One of the largest affordable housing developments on the near west side has a new owner and a guarantee of affordability. The Jonathan Rose Companies (“Rose”) announced on September 20, 2022, that it has completed its purchase of the 272-unit Barbara Jean Wright Court Apartments (“BJ Wright”) from the Chicago Community Development Corporation (“CCDC”) for $17.5 million and has committed another $46 million to the rehabilitation of its apartments and common spaces.
With BJ Wright situated along 14th street, University Village to the east, booming Pilsen to the south, and new high rises to the north, many residents were concerned that they might be forced to leave the neighborhood. This redevelopment ensures that residents will have affordable rents for the long-term. Rose’s Partner and Senior Managing Director Nathan D. Taft said: “With the housing markets in the West Loop and Pilsen booming, all – including HUD, the City’s Department of Housing, the State, the alderpersons, the CHA, the tenants and the tenant advocates — were united in our efforts to preserve this critical piece of affordable housing.”
“While the closing process was lengthy, the partnership between the U.S. Department of Housing and Urban Development (HUD) , the City of Chicago, the alderpersons, community groups, and the Chicago Housing Authority (CHA) was exemplary,” added Brandon J. Kearse, Managing Director at Rose, who along with Karyntha Walsh, Senior Project Manager, negotiated the complex transaction. “Now with long-term affordability guaranteed, it’s time to ensure that the apartments and common spaces will be able to serve another 50 years,” Ms. Walsh said.
Under the new agreement all but 21 apartments will be affordable to those earning 60 percent or less of the area median income, with 40 percent of units receiving federal project-based rental assistance through HUD and another 30 percent receiving project-based rental assistance through the Chicago Housing Authority. The remaining 21 will be unrestricted and unsubsidized units, allowing existing market-rate renters to remain on-site, as well.
Last renovated more than 20 years ago, Rose is undertaking a rehab process guided by residents, local stakeholders, 25th Ward Alderman Byron Sigcho-Lopez, 28th Ward Alderman Jason C. Ervin, City of Chicago Department of Housing, HUD, the Chicago Housing Authority, PGIM Real Estate Finance, Enterprise Housing Credit Investments, Huntington National Bank, and US Bank.
“Thanks to the collaborative efforts and support of the community, the CHA, HUD and the City of Chicago, Jonathan Rose Companies will provide residents with the renovation of their homes as well as the security and increased comfort they deserve,” said Alderman Sigcho-Lopez.
The extensive restoration will include a complete renovation of all apartments, the heating and cooling systems of all buildings, the living areas of each of the 272 apartments, new landscaping and renewal of the property’s playgrounds and basketball court. And as a centerpiece of the renovation, Rose will create a new 5,000 square foot clubhouse that will contain “community of opportunity” common spaces, featuring a fitness center, a computer learning center, and a large multi-purpose room. The renovation will also furnish in-unit Wi-Fi for residents free of charge to increase digital access at the community.
“We are thankful that despite the ins and outs of the deal, the delays caused by COVID and the logistical challenges of rising constructions costs and interest rates, all parties stayed focused on the key issues – the preservation of affordability and the improvement of the residents’ living conditions – and everyone came together to see the project through to closing,” said Kearse.
“As important,“ says Walsh, “while working on the physical renovation of the property, we will be working with the residents to create a ‘community of opportunity’ with connections to health, education, cultural and social services so residents can continue to be empowered partners in moving their community forward.” Walsh added, “that the cooperation between HUD, the CHA, and the city was extraordinary and greatly appreciated.”
Financing
Barbara Jean Wright Court Apartments required the partnership of many. Enterprise Housing Credit Investments contributed $25.3 million in federal tax credit equity while PGIM Real Estate Finance arranged a $46.9 million FHA 221d4 mortgage loan. Huntington National Bank is providing a $20.3 million construction loan. In addition, the City of Chicago contributed Tax Increment Financing in the amount of $4.0 million and Community Reinvestment Plan funds in the amount of $3.8 million. The financing also included Illinois Donation Tax Credits facilitated by the redevelopment’s non-profit partner Community Opportunity Fund and purchased by US Bank to generate roughly $900,000 in additional funding.
Construction
Residents will be temporarily relocated on a rolling basis throughout the 2-year renovation period. Skender Construction will serve as the General Contractor, Grund & Riesterer Architects, Inc. is serving as the architect, Urban Relocation Services, Inc. is managing temporary relocation, and Rose Community Management is serving as the property manager.
