop such as Lakeshore East, the Loop, Streeterville, River North, Gold Coast, or even the West Loop and River West neighborhoods. When the overall market begins to pick up again, the South Loop's inventory will be absorbed a lot more quickly than the inventory of these other neighborhoods, given that the South Loop is a better bargain.

Will the South Loop's condo prices takea a little bit of a hit, due to the overall market's problems? Of course. But I don't see anything even close to the 60% loss Edgewater suffered between 1979-1992, happening to the South Loop from 2008-2021.