I am writing to update you on the current status of the property located on the southeast corner of Howard and Ashland. On June 8th, I introduced an ordinance to authorize the City of Chicago’s Department of Housing and Economic Development to enter into negotiations with the current owner, Burrell Restaurant Corporation, and its lender, Royal Bank of Canada, to purchase the property using funds remaining in the Howard Paulina Tax Increment Financing (TIF) District.
The ordinance was approved yesterday by the City Council Committee on Housing and Real Estate, and the full City Council is likely to adopt the ordinance at its meeting next Wednesday.
The principal owner of Burrell Restaurant Corp., John Terzakis, is in jail in California awaiting trial on federal charges unrelated to the Ashland/Howard property and the bank is currently in the final stages of foreclosing on the property. The Howard/Paulina TIF is set to expire next year and the amount of money remaining in the TIF would likely cover the cost of acquiring the property, assuming the bank is willing to sell the property to the city at a fair market value.
I am undertaking this step to give the City and our community control over the future development of the property. Currently, no one has come forward with a specific proposal for the property, but some members of the community are exploring the possibility of using the property for an urban farm. I wanted to give the community the opportunity to explore this and other options for use of the property, rather than simply leave the property to the vagaries of a depressed real estate market.
If you who have not been following this issue or are new to the neighborhood, below is a brief synopsis of the history of the parcel and our options moving forward:
The property was once the home of the offices and printing plant for Lerner Newspapers, a community newspaper. Lerner moved out of the neighborhood in 1990 and the building they occupied remained vacant until it was demolished about four years ago. The property was acquired in 1992 by the same development team that later developed Gateway Plaza. Mr. Terzakis was a member of the development team. The partnership later disbanded and in 2002, Mr. Terzakis and his new partners became sole owners under the aegis of the Burrell Restaurant Corp.
Throughout the 1990s and early 2000s, the community and I entertained a number of development proposals for use of the property by the owners of the property or other interested developers. The proposals included strip malls and residential developments. The development proposals never came to fruition either because of community opposition or a failure of the property owners and the proposed developers to reach an agreement on a purchase price.
Finally, in 2002, I warned Mr. Terzakis that I would ask the City to institute eminent domain proceedings to acquire the property unless he undertook a serious effort to develop the parcel or to sell to someone who would. This prodded Mr. Terzakis and his team to come up with a development proposal that met with community approval. The proposal called for a mixed-use retail, condominium and town home development, and after an extensive community process, Mr. Terzakis’ company in 2004 received the necessary zoning to move forward with their development.
Unfortunately Mr. Terzakis’ company did little to advance the development other than demolish the old Lerner Newspaper structure. By 2006, Mr. Terzakis and his company had run into legal and financial trouble and the real estate market collapsed.
In 2006-07, the City at my request issued a Request for Proposals (RFP) to develop the site, which is the first step to acquiring the property through eminent domain. Unfortunately, no one responded to the RFP.
Mr. Terzakis’ lender is in the final stages of foreclosing on the property. Once it has gained control of the property, officials from the bank and the bank’s receiver have promised to clean the property and repair the fence that surrounds the perimeter.
Late last year, I approached officials in the City’s Department of Housing and Economic Developmentabout the possibility of using the remaining funds in the Howard Paulina TIF to purchase the property. An appraisal of the property was conducted and last May the Community Development Commission signed off on giving the city the authority to enter into negotiations with Burrell Restaurant Corp. and its lender. City Council approval is also required, which is expected next week. After the Mayor signs the ordinance, the City can enter into formal negotiations.
Where do we go from here?
If the City and the bank are unable to reach an agreement on a purchase price, the lender will continue to own the property and we will make certain they maintain it in a satisfactory condition until they are able to sell it.
If we reach an agreement, the City will acquire the property using TIF funds and the City and I will entertain realistic and financially feasible development proposals from either for-profit or not-for-profit organizations. Of course, all serious development proposals will be subject to a thorough community review process.
A local organization, Rogers Park Farms, has come up with a very intriguing proposal to develop an urban farm and business incubator on the site. Recognizing they do not have the capacity to do it themselves, members of Rogers Park Farms plan to meet next month with the Heartland Alliance for Human Needs and Human Rights to determine if Heartland is interested in partnering in such an enterprise. Heartland Alliance is currently in the process of implementing an urban farm on Chicago’s west side.
I will certainly keep you posted if the urban farm idea becomes a serious proposal. If you are interested in working with Rogers Park Farms on this idea, click here and someone from the organization will get back to you.
If you have another serious proposal, please submit a written summary of your proposal email@example.com. Before you take the time to submit your proposal, make sure you or your organization has the financial and technical capacity to move your proposal forward beyond the idea stage.
If you have any questions regarding the Howard/Ashland site, please reply to this e-mail.