Midwest Real Estate News - Published October 2006

Courting Development

A North Side university takes it upon itself to woo commercial development

While reports of Chicago’s enhancements as a city are abundant – from new trophy office towers downtown to a myriad of groomed public spaces – many parts of the city have not enjoyed the same rapid development and civic attention as the city’s CBD.

The Far North Side neighborhood of Rogers Park - home to Loyola University – is one of the city’s most diverse areas. Overall, its demographic profile more closely resembles the entire city than any other neighborhood. A visit to Loyola’s lakeshore campus lends itself to scenes typical of a higher education institution: students bustling to and from classes, joggers exercising on an outdoor track and staffers enjoying a picnic lunch. However, snapshots of students dining at local eateries and browsing in nearby shops are nearly absent from the surrounding area, which lacks the restaurants and retail students typically frequent. Although there are a handful of options, the variety and volume is clearly insufficient for the 3,000 students calling the campus home.

Over the past 20 years, Rogers Park has undergone significant demographic and economic changes, resulting in inadequate private investment, deteriorated infrastructure and reduced property values. The neighborhood is underdeveloped and underserved by retailers. Adding to the challenge of redevelopment is the lack of large parcels of developable land and the mobility of residents, as two-thirds for current residents have moved in the last five years. The housing stock reflects the trend, with 82 percent in the form of rentals.

In order to spur development, encourage investment and create a more suitable campus for its growing student body, Loyola University hired Chicago firm Newcastle Limited to establish a real estate strategy that would spin a vision into tangible results. To begin, the city created a 70-acre area as a TIF district and hired a campus-planning consultant in the 2004, which identified a handful of goals to modernize the area.

“We are in the process of really creating the campus that will best serve our growing student body,” says Jennifer Clark, director of government and community relations. Loyola’s enrollment has more than doubled in the past five years.

Newcastle will reshape the neighborhood by master planning five acres of underutilized land adjacent to the campus, which is owned by the university and near the Loyola’s elevated train stop. The mixed-use development, named Loyola Station, will contain 500 apartments and over 100,000 square feet of retail. A developer has not yet been named.

“There’s no other place in the city where you’re going to find five acres of land adjacent to 10,000 students, a CTA stop and two blocks from Lake Michigan. It’s a great piece of real estate,” says Project Manager Peter Tortorello of Newcastle.

Transportation-oriented development is garnering attention in planning circles as more emphasis is placed on sensible growth.

“There’s also a lot of talk about development around universities, and this really combines both of them in one location,” says Michael Haney, president of Newcastle Limited, of the project’s location near both a higher academic institution and a transit stop. The target market for the development will be both Loyola students and staff along with Chicago residents.

A portion of the TIF money will also be used for revitalizing parts of Loyola’s campus, such as a $46 million grant to help fund an $85 million renovation of the Mundelein Center, a national historical landmark since 1980. The authentic art deco building will be completely revamped by 2009. The school will also construct the information Commons, a new-age library-type center conducive to students’ current studying habits, which includes more opportunities for group setting and off-site book storage. The building’s architects are attempting to achieve silver leadership in Energy and Environmental Design (LEED) status.

At the heart of the project is the stop, which Newcastle is hoping the CTA will take the initiative to renovate. The CTA has no formal plans to renovate the station, according to spokeswoman Wanda Taylor, and it was last rebuilt in 1982.

There is no denying Loyola has an image to maintain, and beautifying the campus and making the area more livable may attract more students. Investors are also hoping Loyola Station will serve as a catalyst for more development. Creating economic activity in a depressed area is always a gamble, and the real estate community is sure to pay close attention to whether it pays off.

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