HEEF Midwest Real Estate Challenge by Trisha Stevens

Executive Summary Full Circle Development Partners (“FC”) is proposing to create a destination shopping, dining, and community center that will create jobs, provide needed goods and services to local residents, and improve the overall quality of life in the neighborhood. Our concept, Market 63 consists of four complementary components that provide full service restaurants, workforce development opportunities, community space, and recreational open space to the greater Englewood community. Our vision creates a safe and enjoyable place to shop, dine, and be entertained. Market 63 has the potential to attract residents from all over Chicago. Tenants of Market 63 will reflect the diversity of Englewood and its surrounding neighborhoods. They will not only offer unique products and services, but will also serve as vehicles for community development through participation in workforce development programs that empower under served residents to reach self-sufficiency. Market 63 will include a traditional retail block (“Halsted Plaza”) consisting of one-story spaces designated for local restaurant chains, beauty salons, health food shops, and other underrepresented industries in the community. Foot and vehicle traffic generated by Englewood Square, the adjacent shopping center anchored by Whole Foods Market, will help to attract these local retailers to Market 63. The Site’s design aesthetic will allow retailers to enjoy tree-lined sidewalks and space for outdoor patios. The second component of Market 63 is an outdoor recreational space (“Recreation Space”). Located just to the west of the retail block, the berms over the water retention tanks will be activated in order to drive foot traffic and further enhance the visibility of Halsted Plaza, creating a safe and active environment for the community. FC envisions local residents gathering in these green spaces and interacting with the shops, some of which will face west onto the berms. The third component will be the redevelopment of the historic firehouse (“Green Street Community Center”) at the intersection of Green Street and Peoria Street. The redeveloped firehouse will include artist studios, a gallery space, and a non-profit catering kitchen that will provide food service training and employment opportunities to homeless and lowincome residents. FC envisions this space being used for community events as well as to showcase the talent of local artists. Finally, at the corner of 63rd Street and Halsted Parkway, FC will build a retail business accelerator (“Public Market”) that will allow emerging chefs and artisans to cultivate their ideas and showcase their talents to the community. With a shared commercial kitchen on site, the Public Market will offer opportunities with low barriers to entry for local “food-preneurs” and other retail start-ups. The development will be financed with a combination of public and private funds to make the project economically feasible. Residents, businesses, and community organizations have made a collective effort to revitalize this historic commercial corridor. Market 63 will be the catalyst for transforming a site that has suffered from continual disinvestment over the last several decades into a vibrant destination for all Chicagoans.

FULL

CIRCLE DEVELOPMENT PARTNERS

Community Profile Englewood Englewood is one of the 77 official community areas of Chicago. It is bounded to the north by 55th Street (Garfield Boulevard), to the west by Racine Avenue, to the south by 75th Street, and to the east by the now abandoned Norfolk Southern railroad tracks. For decades Englewood enjoyed immense growth and opportunity. In the first half of the 20th century, the intersection of 63rd Street and Halsted Street anchored the most significant retail district in Chicago outside of the central business district (“the Loop”). In the second half of the century, Englewood’s fortunes ran dry. Forces such as suburbanization, manufacturing decline and discriminatory real estate practices combined to cause drastic economic and population decline. Businesses shuttered, theaters crumbled, crime soared and a third of the population moved away. Nearly all major real estate developments in Englewood in the last several decades has received substantial financial support from the City. In the last 15 years, the public sector has made investments worth well over a quarter-billion dollars within a half-mile of the Site, including Kennedy-King College, Hope Manor II veterans housing, Englewood Apartments for recently homeless residents, and a plethora of health care institutions. The City of Chicago (“the City”) has also created Tax Increment Financing (“TIF”) districts in the area in an effort to fund economic development projects in the community. Market 63 falls within the boundaries of the Englewood Mall TIF district. Adjacent to Market 63, the ongoing Englewood Square (“ES”) project demonstrates how public investment has helped spur private business development. Through significant investment from the City, ES will bring a Whole Foods Market, Starbucks, Chipotle, and other new retail to a long neglected intersection of Englewood. The Englewood Mall TIF district spent roughly $11 million to prepare and improve the land on the northwest corner of 63rd Street and Halsted Street. In January 2014, former Alderman JoAnn Thompson conveyed her support of the $11 million TIF contribution as an investment that would “make the Property productive [and] Figure 1. Englewood’s Connection to the City stimulate investment and employment…[for uses] including retail and commercial.” While new development in Englewood is encouraging, the fact that almost all new investment in the area has required substantial public subsidy is evidence of poor market conditions and the need for continued financial support from the City. The City’s investment in Market 63 will increase FC’s project feasibility and yield significant community benefits in the short- and long-term, including reducing future reliance on public subsidy.

Site Description The Site is composed of multiple parcels as shown in Figure 2. Two buildings, a parking lot, and a drive-thru occupied by US Bank are located on the south side of 63rd Street. Across Halsted Street to the east are several buildings that were recently constructed for Kennedy-King College on the east side of Halsted Street. Key forms of access to the Site are through Chicago Transit Authority (“CTA”) bus and rail stations, as well as the 63rd Street exit of the Dan Ryan Expressway (I-94). The CTA Green Line runs through Chicago’s central business district, and serves as a critical transportation link between the west and south sides of Chicago.

Englewood Chicago Loop Expressway Bus Route CTA Green Line Midway Airport University of Chicago

Community Profile Just south of the intersection of Halsted Street and 63rd Street is the Halsted Green Line “L” stop. In October 2014, average weekday ridership for this stop was 869 people, a relatively low boarding count compared to similar areas like the Green Line station at 35th-IIT which had 2,492 average weekday boardings. However, as Englewood continues to develop, the Site will be well positioned to further tap into the Green Line’s overall weekday ridership of 41,845 people. The #63 CTA bus runs east-west on 63rd Street and the #8 bus runs north-south on Halsted Street. Weekday ridership in 2014 on the #63 and #8 buses were 17,763 and 21,737 people, respectively. In October 2012 (the only available data for boardings by stop), the #63 bus had 2,375 boardings at the Site and the #8 had 1,619 boardings. In total, 4,863 transit riders board near the Site every weekday. Vehicle traffic count on 63rd Street is 18,400 cars per day and vehicle traffic count on Halsted Street is 10,900 cars per day. The relevance of the site traffic is discussed in the Retail section of the proposal.

Project Scope The City has issued a request for proposal for development of the Site with the following goals in mind: • Synergize with the adjacent ES project • Create local employment opportunities • Generate new tax increment for the City • Activate the entire Englewood commercial corridor The following details the analysis and framework of FC’s proposed development for the Site. Figure 2. Market 63 Site S HALSTED STREET

0.69 Acres

1.33 Acres Parcel A

1.40 Acres

0.6

9A cre s

Parcel B(1)

Parcel C

Parcel B(2)

1.78 Acres

Parcel D

9 7 W 63RD STREET

W 63RD STREET

1/4

E MIL

S DIU RA

Whole Foods Starbucks

Chipotle

S HALSTED STREET

WIC Food Center

US Bank

Kennedy-King College

Walgreens

Market 63 Site

Dunkin’ Donuts

ALDI

Parcel CTA Halsted Green Line Station

Community Profile Planning for Community Needs In generating diﬀerent scenarios for the Site concept, FC compiled relevant community plans and news articles to help reﬂect the community’s desires in planning for the Site. Unfortunately, both time constraints and HEEF regulations did not allow for more traditional forms of community outreach and needs assessment.

Existing Community Plans Title - Englewood Quality of Life Plan Author - LISC, Teamwork Englewood, Year - 2005

Camiros, Kym Abrams Design

The Englewood Quality of Life Plan (“EQL Plan”) is a five-year plan for the Greater Englewood community with an emphasis on development of the Halsted Street and 63rd Street intersection. The plan was developed over the course of 18 months, and included extensive outreach to residents, businesses, churches, and social service agencies. Though the plan only had a five-year outlook, many of its findings and recommendations can still be used to address community needs and inform future projects.

Figure 3. EQL Plan

Image of suggested African American marketplace and arch signage. LISC Englewood Quality of Life Plan.

The EQL Plan recommendations that most informed FC’s direction included suggestions for quality retail and an AfricanAmerican marketplace, as seen in Figure 3. Recommendations for returning vacant land to productive use included more recreation areas (especially for youth and seniors), along with artist space and performance equipment (e.g., movable stage). Economic development proposals included job training programs for formerly incarcerated residents and helping businesses attain the space and facilities needed to meet community needs. The economic conditions in Englewood that spurred the EQL Plan’s recommendations in 2005 have remained largely the same. Many of the elements of the Market 63 concept, including dedicated artist space, recreation areas, and workforce development opportunities for the underserved, will advance the goals of the plan. Title - Green Healthy Neighborhoods Author - Chicago Metropolitan Agency

for Planning, Chicago Department of Planning, LISC, South East Chicago Commission, Washington Park Consortium and Teamwork Englewood Year - 2014 The Green Healthy Neighborhoods Plan (“GHN Plan”) is a long-range community and economic development plan for Englewood and six other south side communities. FC’s plan supports several of the GHN Plan’s recommendations. For example, Market 63 embraces the value of retail options around transit stations and key arterial streets, increasing residents’ access to needed goods and services. FC also supports the GHN Plan’s recommendation of increased recreation opportunities and green infrastructure. Market 63 will integrate several unique green infrastructure projects—including a green roof and bioswales— into the Site design, and will use recreational spaces to support FC’s commitment to healthy living.

Other Resources of Community Needs In a Chicago Tribune election questionnaire, Alderman Toni L. Foulkes voiced support for using a mix of ﬁnancial resources (city and state), including TIF funds, “to bring jobs and opportunity to [her] ward.” Also, in the name of economic development, she would like to rebuild attractive infrastructure, such as sidewalks and landscaping, while simultaneously discouraging types of businesses that the community does not want, such as “pawn shops.” In a Washington Post article in November 2014 regarding the Whole Foods at ES, Glen Fulton, head of the Greater Englewood Community Development Corporation (“GECDC”), announced that Whole Foods would be the anchor that Sears once was and that he would like to see more retail and basic goods on the site. Fulton’s examples included Corner Bakery, Gap, and Famous Dave’s BBQ, and family and senior housing.

Market Research FC moved into the market research phase of our process operating under two guiding principles. First, the Site would require our team to develop a unique concept with an innovative ďŹ nancing package due to challenging market conditions. Second, the City wanted to see a transformative project that could revive commercial activity in the area and bring economic as well as social beneďŹ ts to the community. With these principles in mind, FC conducted an in-depth market analysis to determine what type of retail activity the market could support.

Assessing Conditions Demographics Nearly 30,000 people live within one mile of the Site as seen in Figure 4. That radius encompasses most of Greater Englewood, the residents of which are generally young, low-income, and have low educational attainment. Figure 5 illustrates the household income which has a median of about $18,000, well below the City average of about $57,000. Figure 6 reďŹ&#x201A;ects the age demographic, which has a median of 32, close to the City median of 34. Additionally, Figure 7 shows that only 13% of residents have college degrees, well below the City-wide level of 32%. Figure 5. Household Income within a 1 mile radius

73%

< $35K

Figure 4. Population

ple o pe

12%

$50K to <$100K

12%

$100K or more

le op e p

29,609 p

393 ,91 7

79 4,1 24

within a 1, 3, & 5 mile radius

$35K to <$50K

ple eo

Figure 6. Age within a 1 mile radius

34%

0 to 19

20%

20 to 34 35 to 44

11%

45 to 54

13% 22%

55 +

Figure 7. Education within a 1 mile radius

60% High School or Less

27% Some College

13% College Graduate

Source: U.S. Census, Census 2010 Summary File 1

Market Research Existing Retail and Community Assets

Figure 8. Englewood Market Analysis

Existing retail in the immediate area includes national and local fast food chains, grocery stores, pharmacies, clothing retailers, and auto parts as seen in Figure 8. Notable locally-owned businesses include Kusanya Cafe and Dream Cafe, which oﬀer healthy food in a sit-down dining environment. Whole Foods, Starbucks, Chipotle, T-Mobile and other new retail will open September 2016 as a part of the ES project. The area also beneﬁts from a variety of community assets, some of which are listed below:

• • •

Schools: Kennedy-King College as highlighted in Figure 8 (built 2007) Community organizations: Greater Englewood Community Development Corporation (established 2009) Housing developments: Englewood Apartments (built 2010), Hope Manor II for veterans (built 2014) Health care: St. Bernard Hospital (new building slated to open Summer 2016)

In the near future, the neighborhood will also see a new elevated recreation trail called the ERA Trail, or the Englewood Line. The trail will be designed similarly to the 606 Trail on the Northwest Side of the City, and will run along abandoned railroad tracks between 58th Street and 59th Street. There will be an entrance to the trail on Halsted Street a half-mile away from the Site.

SWOT Analysis FC conducted a SWOT analysis in order to better understand the assets and gaps that exist in Englewood, as well as to learn from and integrate projected opportunities and threats into our team’s proposal. Despite challenging demographic conditions, recent community investments by both the private and public sector demonstrate the strong momentum the area is experiencing. The SWOT Analysis can be seen in Figure 9.

#8 Halsted bus sees an average of 1, 619 riders per month

Dream Cafe

Women, Infant and Children Center

Hope Manor II

TEAM Englewood High School Antioch Haven Homes

Englewood Apartments

63rd 6 3 Street et Halsted Street Street

•

63rd Street bus sees an average of 2,375 riders per month

ERA Trail

I & S Wine & Spirits

Orchard Place of Engleood

Kennedy-King College

Prairie Haven Homes

St. Bernard Hopital

Greater Englewood Community Development Corp

Halsted Green Line L stop has an average of 869 boardings per month

Site Retail Community Asset Education

Figure 9. SWOT Analysis

Easy access to highway and public transit. 275 feet of main street frontage on 63rd St. which has decent traﬃc count Several newer developments in the area. Kennedy King College attracts students and young professionals

S O High demand for food options Repurpose the fire house Job creation Community involvement Budding urban agriculture movement Community is a targeted revitalization area for the City

Low-income area High-crime area Awkward, immobile open spaces Low density Depressed economy/high unemployment (especially young people)

w T Unaﬀordable products Security concerns Challenge finding anchor retailer Population decline Public perception of community/ negative media attention Housing market volatility/high vacancy and foreclosures

Market Research Eliminating Unsuitable Uses Based on the SWOT Analysis illustrated earlier and based on application of simple economic concepts of supply and demand, FC eliminated the following uses for the Site.

Oﬃce • • •

The Site is too far from the City’s central business district, making it inconvenient for a large workforce pool to commute to from around metropolitan Chicago; Office space generates little to no sales tax revenue for the City, making it difficult to justify as eligible for TIF financing; Office space that the Site could support would offer little in the way of transforming the community’s economic condition Figure 10. Health and Wellness Service Providers

Healthcare • •

•

There are several existing health and wellness service providers in close proximity to the Site, shown in Figure 10 Many basic health and wellness services are provided for free for uninsured individuals through some of the existing service providers. Alternative medical treatment providers such as chiropractors, acupuncturists, and yoga instructors typically target higher income communities because their services are not typically subsidized or covered by insurance.

near the Site

Name

Sponsor/Operator

Ross Dialysis - Englewood

Fresenius Medical Care

Distance (Miles) 0.10

CommunityHealth

0.20

YWCA

YMCA

0.20

CVS Pharmacy

CVS

0.20

Englewood Neighborhood Health Clinic

City of Chicago

0.20

Englewood Satellite Senior Center

City of Chicago

0.20

WIC

USDA

0.20

Walgreens Pharmacy

Walgreens

0.20

St. Bernhard Hospital

Catholic Health International

0.80

Sinai Medical Group Ashland

Sinai Health System

1.20

Planned Parenthood

1.30

Industrial • • •

While a retail shopping center is being developed adjacent to the Site, the Site is surrounded by residential property to the north and west with no major physical or visual buffer. Like many low-income communities, Englewood does not have a big enough pool of skilled labor sufficient to sustain the needs of most manufacturers. Industrial uses do not generate significant foot traffic for area business, and are detrimental to the overall aesthetic of a site.

Housing • • •

According to the GHN Plan discussed earlier, the existing housing stock in Englewood is sufficient to support projected demand through 2040. Several for-profit and nonprofit organizations are actively addressing the need for quality housing in Englewood using public sector funds to acquire and renovate physically distressed housing units for low-income residents. With nearly one in every three residential buildings in close proximity to the Site boarded up, the vacancy of the immediate surrounding area is estimated to be over 31.8%.

Market Research Retail Once the research on general market conditions in the area was complete, FC spent more time analyzing the retail potential of the Site. The retail analysis included learning more about planning eﬀorts for ES, comparing the Site to similar developments in the City, and conducting research to identify a national retailer to serve as the Site’s anchor tenant.

Learning about Englewood Square In anticipation of community-specific development challenges, FC sought out useful information from the ES project, where several prominent retailers are opening new locations despite poor market conditions. Here are some things our team learned about the efforts of a few of the retailers coming into ES: • Whole Foods has invested significant resources into gaining the interest and trust of the local community by organizing community events, encouraging local entrepreneurs to pitch potential products to the store for resale, and hiring a local resident as their community engagement specialist. • Starbucks will “reserve space in or near the Englewood store for younger workers to receive across-the-board customer service training.” It is evident that Whole Foods and Starbucks are being intentional about building positive relationships with community residents. In addition to making price and product adjustments to accommodate the local demographic, retailers have also realized the importance of addressing “big picture” community issues such as Englewood’s lower skilled workforce in order to build local support for ES.

Comparison of Similar Markets In addition to understanding retail conditions around the Site, FC examined demographic and retail data from comparable areas of Chicago. Retail developers often use this data to create an analogous matrix, which helps them to determine what the market could support in a given target area. The Market 63 Analogous Matrix in Exhibit A compares the area around the Site to three similar retail areas: • 87th Street and the Dan Ryan Expressway in Chatham • 95th Street and Western Avenue in Beverly/Evergreen Park • 35th Street and Martin L. King Drive in Bronzeville The Market 63 Analogous Matrix shows that the one-mile area around the Site lags far behind the other comparable areas in terms of disposable income, but compares positively in regards to the number of employees and vehicle and transit counts. Interpreting the Matrix suggests that while traditional national retailers may not best ﬁt the Site due to various socioeconomic indicators, the Site could support small businesses due to the existing pool of employees and traﬃc volume.

Search for a National Anchor One of FC’s most collaborative stages of the concept development process was the search for an anchor retail tenant. FC sought advice from professional and academic advisors, as well as insight from successful retail developers and brokers. FC recognized the importance of having an anchor tenant. An anchor tenant will ease the overall lease-up process of the development because it will generate enough traﬃc to support other retailers. With an easier lease-up process, lenders will view the project as less risky and thus consider ﬁnancing the project. FC’s Anchor Tenant Criteria FC used three primary criteria to generate a list of potential anchor tenants: leakage recovery, median household income threshold, and meeting community needs. Leakage recovery and median household income are metrics that retailers consider in evaluating the economic viability of their business in a given location. FC added the third metric of meeting community needs to see if a certain retailer has the potential to transform the economic base of the community. In addition to these criteria, FC considered unique challenges that each retailer might face at the Site. Figure 11 summarizes the anchor tenant search process.

Market Research Figure 11. Anchor Tenant Search Site Selection Criteria Candidate

Leakage

Median Household Income

Community Needs

Additional Notes Pro

Con

Chuck E. Cheese’s

1/4 population below 15 years old

Not franchising in the U.S.

Old Navy

Major lack of quality clothing stores

Prefer co-locating with other clothing retail but not enough room for another on the Site

Marshall’s

Major lack of quality clothing stores

Prefer co-locating with other clothing retail but not enough room for another on the Site

Ross Dress for Less

Major lack of quality clothing stores

Prefer co-locating with other clothing retail - but not enough room for another on the Site. Performs better in Hispanic markets

GNC

Supports health initiatives in area

Not aﬀordable or essential for community

PetSmart/PetCo

No pet supply store in area

Less than 6% of population visited one of the pet supply stores in the last 12 months

Target

Lack of quality general retail

Only smaller Target Express would fit on the Site

Goodwill

Highly aﬀordable retail. Would also relocate current Englewood job training operations to the Site

Insuﬃcient “donor” income population to sustain its retail operations

AutoZone/Pep Boys

Fits market income

O’Reilly located less than 1/2 mile away

Five Below

Fits market income

10 “dollar” stores within 2 mile of the Site

Match between retail and site?

Maybe

Yes

Conclusion: A Different Type of Anchor After synthesizing the research, FC determined that none of the national retail candidates considered were a good fit for the Site. Even while some prospects matched based on the three criteria discussed earlier, they had specific locational requirements that could not be met at the Site. Eliminating such traditional anchors led FC to pivot the team’s concept toward non-traditional retail anchors that have transformed low-income communities both economically and socially. Professional advice guided FC to conduct further research on locally-owned and community-driven retail options, such as open-air food halls, shared-kitchens, and flea markets. The following section details FC’s proposal based on this research.

Proposed Development: Market 63 Concept Market 63 draws on the past, present, and future of Englewood. The concept pays homage to the African-American culture and heritage that is deeply rooted in the community, using innovatively designed communal spaces to bring people together to eat, work, and play. FC has been intentional about using community assets in Englewood—Kennedy-King College, transportation infrastructure, and the momentum behind greening urban space—to shape our team’s concept and provide opportunities that complement the strengths of the area. Market 63 dares to imagine a better future for Englewood, and charts the community on a path toward long-term economic health and growth. Any parents will be able to walk over to Halsted Plaza to drink a coﬀee on the outdoor patio while they watch their kids play on a safe and modern playground in the Recreation Space. Students will be able to attend a local art showing at the Green Street Community Center, and end the day at the Public Market to enjoy an aﬀordable dinner from some of the best up-and-coming chefs in the area. Designed to provide revenue generating uses that serve residents and support Englewood’s economic growth, as shown in Market 63 will consist of four main components: 1. Halsted Plaza 2. Recreation Space 3. Green Street Community Center 4. Public Market

Figure 12,

2 3

2 4

Figure 12 11

Proposed Development: Market 63 1. Halsted Plaza Halsted Plaza, illustrated in Figure 13, will be comprised of a block of one-story, masonry constructed storefronts totaling 30,000 rentable square feet of retail space. The spaces will be occupied primarily by local “mom-and-pop” businesses that have established themselves in low-to-moderate income communities in the Chicagoland area, as well as potential regional or national chains that have had success in neighborhoods of similar demographic composition as Englewood. The main focus will be on dining, as Englewood has some of the fewest full-service restaurants of any community in the City. Examples of local restaurant chains that we believe are viable options for Halsted Plaza include: • Giordano’s Pizzeria (located throughout Chicagoland) • BJ’s Market (located in Chicago’s Calumet Heights and Auburn Gresham neighborhoods) • Chicago’s Home of Chicken and Waffles (located in Chicago’s Bronzeville neighborhood and the suburb of Oak Park) • Tropic Island Jerk Chicken (located in Chicago’s South Chicago Neighborhood and the suburb of Calumet City) • Lem’s Bar-B-Q (located in Chicago’s Chatham neighborhood) In order to make the space more appealing to these restaurants, FC is proposing wide sidewalks to accommodate patio space during Chicago’s warmer season, and facades facing the Recreational Space as discussed in the following section. Plans to enliven and beautify the space include planting several trees and bushes along the sidewalks and storefronts. Awnings will be constructed to provide shade and pathway lighting will illuminate the outdoor space at night, providing additional security. These restaurants will benefit from the visibility provided by foot and vehicle traffic associated with ES. Furthermore, students from Kennedy-King College, who have previously limited to a handful of fast food options outside of the Collegerun Sikia restaurant, will be likely patrons of these new establishments. Through these complementary relationships with ES and Kennedy-King College, Halsted Plaza will organically develop into a dining destination for the community.

Figure 13

View of Halsted Plaza looking southwest from Halsted Street and Halsted Parkway

Proposed Development: Market 63 Beyond the dining experience, FC explored other kinds of retailers that would consider opening in a low-income community, as well as nonprofit organizations that conduct their business out of storefronts. Such businesses include beauty salons, health food shops, and tattoo parlors. FC also believes that retail-style offices for professional services that are scarcely found in the area, such as legal, accounting, or insurance, are financially viable options for Halsted Plaza. There are also examples of non-profit retail stores that have dual missions to both turn a profit as well as provide a unique service to the community. One such organization is DreamBikes, which is the nonprofit arm of Trek Bicycle. DreamBikes is a retail bicycle shop that refurbishes donated bicycles and resells them at a deep discount. Additionally, DreamBikes provides hands-on technical and business management training to neighborhood youth, a service they would not necessarily receive while working in a normal retail environment. DreamBikes has helped improve two low-income, high-crime neighborhoods in Madison and Milwaukee, WI, making the organization a natural fit for Market 63.

2. Recreation Space FC proposes installing landscaping, bioswales, picnic seating, illuminated trails, a sensory garden, and a children’s playground in order to activate the open space above the Site’s underground water retention tanks. Figure 14 shows how families will utilize this community space during the warmer months of the year, which will drive additional foot traﬃc to the retail shops and simultaneously enhance the neighborhood’s quality of life and visual aesthetic.

Figure 14

View of Recreation Space facing north from Peoria Street

Proposed Development: Market 63 3. Green Street Community Center A vacant firehouse built in the 1920’s that has been designated as a historic landmark is located in the heart of the Site. The firehouse consists of a masonry constructed building that is 9,000 square feet and two-stories high, situated on a 1.34 acre lot. FC will rebrand the firehouse as Green Street Community Center (“GSCC”). As seen in Figure 15, FC’s proposal for GSCC includes two components: Artist studios, a gallery, and event space; and a workforce development training center. Artist studios will be located on the second floor of the renovated firehouse. Artists will have the ability to showcase their work in a gallery on the first floor that will also double as an event space that can be leased for community events, social gatherings, and art exhibits. On the first floor 1,500 square feet will be occupied by Inspiration Kitchens (“IK”), including a commercial kitchen and office space. IK is a nonprofit organization that trains and hires individuals affected by homelessness and poverty in the food service industry. They currently have two restaurants in the Uptown and East Garfield Park neighborhoods, where they serve food to the general public in a sit-down restaurant environment. The East Garfield Park location also houses a catering kitchen that services primarily the Loop and West Loop neighborhoods. At Market 63, FC is proposing to install a catering kitchen only. IK has indicated that the catering kitchen component of their social enterprise is their only self-sustaining operation. For Market 63, the kitchen would primarily serve Hyde Park and other communities on the South Side. This is a win-win for the community because it offers a quality service to customers and provides opportunities for area residents to acquire skills and experience in a growing industry. The vacant lot adjacent to the firehouse will be turned into a parking lot to service Halsted Plaza’s patrons.

Figure 15

View of Green Street Community Center facing southwest

Proposed Development: Market 63 4. Public Market The concept for Public Market is inspired by Roux Carre—a market recently built in the low-income Central City neighborhood of New Orleans. Roux Carre, see Figure 16, is “an accelerator for emerging food-preneurs and a showcase for up-and-coming performing and visual artists.” Public Market, as pictured in Figure 17, will serve as a retail incubator for emerging chefs and other artisans wishing to establish careers in their trade. The building will oﬀer compact spaces for vendors to display and promote their products. Food vendors will prepare their products in a shared commercial kitchen, allowing them to avoid high barriers to entry that are usually associated with restaurant start-ups. Public Market will complement the adjacent Whole Foods, where tenants will likely purchase ingredients needed for their operations. Potential for collaboration with Kennedy-King College’s Washburne Culinary & Hospitality Institute (“WCHI”) also exists, as Public Market provides a natural next step for many entrepreneurial-minded graduates of their program. Public Market consists of a 19,800 square foot masonry-constructed building with 26-foot ceilings. Approximately 40% of the building will be rentable storefront space (7,980 square feet), while the rest will be common areas such as the shared kitchen and the dining court. Vendors’ individual spaces will face both the parking lot as well as an interior court where patrons can sit and enjoy their meals. Hours of operation for the shops will be from the morning into the early evening, allowing for the court to have a secondary use as an event space in the evenings. With built in projectors and ample seating for a large crowd, the Market will be a convenient location to host events ranging from birthday parties to weddings to movie screenings.

Figure 17

Figure 16. Examples of Public Markets

Top left to bottom right, Roux Carre, Milwaukee Public Market, Ferrying Building Marketplace, Westside Market

View of Public Market facing northeast

Proposed Development: Market 63 Additional Features Sustainability FC took an environmentally-conscious approach in its design of Market 63. Light structures made from recycled materials and native plants are utilized on the berms to create a comfortable and relaxing space for patrons to spend time while shopping and exploring. To reduce flooding and excessive water runoff from the berms, swales have been dug out around their bases. These swales are a dry bed of porous materials and hardy landscaping that catch excess water during heavy rainfall events, providing a sustainable and effective way to control flooding. Market 63 also incorporates a green roof on Halsted Plaza and solar panels on Public Market to decrease the development’s carbon footprint and align with sustainability goals recommended in existing community plans.

Streetscaping Streetscaping is an important and effective way to encourage pedestrian usage while simultaneously creating safer public spaces. Recently, the City and Site Design Group, ltd. broke ground on Chicago’s first shared street. This pedestrian-centric corridor of Argyle Street in the Uptown neighborhood will increase foot traffic and benefit small businesses located along a depressed commercial corridor. FC hopes to bring these same results to Englewood with the creation of a shared street along Peoria Street, from Halsted Street to Halsted Parkway as illustrated in Figure 18. Shared streets promote an environment where pedestrians take priority over vehicles, which encourages physical activity and a healthy lifestyle. Landscaped curb cuts and concrete planters serve a dual purpose of slowing traffic and beautifying the space. Paver crosswalks will also be used to encourage pedestrian traffic and create a sense of place on the Site.

Security In order to provide additional security for Market 63 patrons and tenants, FC proposes retaining a security company for the Site. The security company will provide an armed security guard to watch over Market 63 during hours of operation (7am11pm), 7 days a week.

Figure 18

View of streetscaping and gateway from Halsted Street

Zoning & Entitlement Analysis Market 63 falls within the C1-2 zoning district as shown in Figure 19. This district accommodates neighborhood commercial storefronts, and allows for a wider variety of business types than other zoning districts. To streamline the construction process, FC has made all efforts to comply with the City’s zoning code. All uses within Market 63 are permitted, with parking far above the zoning district’s minimum requirements. Given that all buildings are single-story, the floor area ratio is significantly below the allotted 2.2 maximum for the C1-2 district. FC also decided to implement building setbacks to allow for a high volume of pedestrian traffic and to increase the walkability of the Site. An analysis of Market 63’s compliance with the City’s zoning code was conducted and can be seen in Exhibit B.

Figure 19. Site Zoning S HALSTED STREET

W 63RD STREET W 63RD STREET

MIL 1/4

AD ER

IUS

PD Planned Development

B2-2 Neighborhood Mixed-Use B3-2 Community Shopping RS-3 Residential Single Unit (Detached) RT-4 Residential Two-Flat, Townhouse and Multi-Unit

S HALSTED STREET

C1-2 Neighborhood Commercial B1-5 Neighborhood Shopping

Englewood Mall Tax Increment Financing District Market 63 Site CTA Halsted Green Line Station

Marketing & Development Strategies Marketing Strategy FC plans to market each component of Market 63 to prospective tenants. The following outlines our plan. First, we will look to fill the Halsted Plaza component, as it will be the primary source of operating income for the entire development. For this component, we will execute the following: • Hire a broker to be the landlord’s representative in negotiating and procuring leases; • Prepare a press release and reach out to local media for exposure in the news; • Create a marketing brochure for distribution that highlights the Site’s strengths and opportunities (from the SWOT Analysis discussed in the Market Research section), and illustrates the spaces that are available; and • Distribute said brochures to prospective tenants as well as brokers, community organizations, churches, and chambers of commerce. Second, we will fill the Green Street Community Center via the following action items: • Contact Inspiration Corporation (parent of IK) directly to secure a commitment; • Reach out to artist communities throughout Chicago to promote the project and offer financial incentives to existing artists to relocate or expand; and • Similarly as above, engage local community organizations, churches, etc. To fill the Public Market, FC will employ many of the same strategies as discussed above in addition to the following: • Host events at Kennedy-King College to encourage students of the WCHI to open shop at the Public Market; • Engage other culinary arts schools throughout Chicagoland with similar tactics; and • Form a website and leverage social media outlets to garner interest from around the globe.

Development Strategy Site construction will take place in three phases as shown in Figure 20. During Phase I, FC will construct Halsted Plaza and the Recreational Space. Halsted Plaza will be a boon to the project’s operating income and put FC in a stronger financial position as it moves through phases II and III. Constructing the Recreational Space early on allows FC to establish the visual aesthetic of Market 63, and sets the community-driven tone that is woven throughout the other elements of the proposal. FC expects Phase I construction will take 12 months to complete. During month eight, FC plans to begin construction on the Green Street Community Center. The positioning of the Community Center for Phase II construction was a result of its central location within the Site and its strong communal and aesthetic connection to the Recreational Space. FC expects Phase II to be completed in month 12. Phase III construction of Public Market will begin in month 13 and will take 12 months to complete. Given its relatively smaller contributions to the project’s operating income, FC chose to construct Public Market last. FC took a conservative approach to defining lease-up periods for each component Market 63. Given the market conditions our Site will be operating in, our team felt that using more conservative numbers would allow us to move forward with confidence regarding the final Pro Forma and financial feasibility of our project. FC has the following lease-up schedule: 30% in year one, 75% in year two, and fully leased by end of year three. Figure 20. Construction Phasing Item

Construction of Halsted Plaza (Parcel A) Landscaping Improvements

Construction of Recreation Space (Parcel B) Rehab & Renovation of Green Street Community Center (Parcel C) Construction of Public Market (Parcel D)

Financial Analysis Capital Stack Figure 21a. Financing Sources Source

Amount

Figure 21b. Financing Sources Percent

TIF Funds

$5,000,000

30.60%

Permanent Bank Loan

$1,000,000

6.10%

Historic Tax Credit Equity

$276,215

1.70%

New Market Tax Credit Equity

$5,098,452

31.20%

Chicago Fund

$2,716,526

16.60%

Deferred Developer Fee

$250,000

1.50%

$2,000,000

12.20%

$16,341,193

100%

Historic Tax Credit Equity

Deferred Developer Fee Local Grants Total

Figure 22a. Financing Uses Source

Amount

Percent

$12,629,268

77.30%

Soft Costs

$3,008,318

18.40%

$703,608

4.30%

$16,341,193

100%

Total

Local Grants

Figure 22b. Financing Uses

Hard Costs Financing Costs

Permanetn Bank Loan

Soft Costs Financing Costs Hard Costs

TIF We expect to obtain roughly $5 million in TIF financing based on the following: • According to the City’s Englewood Mall TIF Projection Report, of the roughly $26 million in remaining TIF funds in the Englewood Mall TIF, $5 million has been earmarked for rehabilitation of the landmark firehouse at the Site. FC’s proposal requires significantly less money to rehabilitate the firehouse and therefore, the $5 million can be used for other portions of the total development, as illustrated in Figure 23. • FC estimates that Market 63, when completed, will generate roughly $195,000 in real estate taxes annually. This estimate is based on applying a $4.50 multiple against the 43,420 rentable square feet of Market 63 as detailed in the Pro Forma (see Figure 24). The $4.50 multiplier is derived from FC’s experience underwriting retail shopping centers. • Our proposal is in line with community plans and public official desires discussed in the Community Profile section of this proposal. Similar to FC’s Market 63 concept, the EQL Plan calls for job training, space for local businesses to get started, a marketplace, recreation space for seniors and youth, performance space, and arches for signage. Similarly, the GHN Plan identifies the Site as a “Commercial Retail Node” and recommends additional recreational and green infrastructure in the general area. Additionally, Alderman Foulkes’ laid out her desire to use a mix of public funds, including TIF, for quality economic development and infrastructure improvements, which Market 63 supports by creating the framework for job training and startup opportunities for local residents and businesses. • The proposed development will stimulate what is otherwise an economically depressed area of the City, spurring the potential for more tax revenue generating development in the neighborhood. As strong evidence for the need for public assistance in new development in the area, practically all of the new major projects have been all or partly built with public assistance. Just the more recent projects of Hope Manor II, Englewood Apartments, and Kennedy-King account for upwards of a quarter-billion dollars in public investments in the immediate area of the Site. Market 63 will build off of and strengthen the momentum that will eventually allow the market to fully drive and sustain new development.

Financial Analysis Figure 23. TIF Financing Uses Item

Amount

Eligible Expenses Trees

$68,000

Planters and Bushes

$18,000

Recreation Space (Parcel B)

$654,688

Streetscaping

$251,300

Financing Costs

$703,608

Green Street Community Center (Parcel C) Hard Costs

$1,125,000

Soft Costs

$1,181,936

Total

$4,002,531

Additional Uses Green Street Community Center (Parcel C) Parking Lot Green Street Community Center (Parcel C) Lighting Utility and Foundation Work Total Total TIF Funds Requested

$753,000 $5,000 $239,469 $997,469 $5,000,000

New Market Tax Credits We expect the total project cost to be considered a Qualiﬁed Equity Investment (“QEI”) to raise New Market Tax Credit (“NMTC”) equity because the Site is in an area with median household income at roughly 50% of area median income in the Chicago-Joliet-Naperville metropolitan statistical area. Although competition for such tax credits is signiﬁcant, Market 63 has the advantage of being in an area that, without public assistance, would continue to deteriorate based on FC’s research as described in this proposal. Furthermore, preliminary discussions with a VP of the Chicago Community Loan Fund indicated that the organization would consider FC’s proposal for NMTC. The QEI is the entire $16,341,193, which generates $6,373,065 (39% of QEI) in tax credits, paid over a 7-year period to the investor.

Historic Tax Credit Historic Tax Credit equity will be raised based on the costs associated with redeveloping the firehouse because the building has been designated as a historic landmark, as discussed earlier. We anticipate the equity investor to invest 95 cents per dollar of tax credit generated to generate a quick and secure return on investment. Qualified costs include 100% of the hard costs associated with rehabilitation of the firehouse ($1,125,000) and 10% of soft costs for the entire project ($328,764). The resulting tax credit is 20% of the qualified costs, or $290,753.

Neighborhood Opportunity Bonus The City plans to establish a new program of using density bonus payments downtown to generate more than $16 million annually for economic development eﬀorts in depressed neighborhoods. Market 63 would be a strong candidate for these funds because the project is revitalizing a low-income community with aﬀordable commercial space that will generate revenue for the City and have a meaningful positive impact on the neighborhood.

Deferred Developer Fee To reduce the upfront costs of the project, FC is proposing to defer 25% of the $1 million Developer Fee until the project has stabilized.

Local Grants In discussions with various local industry leaders in community lending, FC determined that Market 63 would be eligible for grants from local foundations and that $2-$3 million was a reasonable estimate. Examples of foundations that would ﬁnd Market 63 appealing for its community development features include the MacArthur Foundation, The Chicago Community Trust, and foundations established by major ﬁnancial institutions such as US Bank (whose branch is across the street from the Site). 20

Financial Analysis Construction Financing Recognizing that the tax credit equity, TIF financing, and the funding from the Chicago Funds would not be upfront, FC proposes obtaining construction financing during the 24-month interim period. FC believes it can secure a construction loan from the Chicago Community Loan Fund (“CCLF”) at roughly 60% loan-to-cost ($9,829,460). This sizable loan is attainable given both a) the magnitude of investment by major financial institutions in organizations such as CCLF in order to receive Community Reinvestment Act (“CRA”) credits that help such institutions’ bottom line, and b) Market 63’s purpose aligns with CCLF’s mission. For the remaining 40% ($6,366,761), FC will approach Fundrise, a crowdfunding source that provided $500,000 in financing to the adjacent ES development.

Cash Flow Figure 24. Pro Forma Net Operating Income Item

Lease Type

Net Rental Area

Per Square Foot

Annual Rent

Base Rents Market

Gross

7,920

$12.00

$95,040

Halsted Retail

NNN

30,000

$8.00

$240,000

Inspiration Kitchen

NNN

1,500

$6.00

$9,000

Gross

4,000

$12.00

$48,000

Artist Studios Total

$392,040

Reimbursements Taxes

31,500

$4.50

Insurance

31,500

$1.00

$31,500

CAM

31,500

$7.95

$250,288

Total

$141,750

$423,538

Other Income Event Space - Market

$24,000

Event Space - Firehouse

$3,000

Total

$27,000

Gross Potential Revenue Vacancy/Collection Loss

$842,578 10%

($84,258)

Eﬀective Gross Income

$758,320

Expenses Real Estate Taxes

43,420

$4.50

$195,390

Insurance

43,420

$1.00

$43,420

Management Fees

$0.69

$30,333

Common Area Maintenance

43,420

$7.95

$345,000

Structural R & M

43,420

$0.25

$10,855

TI/LC Reserves

43,420

$0.25

$10,855

Structural Reserves

43,420

$0.25

$10,855

$0.24

$10,000

Miscellaneous Total Net Operating Income

$15.183

$656,708 $101,612

Debt Service Mortgage (Principal & Interest Payment)

$83,065

Cash Flow After Debt Service

$18,547

Debt Service Coverage Ratio Dept Yield

1.22 10.16%

Financial Analysis Base Rent FC obtained an estimated market rent for Halsted Plaza from the amount Whole Foods Market will pay at ES, or $5.00 per square foot, triple net. Rents were adjusted upward for Halsted Plaza to reﬂect the additional risk of leasing to non-credit, local retailers. For Green Street Community Center artist studios, FC assumed a market $1.00 per square foot per month, gross. This is in-line with rents obtained in outskirt neighborhoods of Chicago’s South Side. For IK, we assumed a rent in between that of Halsted Plaza and the Whole Foods at ES.

Expenses Expenses were estimated based on FC’s experience in underwriting a variety of commercial real estate developments. Above and beyond traditional expenses for common area maintenance, as illustrated in Figure 25, FC assumed a security expense that will cover the cost of a manned vehicle from 7 AM to 11 PM, 7 days a week, as described earlier.

Figure 25. Common Area Maintenance Source

Amount

Utilities R&M

Per Square Foot

$60,000

$1.38

$145,000

$3.34

Security

$140,000

$3.22

Total

$345,000

$7.95

Debt Service Debt Service consists of the $1 million permanent bank loan, amortized over 20 years, at 5.50% fixed interest. FC based its assumptions on conservative estimates given market conditions. Typical commercial leases have 5 year terms with built-in 2-3% rent escalations. FC utilized a 1.75% growth rate for EGI to account for the vacancy loss, driven primarily by the expected high turnover at the Public Market. The 2.00% growth in expenses is in-line with expected inflation. The 40% tax rate is assumed to be the current corporate tax rate. The 12.00% required ROE is adjusted down from a typical, highrisk investment due to the magnitude of grants and various other subsidies embedded in the project’s financing.

Figure 26. Assumptions Source

Amount

EGI Growth Rate

1.75%

Expenses Growth Rate

2.00%

Required ROE

12.00%

Tax Rate

40.00%

Figure 27. NPV & IRR Source

Amount

NPV

$462,191

IRR

14.44%

Figure 28. Free Cash Flow $2,000,000

$1,500,000

$1,000,000

$500,000

Deposit

Year 1

Year 2

Year 3

Pro Forma (Yr 4)

Year 5

Year 6

Year 7

Year 8

Year 9

Terminal

$(500,000)

$(1,000,000)

$(1,500,000)

$(2,000,000)

$(2,500,000)

$(3,000,000)

City & Community Benefits Tax Revenue Growth Based on the Pro Forma Net Operating Income analysis, FC expects Market 63 to generate roughly $195,000 in additional property taxes, once stabilized. This would reﬂect a roughly 4% return on investment by the Englewood Mall TIF district. In turn, the City will be able to reinvest into the neighborhood, which is in desperate need of repopulation in order to sustain the momentum generated by the recent commercial developments, including Market 63. Additionally, the City will beneﬁt from an estimated $91,000 increase in Chicago sales tax revenue generated by the development’s retail tenants.

Community Development As FC went through the process of reﬁning a development concept, fostering community growth emerged as a central tenet of Market 63. FC was intentional about creating each of the four components of Market 63 to serve the City’s goal of promoting long-term community stabilization and revitalization. Most measurable will be the jobs created for local residents. Of particular importance is the impact that the Site will have for young people, who experience high rates of unemployment and underemployment in Englewood and surrounding communities. The retail options included in our ﬁnal proposal were carefully tailored to expand opportunities for this demographic; the food service and hospitality industries are often accessible to young people with limited work experience and emerging skill sets.

Economic Development Economic development is of chief concern to our team and the City. Future economic development is largely dependent on changing the perception that residents, businesses, and neighboring communities have of Englewood. Market 63 enhances the community’s social and visual composition, serving as a catalyst for further investment. Existing residents considering moving out of the community will decide that it is worth it to stay. They will invest in their homes and patronize businesses at Market 63, forming the relationship between resident and local business that is vital to a healthy, prospering community.

Exhibits Exhibit A. Market 63 Analogous Matrix within a 1 mile radius of intersection 63rd & Halsted Population

87th & Dan Ryan

95th & Western

35th & MLK

Total

28,833

22,938

17,580

33,890

Male (2010)

13,418

10,512

8,409

14,192

Female (2010)

16,184

13,466

9,232

17,698

Age

Median (2010)

32.3

42.6

41.0

36.5

Households

Total

9,766

9,056

6,287

15,568

2.91

2.53

2.79

1.96

Sex

Average Size Income

Median Disposable

$18,574

$41,077

$78,050

$25,945

Average Disposable

$29,160

$54,406

$104,271

$40,703

Ethnicity

Black

97.20%

97.30%

26.70%

61.40%

White

0.60%

0.50%

58.70%

7.50%

Latino

2.00%

2.10%

13.70%

22.10%

Education

Business

Transportation

Asian

0.20%

0.10%

0.90%

9.00%

Less than 9th Grade

5.60%

1.80%

6.40%

3.20%

9th - 12th, No Diploma

19.40%

2.80%

9.80%

8.80%

High School Graduate

29.40%

19.20%

16.30%

21.30%

GED/Alternative Graduate

5.20%

1.50%

4.80%

3.50%

Some College, No Degree

26.60%

26.90%

20.20%

23.10%

Associate Degree

6.00%

7.60%

6.60%

9.40%

Bachelor’s Degree

5.40%

23.40%

18.30%

16.30%

Graduate/Professional Degree

2.00%

23.50%

14.80%

10.80%

Total Businesses

608.00

473

807

804

Total Employees

6,094

4,558

9,736

10,622

Employee Population per Business

10.00

9.60

12.10

13.20

Residential Population per Business

47.40

48.50

21.80

41.10

Traﬃc Volume

63rd (EW 18,400) Halsted (N 10,500) (S 10,900)

87th (EW 25,500), Lafeyette feeder road (S 3,050), State St feeder (N 6,300)

95th (EW 29,800); Western (N 31,400) (S 28,600)

35th (EW 9,600); MLK (NS 9,450)

Transit Access

Green Line 0.2 miles, Halsted and 63rd Buses

Red line .3 miles, 87th and State (feeder road) buses

CTA buses, Red Line terminal 3 miles away

Green line .6mi, red line .8 mi, 2 NS buses, 87th bus

L Boarding (October 2014)

Green Line - 869

Red Line - 5,191

None

Red Line - 5,226 Green - 2,492

Bus Boarding (October 2012

#63 - 2,375 #8 - 1,619

#87 - 2,929 #29 - 500

#95W - 450 Pace 349 - data not available

#35 - 1,134 #3 - 19

Total Transit Boardings Name/Type of Co-Tenants

4,863

8,621

450

8,871

Co-Tenants

Whole Foods, Starbucks, Chipotle, Subway, DD, Aldi, Harold’s Chicken, Walgreen’s, Tru Value Hardware, Taxes, White Castle, Checkers, city Sports, Phone

Lowes, Home Depot,Walmart, Marshall’s, Starbucks, Food 4 Less, Jewell, Aldi, Dollar tree, subway, staples, Burlington Coat, Tax, UPS, McD, BK, BP, Harold’s, Chinese, Pizza, Phone, Bank, fish fast food, Autozone, movie theater

Sam’s, Menard’s, Meijer, Mariano’s Shoe Carnival, PetSmart Subway, Applebees, Chipotles, Dollar tree, Noodle Co, White Castle, Popeyes, McD, Oﬃcemax, Phone, Giordanos

Jewel, LA Fitness, Walgreens “Clinic”, UPS, Subway, Radioshack, Rainbow, Bank, White Castle, Tax, Ace, Popeyes, Phone, Just Fit Shoes, Dominos, McD, Harolds

Relevant Nearby Institutions

Kennedy King, WIC, US Bank, Small Hospital, 9 ATMs, 3 Schools, 3 Health Care Centers

7 Church’s, 8 ATM’s, 3 Medical Centers, 7 School’s

7 ATMs, 7 Health Centers, 2 Churchs, 2 Schools

IIT, White Sox stadium, 6 School’s, 5 Church’s, 1 Medical Center

Source: U.S. Census, Census 2010 Summary File 1

Exhibit B. Zoning Analysis Item

Standard

Existing

2.2

Proposed

Compliance Status

Floor Area Ratio Market

0.24

Halsted Retail

Compliant

0.53

Max Height Market

45 feet 50 feet

Fire Station

32 Feet

Halsted Retail

Compliant

18 feet

Front Setback Market

3 feet

Fire Station

30 feet

Halsted Retail

Compliant

5 feet - 10 feet (varies)

Side Setback Market

5 feet (West) 10 feet (East)

Fire Station

10 feet (West)

Compliant

15 feet (East) Halsted Retail

5 feet (West) NA (East)

Rear Setback Market

0 feet

Fire Station

15 feet

Halsted Retail

Compliant

Parking Market Sixty Three Development

0 for first 4,000 sq. ft.; then 2.5 per 1,000 sq. ft. 1 bike spot per 5 car spots

151 OďŹ&#x20AC;-street 52 On-street 6 Handicap 20 Bike

Compliant

Exhibit C. Cash Flow Analysis Market 63

Deposit

Year 1

Year 2

Pro Forma (Yr 4)

Year 3

Year 5

Year 6

Year 7

Year 8

Year 9

Terminal

$(500,000)

$500,000

NMTC Equity

(2,000,000)

(3,000,000)

$(98,452)

HTC Equity

$(276,215)

Deferred Developer Fee Expense, net of taxes

$(75,000)

EďŹ&#x20AC;ective Gross Income

$252,773

$631,933

$758,320

$771,591

$785,094

$798,833

$812,812

$827,036

Expenses

$(525,366)

$(591,037)

$(656,708)

$(669,842)

$(683,239)

$(696,904)

$(710,842)

$(725,058)

Net Operating Income

$(272,593)

$40,896

$101,612

$101,749

$101,855

$101,929

$101,971

$101,978

Income Tax (Expense)/ Benefit

$109,037

$(16,359)

$(40,645)

$(40,699)

$(40,742)

$(40,772)

$(40,788)

$(40,791) $(43,956)

Mortgage Interest

$(55,055)

$(53,453)

$(51,759)

$(49,967)

$(48,074)

$(46,072)

Interest Tax Shield

$22,022

$21,381

$20,703

$19,987

$19,230

$18,429

$17,582

Mortgage Principal

$(28,010)

$(29,612)

$(31,307)

$(33,098)

$(34,991)

$(36,993)

$(38,929)

Amortization Expense (non cash)

$278,258

$579,972

$629,972

$351,714

$50,000

Amortization Tax Shield

$111,303

$231,989

$251,989

$140,686

$20,000

Depreciation Expense (non cash)

$177,620

$294,389

Depreciation Tax Shield

$71,048

$117,755

New Market Tax Credits

$817,060

$980,472

Historic Tax Credits

$290,753

Free Cash Flow

$(500,000)

(1,776,215)

(2,690,452)

$1,086,902

$1,239,540

$1,162,250

$1,323,218

$1,284,308

$1,160,845

$1,138,067

$946,862

Present Value

$(500,000)

(1,585,906)

(2,144,812)

$773,635

$787,750

$659,492

$670,383

$580,956

$468,846

$410,399

$341,448

Exhibits Exhibit D. Development Budget (Excluding Financing Costs) Item

Cost

Acquisition Land

$1.00

Hard Costs Rehab/Construction Contingency

$11,481,153 $1,148,115

Soft Costs Design & Permits Architect

$344,435

Supervision

$150,000

Reimbursable Expenses

$25,000

Design Review

$25,000

Permit Expediter

$10,000

Construction Permits & Fees

$10,000

Code Review

$10,000

Due Diligence Legal - Zoning

$25,000

Appraisal

$10,000

Survey

$2,500

Financing Costs & Closing Loan Application Fee

$5,000

Consultant

$200,000

Tax Opinion

$15,000

Legal - Closing

$75,000

Legal - Closing/Lender

$15,000

Title, Mortgage Recording Fee

$10,000

Accounting /Audit/Cost Certification

$50,000

Construction Period Costs Construction Period Real Estate Taxes

$200,000

Construction Period Insurance

$150,000

Construction Period Interest

$279,500

Post-Construction Costs, Reserves & Fees Marketing & Leasing Rent-Up Reserve Operating Reserve Replacement Reserve Tax Escrow Insurance Escrow Developer Fee Total Development Costs

$85,000 $50,000 $350,000 $50,000 $100,000 $41,200 $1,000,000 $15,916,903

Exhibits Exhibit E. Construction Budget Item

Square Feet

Number

Price Per Unit

Total

Halsted Plaza - Parcel A Building

30,163

Concrete

18,500

Trees Planters Lights (path, store front lighting, street) Total

$120

$3,619,560

$10

$185,000

$500

$3,500

$750

$18,000

$250

$9,000

$15

$452,445

$194,063

30,163

Recreation Space- Parcel B Berm Grass

48,516

Benches

$500

$5,000

Lights (landscaping/path lighting)

$250

$12,500

$105,000

Bushes

$200

$10,000

Trees

$500

$9,000

$25

$300,000

$15

$19,125

Flower/Grasses

Playground Bioswales Total

17,500

12,000 1,275 79,291

128

Green Street Community Center - Parcel C Firehouse

9,000

$125

$1,125,000

Parking Lot

37,650

$20

$753,000

Lighting

$250

$5,000

Trees

$500

$30,000

Benches

$500

$7,000

$15,000

Water Feature Miscellaneous Total

$50,000 46,650

Public Market - Parcel D Building

19,800

$150

Solar Panels

3,250

$100

$325,000

Parking Lot

58,608

$20

$1,172,160

$1,000

$12,000

$500

$4,000

$10

$28,500

$500

$30,500

$11,800

Lights Trees Total

81,658

$2,970,000

Medians Concrete

2,850

Trees

Foe Brick Paver Crosswalks

2,950

Total

5,800

Construction Budget Total

$11,481,153

Exhibits Exhibit F1. Construction Loan Month

Beginning Crowdfunding Balance Crowdfunding funding Interest Accrued on Crowdfunding Ending Crowdfunding Balance

$153,610

$156,459

$159,337

$162,243

$165,178

$368,143

$573,137

$1,002,535

$1,436,227

$1,874,256

$2,316,666

$548,129

$199,320

$419,472

$5,481

$3,529

$3,558

$3,587

$3,616

$3,645

$5,675

$9,926

$14,220

$18,557

$22,937

$27,361

$153,610

$156,459

$159,337

$162,243

$165,178

$368,143

$573,137

$1,002,535

$1,436,227

$1,874,256

$2,316,666

$1,963,499 $3,332,903

Beginning Construction Loan Balance

$222,193

$221,173

$220,152

$219,132

$218,111

$517,091

$816,070

$1,445,278

$2,074,486

$2,703,694

Construction Loan Funding

$822,193

$298,979

$629,208

Ending Construction Loan Balance

$222,193

$221,173

$220,152

$219,132

$218,111

$517,091

$816,070

$1,445,278

$2,074,486

$2,703,694

$3,332,903

$2,762,111

Interest Accrued On Loan

$1,220

$1,215

$1,209

$1,203

$1,198

$2,840

$4,482

$7,937

$11,393

$14,848

$18,304

$15,169

Beginning NMTC Balance

NMTC Funding

$2,000,000

Ending NMTC Balance

$2,000,000

Beginning Grants Balance

$500,000

$1,000,000

$1,500,000

$2,000,000

Grants Funding

$500,000

Ending Grants Balance

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,000,000 $1,000,000

Beginning TIF Funds Balance

$1,000,000

TIF Funds Funding

$1,000,000

Ending TIF Funds Balance

$1,000,000

Beginning NOB Balance

NOB Funding

Ending NOB Balance

Exhibit F2. Construction Loan (Continued) Month

$1,963,499

$1,395,685

$1,622,192

$1,850,965

$2,082,025

$2,315,396

$2,151,101

$2,385,162

$2,621,565

$2,860,331

$3,101,485

$3,345,050

$1,551,051

$210,446

$21,739

$16,061

$18,326

$20,614

$22,925

$25,258

$23,615

$25,956

$28,320

$30,708

$33,119

$35,555

Ending Crowdfunding Balance

$1,395,685

$1,622,192

$1,850,965

$2,082,025

$2,315,396

$2,151,101

$2,385,162

$2,621,565

$2,860,331

$3,101,485

$3,345,050

$1,551,051

$254,574

Beginning Construction Loan Balance

$2,762,111

$1,877,780

$2,193,449

$2,509,119

$2,824,788

$3,140,457

$2,856,126

$3,171,796

$3,487,465

$3,803,134

$4,118,803

$4,434,473

$1,690,142

$315,669

$1,877,780

$2,193,449

$2,509,119

$2,824,788

$3,140,457

$2,856,126

$3,171,796

$3,487,465

$3,803,134

$4,118,803

$4,434,473

$1,690,142

$(254,574)

Beginning Crowdfunding Balance Crowdfunding funding Interest Accrued on Crowdfunding

Construction Loan Funding Ending Construction Loan Balance

Interest Accrued On Loan

$10,313

$12,046

$13,780

$15,513

$17,247

$15,686

$17,419

$19,153

$20,886

$22,620

$24,354

$9,282

Beginning NMTC Balance

$2,000,000

$5,000,000

$3,000,000

$98,452

Ending NMTC Balance

NMTC Funding

$2,000,000

$5,000,000

$5,098,452

Beginning Grants Balance

$2,000,000

Beginning TIF Funds Balance

$1,000,000

$2,000,000

$3,600,000

TIF Funds Funding

$1,000,000

$1,600,000

$1,400,000

Ending TIF Funds Balance

$2,000,000

$3,600,000

$5,000,000

$1,000,000

$2,000,000

$2,500,000

Grants Funding Ending Grants Balance

Beginning NOB Balance NOB Funding

$1,000,000

$500,000

$216,526

Ending NOB Balance

$1,000,000

$2,000,000

$2,500,000

$2,716,526

Permanent Bank Loan

$1,000,000

Historic Tax Credit Equity

$276,215

Deferred Developer Fee

$250,000 $16,341,193

Assumptions Interest Rate on CCLF Loan Interest Rate on Crowdfunding

6.50% 12.00%

Acknowledgments & Sources Acknowledgments The Full Circle team wishes to thank the following people for their generous assistance in sharing their knowledge, time, and expertise:

• • • • •

Dr. Rachel Weber, Faculty Advisor and Professor of Urban Planning at the University of Illinois, Chicago Janet Johnson, Legal Advisor from Schiﬀ Hardin Andy Ahitow, Industry Advisor from Chicago Apartment Finders Steve Rachmann, Industry Advisor from Marcus & Millichap Mariana DeWeese, LLM Candidate, John Marshall Law School

FULL

CIRCLE DEVELOPMENT PARTNERS

Additional Acknowledgments • Richard Tucker • Aaron Tucker • Allen Joﬀe • Adam Secher • Peter Holsten • Stacey Sutton • John Vance • Gary Greenfield • Bruce Martin • Maurice Williams • Billie Torrentt • Marc Babladelis • Jennipher Adkins • UIC’s Englewood TOD students

Text Sources

Image Sources

WBEZ. www.wbez.org/blogs/john-r-schmidt/2012-05/englewood-past-and-present-99518. Volunteers of America Illinois. http://www.voaillinois.org/hope-manor-ii; Englewood Portal. http://www. englewoodportal.org/news/1584; Public Building Commission - Chicago. http://www.pbcchicago.com/content/ about/press_detail.asp?pID=313 Chicago Department of Housing and Economic Development. http://www.cityofchicago.org/content/dam/city/ depts/dcd/tif/T_021_HalstedParkwaysCDC.pdf. CTA. http://www.transitchicago.com/ridership. CTA. http://www.transitchicago.com/ridership. City of Chicago Data Portal. https://data.cityofchicago.org/Transportation/Average-Daily-Traffic-Counts-Map/ pf56-35rv elections.chicagotribune.com/candidates/toni-l-foulkes/ www.washingtonpost.com/news/wonk/wp/2014/11/14/why-whole-foods-is-moving-into-one-of-the-poorestneighborhoods-in-chicago/ Cook County. www.connecttocook.cookcountyil.gov. EASI/MRI Consumer Expenditure Data 2016 Cook County. www.connecttocook.cookcountyil.gov. DNA Info. Kusanya Cafe To Offer Rare Sit-Down Dining in Englewood. October 30, 2013 Chicago Defender. Chicago’s Dream Cafe: The Reality of Good Food in Englewood. July 1, 2015 Public Building Commission of Chicago. http://www.pbcchicago.com/content/projects/project_detail. asp?pID=JC-13 GECDC. https://greaterenglewoodcdc.wordpress.com Mercy Housing. www.mercyhousing.org Volunteers of America - Illinois. www.voaillinois.org St. Bernard Hospital. www.stbh.org DNA Info. A Bloomingdale Trail for Englewood? City Moves To Get Train Tracks for Park. September 15, 2014. Cook County. Community Profile (2016) www.connecttocook.cookcountyil.gov Chicago Tribune, 1/7/2016, “Whole Foods gets personal in effort to impress Englewood” Chicago Tribune, 7/31/2015, “Starbucks comes to Englewood” Cook County. www.connecttocook.cookcountyil.gov. Yelp.com www.dream-bikes.org City of Chicago Landmark Designation Reports: https://archive.org/stream/ CityOfChicagoLandmarkDesignationReports/HistoricChicagoFirehouses_djvu.txt https://rouxcarre.com/ Illinois Policy. https://www.illinoispolicy.org/emanuels-building-proposal-misses-the-mark-on-chicago-zoningreform/. Chicago Community Loan Fund. http://www.cclfchicago.org Chicago Tribune, November 6, 2015; http://www.chicagotribune.com/business/ct-whole-foods-crowdfundingenglewood-1109-biz-20151106-story.html

South Side Masonic Temple (WEBZ 91.5 Blog) Englewood Sears (Chicago Tribune) Halsted and 64th, 1955 (WBEZ 91.5 Blog) Wieboldt’s Branch Store, Englewood 1930 (The Department Store Museum) Southtown Theatre (Cinema Treasures) Image of suggested African American marketplace and arch signage (LISC Englewood Quality of Life Plan) Roux Carre (The Advocate) Roux Carre (WNO 89.9 New Orleans Public Radio Blog) Milwaukee Public Market (The Odyssey Online) Ferry Building Marketplace (Square Door) Westside Market (Smithsonian)

Meet the Team

Katie McMahon

Charles Dabah

Ian Brown

Katie is a 2nd year MUPP from Indiana studying urban design and spatial planning. She hopes to one day work in land use planning in the Chicago-land area.

Charles is a 2nd year full-time MUPP student concentrating in community development. He currently works at the Metropolitan Mayors Caucus and the Voorhees Center for Neighborhood and Community Improvement doing research and analysis on housing policy projects.

Ian is in the Masterâ&#x20AC;&#x2122;s of Urban Planning Program focusing in Transportation and Economic Development. He moved to Chicago after getting his law degree at Louisiana State University. He hopes to pursue a legal-related career in real estate and/or transportation.

Omare Villagrana

Trisha Stevens

Daniel Kiss

Omare Villagrana is currently completing his Masterâ&#x20AC;&#x2122;s in Business Administration. One day, he aspires to own multiple properties and sees himself as a real estate developer.

Trisha is a 2nd year Masterâ&#x20AC;&#x2122;s in Urban Planning and Policy student concentrating in Urban Design and Spatial Planning. She has an interest in urban design, architecture, and real estate. She hopes to one day work in an urban planning consulting firm, focusing on urban design.

Daniel is a third year part-time MBA student pursuing a dual concentration in Finance and Accounting. He has 8 years of experience in property management and currently works in the commercial banking division of Byline Bank.