Consultant: Apartments Best Use for Hahn Street

But some aldermen push back against report's tone.

Given current market conditions, rental apartments are the best option for any development on Hahn Street, a consultant told the City Council Monday.

Tracy Cross and Associates' report was intended to provide background on the area's current retail, office and housing market as aldermen consider new ideas for the properties bordered by North Avenue, York Road, Addison and Third streets. But a few aldermen thought the numbers added up to a bleak view of the city.

The land has been part of the downtown Tax Increment Financing District (TIF 1) that was established in 1986, but economic decline stalled development there. The city let  out of its contract to develop Hahn Street last March. Morningside had planned to build condominiums with first-floor retail. Recently, aldermen for the area, including a hotel or entertainment facility.

On Monday, Cross pointed to the steep decline of the owner-occupied housing market since 2005.

“Chicago is one of the worst housing markets in the country,” Cross said.

Housing prices in Elmhurst have declined 27 percent since the boom days. Both single- and multi-family units are affected by the fall-off in housing prices. And Cross predicted that when the housing market gets moving again, prices will reset at 15 to 25 percent less than they were in 2005.

Rents, however, are increasing, and the supply of rental housing is tight, Cross said.

“The best opportunities lie in apartment development,” he said, and those apartments could bring shoppers and diners to the Hahn Street area.

Cross assured aldermen that rentals today are built with granite countertops, steel appliances and all other trappings of luxury development, and that perhaps they needed to update their perceptions of this type of housing.

“Everybody views an apartment as ... something that was built in 1972,” he said.

Cross also analyzed the local retail market. Oakbrook Center already holds the distinction of being a major retail, restaurant, hotel and office attraction for eastern DuPage County, he said. Also, he noted, Elmhurst has a good mix of stores and restaurants already.

As for the idea of a boutique hotel, Cross dissuaded the council from pursuing this type of development. Hotels, he said, need to be able to charge an average of $160 per room per day and see a 70 percent occupancy rate to justify development. The Hahn Street parcels, he said, could not support these numbers.

“Doing the right thing will attract the builder community to Elmhurst,” Cross said.

But some aldermen reacted strongly to the report. First Ward Alderman Paula Pezza said she was “offended” by Cross's presentation, saying she did not appreciate the “doom and gloom” that she perceived he was offering.

“There's nothing here I see that paints a positive picture of our town,” she said.

Third Ward Alderman Michael Bram dismissed Oakbrook Center's potential as an obstacle for Elmhurst.

“I personally don't buy into the fact that Oakbrook is a big gorilla in the room,” he said.

Seventh Ward Alderman Mark Mulliner asked for more specific information about Elmhurst, saying that the city has always pursued development on a higher level than many of its neighbors.

Resident Claude Pagacz, who has long criticized the city for owning and then having to develop land, told aldermen that they might not like Cross' numbers, but they represent reality.

“If you start setting up strict parameters ... what you're going to have is nothing,” he said, adding that perhaps expectations needed to be lowered.

“I do not expect Versailles,” he said.

Ralph September 05, 2012 at 06:46 PM
With additional Sec 8 housing in that area the school district will benefit with an influx of added diversity. Schools definitely benefit when surrounding communities send their kids to Elmhurst schools.
carrie johnson September 06, 2012 at 06:35 PM
Is it any wonder w Tracy Cross' work history with residential builders that he would recommend high end apartments? I bet he knows of a builder or 2 that he would recommend.
Darlene Heslop September 06, 2012 at 11:31 PM
reality folks...higher end rentals in downtown areas do very, very well...look at oak park...thriving downtown rental market with rents 20% higher than those here in downtown elmhurst. these won't be section 8 housing but will instead be marketed towards the biggest growing segment of the population...single professional adults ages 25 to 95...who will pay good $$$ for the luxury of being close to public transportation, not have to worry about mowing the grass, shoveling the snow, or replacing the furnace...and will spend lots and lots of their disposable income on such things as restaurants and higher-end groceries...take a good, hard look at 100 forest place in downtown oak park...rental town-houses start at about $1600 per month, 1 bedroom apts at about $1250 per month. start looking at what elmhurst has to offer people who may not be "typical"...chances are...you may find out that there is a whole segment of the population that can be captured...and their $$$, too to support this town. why is it that every, single time someone mentions rental and they think section 8???
Steve September 07, 2012 at 04:31 PM
I think the first thing is if you didn't watch the presentation from Mr. Cross then you should do that first. The presentation was one of the worst I have seen in my professional career. It was created to steer the City Council and the residents to one answer, apartments. It didnt provide details of the Elmhurst market but instead grouped Elmhurst with other neighboring TOWNSHIPS. How is this data worthwhile to prove or disprove any direction. It was the worst dog and pony show in years.
Joy September 08, 2012 at 02:40 PM
I have a comment. Like Paula I am a long time Realtor with 28 years of full time experience. Fifteen of those have been here in Elmhurst. Yes, housing prices have declined across the country, in Elmhurst we have not seen as bad of a decline as in other areas. As a matter of fact we are seeing a shortage of available homes for sale. There have been numerous multiple offers on realistically priced homes and although they are not closing over the asking price in most cases, they are close. I don't know where Mr. Cross is from but I to am offended by the doom and gloom report and Oak Brook mall is not competition for us. Look at some of the great shops here in town like Enzee and Camden. They thrive as do many others and vacancies seem to fill pretty quickly compared to other towns. I will agree though that the rental market is tight here. Realtors now handle a large amount of the rentals in and around town. Sometimes professional people just find it easier to rent because of their lifestyle. Luxury apartments would probably be snapped up but don't give us the hard sell because you may have someone in your pocket. Joyce Okal


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