Developer Offers $1.25 Million Instead Of Adding Affordable Units

HIGHLAND PARK, IL —The developers of the Albion at Highland Park offered to make a one time cash payment of $1.25 million instead of including an 10 more affordable units among the 161 apartments planned for the five-story project at 1850 Green Bay Road. The proposal presented Wednesday to the Highland Park Housing Commission includes 17 affordable units and 144 rented out at market rate.

Under the city's inclusionary housing ordinance, residential developers are required to include 27 "affordable" units. But it also allows for developers to propose to pay a fee of $125,000 for each required affordable unit not included on site. In the case of the Albion development, the City Council also granted the developers the opportunity to get a bonus for its on-site affordable units while also allowing for the "in-lieu payment," according to a staff memo to the commission.

City staff "believe the proposed payment will bolster the [Highland Park's] affordable housing trust fund helping [its] housing program sustain activity during future recessionary periods," according to the memo from Senior Planner Charmain Later. Such periods provide a chance for the city to acquire affordable housing stock for less money, Later said.

The housing fund, which is funded through demolition tax and payments made in lieu of including affordable units, is "insufficient" to handle a significant recessionary period, Later said, and it "can only provide for about two years of activity at desired levels."

The proposed payment would eventually result in at least 10 more affordable units scattered around town through grants from the trust fund, and the extra money will also help the city maintain its existing affordable housing stock, according to Later.

The Albion development's affordable units are spread throughout the building, according to its application. They will have the same finishes and similar amenities, it said.

"Due to the high cost of construction and additional civil work required throughout the site," the developers wrote in their inclusionary housing plan, "the [Albion development's] feasibility can only allow for 17 affordable on-site units before [its] approvals would not be granted by partners, lenders and appraisers."

The plan also said building's amenities will be "above and beyond" any other building in town, and the staffing and operational costs associated with making it the "highest quality of any project in Highland Park will require additional capital and operational expense." The extra staffing and the "ability to be catered to in the same manner as a penthouse apartment home user have created a financial burden on the fiscal analysis of the project."

The market rate units have proposed rents of between $1,600 and $2,000 for studios, from $2,300 to $3,000 for one-bedroom apartments and between $3,500 and $5,000 for two bedrooms.

Under the city's affordable housing program, discounted units should be divided equally into three income tiers. Households with 0 to 50 percent of area median income — nearly $68,000 for a couple with no children — will have monthly rents from about $700 for a studio to just over $1,000 for a two-bedroom. Those with incomes of 51 to 80 percent of the Chicago area median will see rents between $1,014 and $1,303 and those making 81 to 120 percent of the median would pay from about $1,500 to $2,400 a month, depending on the size of the unit.

The site of the development, formerly the Karger Center, was deeded to the city from the Park District of Highland Park in 1949. Citing the cost of maintaining the "rapidly aging" structure, the city listed it for sale in May 2017. It was sold to a joint venture of Albion Residential and the Jacobs Companies for $3.762 million in January 2018. The preliminary development plan for the building was approved by the Highland Park City Council on Feb. 26.

The Albion development is the largest development to seek Highland Park City Council approval since the city passed its Inclusionary Zoning Ordinance in 2003, Pioneer Press reported. The ordinance requires 20 percent of units be classified as affordable, though the proportion is closer to 15 percent once various bonuses are taken into consideration.

The Housing Commission decided to continue considering the developers' inclusionary housing plan at its July 10 meeting. City staff said its recommendation, along with that of the Plan and Design Commission, is likely to head to the City Council later in the summer.

Earlier:

• Albion Development Plans Gets Preliminary City Council Nod
• Plan Commission Recommends Albion Development Despite Complaints
• Luxury Rental Development Plans For Karger Center Revealed
• Highland Park Gets Bid To Build 171 Units At Karger Center