Construction season

Poplar Place redevelopment begins, while several downtown projects are in the works

HOTO BY JOSH CATALANO.
Springfield Ward 3 Ald. Roy Williams Jr., pictured at an entrance to Poplar Place at 25th Street and Poplar Avenue on the city's east side, is looking forward to massive improvements in the dilapidated apartment community after Chicago-based Related Midwest's $44.8 million redevelopment project. The project, which includes $2.2 million in tax-increment financing funds from the city, is expected to be completed by this time next year.

Gloriastene and James Chappell had a hole filled in an exterior wall that was made by an errant bullet before it lodged itself in a living room couch while the couple were sleeping elsewhere in their east side home.

Now retired from jobs with the state and factories, the Chappells have lived across the street from an entrance to the Poplar Place housing development for 35 years.

They heard gunfire day and night and witnessed the aftermath of shootings for decades through their home's windows. They said they appreciated efforts by Springfield police all those years to intervene in criminal activity – some of which spilled out onto their driveway and into their backyard.

The Chappells said they haven't moved away because their income is limited, and they like their two-level home and their neighbors. And they are now optimistic about the neighborhood's future as a $44.8 million redevelopment of Poplar Place gets underway.

"I think it's an excellent idea," Gloriastene Chappell, 78, told Illinois Times. "I think it's going to be a success."

Her 77-year-old husband is more skeptical. James Chappell said he will reserve judgment until the project is completed.

"They've been promising this for four or five years," he said.

Ward 3 Ald. Roy Williams Jr. said he also has become impatient because of many delays in the project, which the Springfield City Council agreed to support with $1 million in property taxes from an east side tax-increment financing district and an additional $1.2 million in TIF funding specifically for road improvements.

"When this is done, I'm going to be very satisfied," Williams said.

Various major projects in Springfield either have begun, appear to be stymied or are at a crossroads as the Springfield area and the rest of the country slog through an uncertain economy amid the ongoing COVID-19 pandemic, inflation and rising interest rates.

Poplar Place renovations underway

Asbestos abatement on siding for the 142 units in the privately owned development recently began after owner Related Midwest of Chicago closed on financing for the long-awaited renovations at the formerly crime-ridden and deteriorated site, first constructed in 1950.

Related had hoped to begin work in January, but rising interest rates and increased building costs boosted the previously estimated $38 million cost and contributed to the delay, according to Tregg Duerson, Related's senior development associate for affordable housing.

The renovations are scheduled to be done in one year and be conducted in four major phases to tear down 67 buildings and renovate 75 buildings, accommodating 100 units consisting of 50 single-family homes and 25 duplexes. The apartment community previously housed 244 units on the 23-acre site.

Duerson said Related, which has owned the complex since 1999, will create a main entrance on Old Rochester Road, relocate the management office to the center of the site, create a "green lawn" area with 2.5 acres of park land and build a playground, community center and new roads.

The development, designed by Springfield-based Evan Lloyd Architects and constructed by Midwest's LR Contracting Co., will be renamed, though a new name hasn't been finalized. The new name could be announced this summer, before the first phase is completed in September, Duerson said.

All the units will be considered "affordable," with units at or below 60% of the area's median household income, he said. Twenty-five percent of the total will be set aside for the Springfield Housing Authority's voucher program for low-income families. The SHA will manage the property after renovations are complete.

Springfield Housing Authority Director Jackie Newman said, "When I was growing up in Springfield, Poplar Place was a pillar of the community that many families called home. It is a wonderful moment for the city that this valuable source of affordable housing will be given new life."

Among the 75 affordable units not part of the voucher program, two-bedroom units will be rented for $750 per month, and three- and four-bedroom units will be rented for $900 per month. Utility costs for the all-electric units won't be included in the rents.

Total construction costs are expected to be about $26 million, Duerson said. Other costs include $4 million set aside for soft costs such as architectural fees, environmental studies, surveys, building permits and tenant relocation. The $44.8 million project total also includes about $4 million for financing costs and legal expenses, as well as funds to leverage state tax credits and encourage private investment in the redevelopment.

The amounts mean the average construction cost per unit is $260,000.

A key part of Related's financing will come through $8.25 million in grant funding from the Illinois Housing Development Authority, Duerson said. That money comes from funds that the General Assembly appropriated to IHDA from the federal American Rescue Plan of 2021, IHDA spokesman Andrew Field said.

Former Mayor Jim Langfelder, who left office May 5 to make way for new Mayor Misty Buscher, said: "The city, together with our partners, worked diligently for years to ensure the right pieces were in place in order for this redevelopment to happen. ... There are different types of projects that can change the trajectory of a community, and the renovation of Poplar Place will be one of those projects for Springfield."

Duerson said Related has worked out a project labor agreement to ensure participation by area union members in the project. And while Related wouldn't release the agreement, Duerson said it requires that at least 30% of union trade workers be minorities – an unusually high percentage.

Aaron Gurnsey, president of the Central Illinois Building and Construction Trades Council, said in a statement: "The reason this PLA is so significant is that it has a 30% minority hiring requirement, which is unprecedented, in my experience. Related and the building trades wanted to do what we could for residents of east Springfield, and that means being intentional about hiring from the community and helping people start careers in the trades."

The PLA also allows both union and nonunion contractors to bid on parts of the project known as "carve-outs," Duerson said. Those include the community center, garages associated with single-family homes and the playground.

Organizations such as Springfield resident Calvin Pitts' B.O.N.E. LLC and Southtown Construction Training Center could take advantage of the carve-outs, Duerson said.

Williams said he hopes the project gives more opportunities for minorities in a low- and moderate-income neighborhood that is majority Black. "I just wanted to level the playing field in this area," he said.

Wyndham City Centre still up in the air

The City Council is expected to debate and potentially vote in coming weeks on an almost $20 million incentive package designed to finally move forward a proposed $57.7 million renovation of the Wyndham City Centre hotel.

Val Yazell, the city's interim economic development director, said Buscher and other city officials are vetting the incentive agreement worked out by the administration of former Mayor Jim Langfelder.

The incentive package would include proceeds from a special tax-increment financing district to be created with a 23-year life out of the existing downtown TIF district and only encompassing the Wyndham, 700 E. Adams St.

Also included would be the city's pledge to give back some of the hotel-motel taxes and city sales taxes collected at the property over the 23 years. Further details of the potential incentives haven't been released.

The 369-room, 50-year-old hotel, which stands 30 stories tall, would be converted into a 250-room Delta by Marriott hotel by the owner, Texas-based Sky Capital Group. Two hundred rooms would be renovated for market-rate apartments, and the top floor would be developed as a "sky deck" for tourists.

Three previous renovation scenarios for the hotel have had the required zoning relief voted down by the council because of concerns that not enough rooms were being set aside as hotel space to support downtown conventions. Those setbacks prompted New York real-estate developer David Mitchell of Good Homes, who had proposed buying the Wyndham from Rajabi and redeveloping it, to pull out of the deal.

The latest proposal, in which Rajabi's group would retain ownership, doesn't require zoning variance approval because current zoning allows 200 apartments at the site.

Al Rajabi, head of Sky Capital, told council members on April 9 that he was upset the council wasn't ready to vote.

Council members apologized to Rajabi for the delays and said they appreciated his dedication and interest in downtown Springfield. But they said the new administration needs to evaluate the economic incentives, and alderpersons need to weigh whether the incentives are fair to other hotels in the area.

"We have an obligation to our taxpayers," Ward 8 Ald. Erin Conley told Rajabi.

He said he objected to the Langfelder administration's forgiveness of $243,000 in utility charges for the hotel becoming an issue in the mayoral campaign.

The debate resulted in an unfairly negative portrayal of the hotel, Rajabi said. He noted that he owes City Water, Light and Power nothing because he has repaid $1.5 million in other COVID-19 pandemic-related debts.

Rajabi hasn't pulled out of the renovation project, though he told the council last month, "It's very frustrating. ... It doesn't sound like the city wants me here."

Horace Mann moves forward with demolitions

Horace Mann Educators Corp. swiftly moved this month to tear down a 100-year-old building it has purchased at 618 E. Washington St. as part of what it described as a beautification project for the 600 Block of East Washington, despite complaints by downtown preservation advocates and some City Council members.

Horace Mann razed the adjacent building it bought last fall at 622 E. Washington after the council opted March 7 not to reconsider its previous decision that will grant up to $600,000 in TIF funds for the project.

Space occupied by the buildings will be used to establish 28 surface parking spaces and green space next to the historic three-story Witmer-Schuck building that Horace Mann owns and has spent almost $2 million renovating.

The newly renovated building includes four furnished apartments on the second and third floors to provide temporary housing for visiting corporate executives and newly hired employees. The parking spaces will be used by residents and those who work in the Witmer-Schuck building, including employees of a Horace Mann-affiliated insurance agency on the first floor.

Members of the Downtown Springfield Heritage Foundation said the downtown already has too many surface parking lots, and they said both of the deteriorated buildings could have been stabilized for $761,000 and marketed to developers.

However, Don Carley, Horace Mann executive vice president and general counsel, said in a May 2 news release that company officials met "multiple times over the past three months" with the foundation to discuss alternatives for 618 E. Washington.

"While we appreciate the time the foundation put in creating proposals for 618, as of today, no willing investor has come forward," he said.

Carley added: "Unfortunately, given the condition of the building brought on by more than a decade of vacancy, the cost to remediate the asbestos in the building and the dramatic increase in labor and materials, restoration of the building is not economically viable. In light of their interest, Horace Mann offered to purchase and donate the building to the (foundation), but they cannot take on the building or its liability absent an investor to manage the project, assume the liability risk and shoulder the financial cost of the project."

Foundation Vice President Dave Leonatti, an architect, objected to Carley's description of the situation.

Leonatti said in a statement: "We are saddened, though not surprised, Horace Mann continued their demolition of historic Downtown Springfield buildings. Outside of meeting, they have shown little interest in being a good downtown neighbor and are continuing to clear buildings to provide parking for their CEO and other executives when they visit town.

"Their statement regarding their demolition project is disingenuous at best. Mr. Carley states, 'As of today, no willing investor has come forward.' The Heritage Foundation did not own the property, so we were not in a position to market it. As they began demolition the day after they released their statement ... we find it unlikely Mr. Carley was seeking an investor."

Leonatti concluded: "The Heritage Foundation was willing to take the building on. We provided numerous proposals and plans, including images, financial and funding options. These were all rejected. We additionally offered to put a 12-18 month window on the agreement. If we couldn't get a developer to sign on the line at the end of that time, we'd turn the building over to the city for demolition."

Public Market peters out

The COVID-19 pandemic was the main factor that prevented the proposed $4 million renovation of a long-vacant former bank building at 322 E. Adams St. into a site called Public Market, developer David Lee said.

"There was strong initial interest pre-pandemic," said Lee, 33, a Springfield native who was co-managing partner of the proposed project with Decatur-based real-estate developer Tony Caccomo.

The two-story building at the southwest corner of Adams and Fourth streets would have combined traditional and securities-based crowdfunding to create a food hall for various vendors and the first rooftop bar in Springfield.

The City Council approved up to $1 million in TIF funding for the project, which never got off the ground and has been abandoned. None of the TIF funding was received or spent.

Lee said he and Caccomo, who had a contract for deed with the property's owner, saw interest by private lending institutions and potential contributors and investors dry up after the pandemic hit in spring 2020.

"Nobody had an appetite to do the project," Lee said.

He said he and a different business partner, Springfield firefighter Brian Frieze, have had success investing "several hundred thousand dollars" to renovate buildings at 306 and 308 E. Adams – just west of the Public Market site – for rental to Wildly Rooted Boutique and Ad Astra Wine Bar and Market, respectively. Both of the first-floor businesses opened in fall 2022.

Lee and Frieze hope to develop the second and third floors of both buildings into a total of eight apartments of 750 to 800 square feet apiece.

"I'm still bullish on downtown," said Lee, a full-time Stryker medical equipment salesman and part-time developer who lives in Springfield with his family. He is chairperson of the Momentum on Main Street initiative by Downtown Springfield Inc.

"Most downtown buildings need significant dollars invested to renovate them," he said. "I'm personally very committed to this work in Springfield."

Rick Lawrence carries on, for now

Corey Dickerson said he hopes he can open Aunt Lou's Soul Food restaurant on the first floor of the eight-story downtown Ferguson Building by July 4.

He and business partner Smarjesse Taylor had hoped to occupy the former site of Vele and Cafe Brio in the century-old building in the first quarter of 2023. But unexpected additional requirements for upgrades by city inspectors and several burglaries at the vacant site have delayed progress, Dickerson said.

Dickerson said the break-ins included one several weeks ago when thieves made off with more than $10,000 worth of TVs to be displayed at the restaurant, as well as wiring and power tools that were being used as part of renovation work.

The thieves gained entry to the building through an alley door, he said.

"I'm definitely pressing forward," Dickerson said. "Everything's headed in a good direction now."

Bright New Day Investments LLC, operated by Siciliano Inc. President Rick Lawrence, has completed more than $50,000 in safety-related improvements at the Ferguson building. The work has included replacement of all the windows, he said.

Lawrence, who has some enemies on the City Council, was the original developer of a proposed $12.6 million residential and retail project at the multi-building site. He still holds title to the Ferguson, Booth and Bateman-Kennedy buildings but expects New York-based Chesterfield Faring Ltd., the investment banking firm that purchased Lawrence's mortgage for the three buildings from First Bankers Trust, to eventually name another developer for the overall project.

Lawrence said he wants the restaurant to move in and create forward momentum for the overall project so he can repay $1.2 million in unpaid benefits to union workers and vendors for work that already has been completed at the site.

Hopes for Poplar Place

Back at Poplar Place, the Chappells said they no longer fear sitting outside their 25th Street home after years of worrying they would be shot or assaulted. That's because only a handful of tenants remain at the site, they said.

Going forward, they believe the additional electronic monitoring and license-plate readers expected to be installed when the new development opens will bring even more safety to the Ernie Bankhead Neighborhood and adjacent residential areas.

"I know it's going to be secure," Gloriastene Chappell said. "It's going to take time, but it's going to be nice over here, and I hope to live long enough to see it."

Williams, the Ward 3 alderperson, said reduced residential density in the apartment community that will replace Poplar Place, along with refurbished housing units and related amenities, will promote a more stable, peaceful neighborhood.

"It's going to be better," he said.

Duerson, the Related Midwest senior development associate, said: "I know people are excited for us to get going, and we're just as eager and excited to get going, as well. When this project is done, I'm confident this is going to be some of the best living stock and rentable stock in Springfield, and certainly on the east side of Springfield.

"And I think when you have a property that's going to be as modernized as this one, it could hopefully lead to other owners investing into their own property to modernize their aged homes or renovate dilapidated structures. And it could also attract and retain businesses that are within the area. ... So hopefully, it could lead to a healthier, holistic community that is a catalyst for investment, both residentially and commercially."

Dean Olsen is a senior staff writer at Illinois Times. He can be reached at [email protected], 217-679-7810 or twitter.com/DeanOlsenIT.

About The Author

Dean Olsen

Dean Olsen is a senior staff writer for Illinois Times. He can be reached at:
[email protected], 217-679-7810 or @DeanOlsenIT.

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