have struck an unusual bargain with developers by agreeing to provide land for
new homes on the Near West Side in exchange for a share of the sales proceeds.
agreement with New West Realty owners Ted Mazola and Gus Mauro in effect makes
City Hall a financial partner in an initiative to bring new housing stock to a
onetime depressed neighborhood.
John Markowski, Mayor Daley's
housing commissioner, said the program benefits both the city and developers and
will be adapted for use in other neighborhoods. Officials project that the 43
vacant lots provided to New West's venture could produce aggregate sales revenue
to the city of at least $4.17 million.
could be greater, depending on sales prices. All the properties are city-owned
and fall within an area bounded byMaplewood, Damen, Warren and Flournoy that is just west of the
Markowski emphasized that the
project carries little risk to taxpayers because the city is laying out no cash.
New West is securing private financing for construction and will bear all those
Mazola said his agreement calls for
the city to be paid once all home sales close on a particular parcel. His
company has agreed to build 110 homes on the 43 lots, mostly as three-flats or
program differs from other housing efforts involving city-owned land, which
typically call for the city to be paid upfront through bond proceeds. In other
instances, the city will donate land to developers that put up affordable
Mazola, a former alderman, said he
suggested the new arrangement because developers typically face red tape when
the city issues bonds. "It's much more easy for me to get my own financing," he
said. "I'm willing to share the profits down the line."
Ground was broken Wednesday at 2112
W. Madison for the first building to be
constructed under the program. Some of the parcels require zoning changes from
classifications that require retail space on the ground floor. What's planned is
agreement takes advantage of acute demand for housing on the Near West Side,
with development activity pressing westward beyond the United
Center and Western
Avenue. The property
involved is among some 10,000 city-owned lots, often acquired through
foreclosure to satisfy the city's demolition costs. The city also gains title to
properties with delinquent property taxes.
"Let's get these properties back on
the tax rolls," said Peter Skosey, vice
president at the Metropolitan Planning Council. He praised the
new program as an example of "good creative thinking."