Breaking new ground

Church first private entity to buy federal property to revitalize housing
September 30, 2003

They are just 56 apartment units across from a church, a drop in the ocean of Chicago public housing in need of renovation.

But housing reform advocates and city officials are hailing the transfer of seven broken-down and boarded-up buildings from the Chicago Housing Authority to St. Edmund's Episcopal Church as an innovative strategy for revitalizing public housing in Chicago and across the nation.

It is the first purchase by a private entity of federally owned CHA property. The church's plan -- to convert the abandoned units to mixed-income apartments and town homes -- fits snugly within the citywide public housing overhaul begun in the mid-1990s.

Some federal officials, however, have raised concerns about the idea, fearful of setting a precedent that opens the door to profiteering by speculators at a time when the nation's public housing stock is shrinking. Such fears, combined with turmoil and turnover at the CHA in the 1990s, kept the project on the shelf for almost 10 years after the Rev. Richard Tolliver, St. Edmund's rector, proposed it in 1993.

Officials say that it is largely because of Tolliver's credibility and track record in building and managing private low-income housing in the area that the transfer finally occurred in May. "I'm ecstatic about it," said Tolliver. "Affordable and desirable housing is the foundation of community development. You have to attract people to attract commercial interest."

With $8.9 million in funds from city, federal and private donors, Tolliver said he planned to welcome new tenants by next August, after a 14-month renovation effort that began in June.

Units leased back

The new St. Edmund's Meadows will lease one-quarter of its units back to CHA for public housing residents and divide the rest between reduced-rate and market-rate housing. But whether the project is a trendsetter or a one-time sales event is up in the air.

"We can only proceed with extreme caution on a case-by-case basis, to ensure the integrity of housing development," said U.S. Rep. Bobby Rush (D-III.), who supported the acquisition by St. Edmund's. "I would not be supportive of just anybody, anywhere, anytime being able to acquire federal properties for their own private concerns. We have to be mindful of the possibility of land-grabbing."

Although the CHA has no plans to sell more buildings, agency executive director Terry Peterson said at least three other faith-based institutions have contacted him to float proposals to buy and renovate developments in their communities. Officials said the St. Edmund's Redevelopment Corp., founded by Tolliver as an outreach ministry of the church in 1990, proved itself credible by building 14 mixed-income private developments with 455 total units in the area.

"We are always looking for partnerships to assist us," said Peterson. "That's how projects happen. If you don't have partnerships with people who can bring money to the table, then projects don't happen." But many in the private sector don't strike such a note of caution.

"St. Edmund's is the first out of the box. They're starting a trend in that they're setting a precedent," said Andrew Mooney, head of the Chicago office of the Local Initiatives Support Corp., which in 1998 lent St. Edmund's $38,000 in seed money to draw up development plans. Mooney said the corporation was helping fund three other Chicago groups exploring the possibility of buying or leasing CHA property for rehabilitation.

Whether those projects get off the ground will depend largely on the ability of organizers to prove they have viable building plans, financial backing and a commitment to the community, officials said. But Tolliver has set the bar high.

"St. Edmund's was an ideal project," said Jack Markowski, head of the city's Housing Department. "It's a prototype of what you like to see: a very strong community organization, which, frankly, mitigates many of the risks in development and helps to coordinate the local resources to provide a welcome environment for investment."

The Housing Department provided $4.8 million in equity for the St. Edmund's renovation, more than half the project's budget. The Department of Housing and Urban Development and the CHA provided most of the rest of the funding, with private donors supplying less than 5 percent of the total budget.

U.S. funds operations

Though the city controls the CHA, the federal government funds its operations and owns the land. That arrangement is partly responsible for the project's slow crawl from concept to a signed contract, a delay that continued even after Mayor Richard M. Daley backed the plan in 1999, according to officials.

Tolliver said he already had enough renters lined up to fill all 42 units. Enticing people back to Washington Park is the first step toward long-term revitalization, Tolliver said. He also hopes that the neighborhood can attract a "critical mass" of workers and consumers that will lure back retailers, he said. First on the list of needs is a grocery store, said Tolliver.

"The corner is turning," he said of the renovation efforts. "We hope this is going to cement it."

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