Tracy Cross and Associates returned to the City Council Monday armed with more information to support what the consultant reported to aldermen last month – that rental apartments are the best idea for developing land at Hahn Street and York Road.
While stressing he was not telling the council what to do, Cross presented numbers that pointed to a need for apartments in the suburbs, and especially in northeast DuPage County.
“You have no competition to the east of you. None,” Cross said.
The site in question, bordered by North Avenue, York Road, Addison and Third streets, was part of the downtown Tax Increment Financing District (TIF 1) that was established in 1986, but economic decline stalled development there.
The city let Morningside Group out of its contract to develop Hahn Street last March. Morningside had planned to build condominiums with first-floor retail. Recently, aldermen offered ideas for the area, including a hotel or entertainment facility.
Cross' first presentation in September concluded that hotel, office, and owner-occupied housing would all be risky moves in the current economy. But aldermen pushed back at these conclusions, and asked Cross to provide more support for his recommendations.
On Monday, Cross made more of a case for apartments, telling the council that many potential renters will look within Elmhurst when they want to purchase their first home, and that the supply of young people wanting apartments is perpetual.
To counter the council's push for more information on the idea of a boutique hotel, Cross said that the competition in the hospitality market in the area is “extremely intense,” with 6,200 rooms available in eastern DuPage County and 5,300 rooms in Rosemont alone.
Most of those rooms, he said, were closer to the kinds of facilities, such as offices, convention centers and O'Hare Airport, that bring people to hotels.
He added that Elmhurst College only draws five percent of its 2,800 enrollees from outside the Chicago area. Cross stressed that he was just charged with evaluating the Hahn Street area, and noted that a hotel could work at another location in Elmhurst.
As for the residential market, while the single-family home market is down 25 percent from its high in 2007, and the condominium market is down 45 percent, the rental scene is tight, with near-full occupancy in many buildings.
Because the council made it clear they wanted options, Cross outlined potential residential uses for the site, including twenty single-family homes priced at $595,000 to $775,000, 36 rowhomes priced at $300,000 to $350,000, or 90 condos at $200,000 to $284,000. The condos, he said, would have to wait four years for the market to recover.
As for apartments, a 200-unit building with rents from $1,300 to $1,850 per month would allow for studios, or a 175-unit building with rents from $1,500 to $1,950 per month would offer one-bedrooms as the smallest space. Both types of developments would attract singles or childless couples with an income of at least $50,000 per year.
Third Ward Alderman Michael Bram asked if the city would have to provide incentives to apartment developers. Cross said it was likely, especially if the city wanted to put stipulations on the site, such as increased parking requirements. He referred to a recently approved apartment development in Orland Park in which the village was heavily involved in the financing. Cross provided consulting services to the village of Orland Park.
Alderman Scott Levin noted that in considering options for the site, it wasn't what the council wanted, but rather “what developers will do and what a bank will finance.”