Posts Tagged ‘real estate development’

Preservation Wins in Edgewater

August 30, 2010

POST DATE: August 30, 2010 – Exactly five years and 296 posts since this blog began.

Last week a lawsuit against the Edgewater Historical Society (EHS) was dropped, marking a significant victory for preservationists in the north side Chicago community, and indeed, for all Chicago preservationists, since another lawsuit against the city landmarks ordinance is still out there.

The suit argued against community activists who sought to landmark the neighborhood following plans announced to tear down an historic house. They claimed over a million dollars in damages, even though the district never was created.

The Edgewater lawsuit was particularly obnoxious, because the plaintiffs sued not only the Historical Society but several individuals on the society board. It was an attempt to chill the ardor of community activists by suing them PERSONALLY for what they were trying to do for their COMMUNITY. There are actually laws against these SLAPP lawsuits – Strategic Lawsuit Against Public Participation – because they are specifically intended to intimidate and inhibit public speech and action. It seems some think community organizations should have the same legal protection that corporations do.

Historical fact: the corporation was invented to limit the personal liability of those who undertook business ventures for profit. It seems only fair that not-for-profits get similar protection, hence the wave of Anti-SLAPP legislation being passed worldwide.

The Edgewater ruling was cheered by Preservation Chicago “as a great relief to preservationists, who are closely watching a similar lawsuit filed by Albert Hanna against the creation of the Arlington-Deming District and the East Village District.”

I have previously commented on that case. The big irony in all this is that people oppose landmarking because they don’t want to limit the value of their real estate, but people have ALWAYS supported landmarking because they want to preserve the value of their real estate. The opposition always heats up with the real estate market, while the conservation option arises either during periods of down markets like the 1970s or in areas that have experienced long-term disinvestment.

We are reading a lot nowadays about the end of the hot real estate market, the death of homeownership and the decline of the McMansion (Bob Bruegmann suggested as much two years ago – see my post on real estate economics) now that the 30-year housing bubble has burst.

The right and left wings are arguing about who caused the housing bubble (if you are on the right, blame Fannies for giving mortgages to lowlifes who couldn’t make payments; if on the left, blame the banks who purchased, repurchased, rebundled and kept buying those toxic assets.) but the simple fact is that when the value of a house doubles in five years, as they started to do in the 1990s, and wages don’t, there will be a correction. This bubble started a quarter of a century ago, and it got really big.

Over historical time, real estate values also go down. Here is a house that cost $8,000 to build in the 1860s and sold in the 1920s for less than half of that.

In my 2008 blog post mentioned above I also related the story about buying two Frank Lloyd Wright houses for a dollar, which was tens of thousands of dollars TOO MUCH, because the properties had a negative value thanks to their location. According to the newspaper this morning, two Frank Lloyd Wright houses in California may be lost, thanks to their inflated values in that most inflated of markets. The Ennis house was listed at $15 million and now can be had for half of that, while La Miniatura dropped from $7.7 to $5 million and may be bought by art collectors, disassembled, and shipped overseas.

The point is, the market was psychotically overheated and overvalued. It reminds me of the Marshall Bennett quote about real estate development after World War II:

“It didn’t take vision because the market was fantastic. You had to be an idiot not to make lots of money. Really. I’m not kidding.”

Oh, I can’t resist. Here is what Bennett – a big real estate developer – said about the crash of the commercial real estate market at the end of the 1980s:

“A developer is like an alcoholic before he joins AA. If you give him money, he builds. He doesn’t care if there is any demand for the space: he knows that someone is giving him money and he can go out and build. Again, there was no vision – there are very few of us who are smart enough to listen to ourselves.”

“America does things completely differently from anyone else. We overbuild and we overcontract.”

Footnote for Bennett quotes: “Seized the Day: Chicago chronicles from seven who helped shape the city”, Rob Mier and Laurel A. Lipkin, Chicago Enterprise, October 1992, p. 18.

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Quick Hits

February 27, 2009

Word is out that the Rosenwald is threatened again – the stunning Michigan Terrace Garden Apartments, an early affordable (not subsidized) housing scheme by Chicago’s greatest philanthropist of the early 20th century, Julius Rosenwald. Economic downturns help preservation by steering moneymad wasters away from random demolitions and harebrained development schemes, but they also stymie big projects like the Rosenwald that were getting ready to happen.
rosenwald09s
The other big preservation news in Chicago is the Appellate Court decision, which I presume the city has already appealed. An attorney on the North Side whose hobby is suing the city about zoning and a person of similar avocation in East Village managed to find some judges unaware of U.S. Supreme Court precedent to declare the Chicago Landmarks Ordinance “vague” in its criteria and remanded to the lower court, which would presumably throw out the ordinance. The effect of this? Nothing. Why?
1. The City has the power to landmark buildings with or without a landmarks ordinance. Every Chicago Landmark is designated as an individual legislative act by the City Council. The judges seem to be confused about who does the designation. You won’t get the Illinois Supreme Court to challenge a home rule legislative body. Believe me, I’ve tried.
2. The ordinance is like the other 2600 in the United States. They are equally vague. Even Houston designates landmarks, and it has no zoning. Maybe the hapless attorney should move there.
3. Chicago has a belt and suspenders. We have the 90-day demolition delay based on our comprehensive Chicago Historic Resources Survey, which is a level of precision a judge who had been rated as qualified would notice. Most landmarks fall under this law.
4. Even though the plaintiffs argued it, the decision did not mention downzoning efforts in the two neighborhoods. Maybe that’s why Jack Guthman stopped talking about it. He thought, reasonably, that his 25-year old argument was being validated, only to find that the judge completely whiffed it.

Meanwhile, in Oak Park they are demolishing the Colt Building and others on Westgate in preparation for a new development – wait, hold the phone – the developer backed out.
That means the demolition is?
Proceeding.
Yes.
I can see it now: Skate on Lake! Gallery Colt!
I was in favor of getting rid of the Colt if it saved the rest of Westgate, which was the plan in 2005.
colt-rear
But I also watched the demolition of Block 37 in 1989 for a new development.
mccarthy-bldg
And I watched the new development being completed.

This Tuesday.

It’s not done yet.

The timing between the demolition of 8 historic buildings on Block 37 and the completion of the new development they were sacrificed for?
How about a short list of the things that happened (besides my getting married, having children, hair turning gray)

Berlin Wall demolished
First Gulf War
Chicago Heat Wave
Bosnia
Six Chicago Bulls Championships
Y2K
9/11
Current Gulf Wars
East Timor
Sox World Series
Pudong
pudong
yes, the hometown of Chinese communism built all this while Block 37 lay vacant.
The Macarena
Harry Potter
Lord of the Rings trilogy and 3 James Bonds
DVDs
iPods iPhones Wiis Facebook MySpace and most of the Internet
Bush, Clinton, Clinton, Bush, Bush

I HAVE COLLEGE STUDENTS LIVING ACROSS THE STREET FROM BLOCK 37 WHO WERE NOT YET BORN WHEN BLOCK 37 WAS DEMOLISHED.

Now, to be fair, this building took longer to build than Block 37:
durham-cathe-cuthbt87
But come on guys, that was 800 years ago.