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.
Got a question? Something on your mind? Talk to your community, directly.
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something