Rose Companies acquires Barbara Jean Wright Court Apartments
One of the largest affordable housing developments on the Near West Side has a new owner and affordability guarantee. The Jonathan Rose Companies (“Rose”) announced on September 20, 2022 that it had completed the purchase of the 272-unit Barbara Jean Wright Court Apartments (“BJ Wright”) from the Chicago Community Development Corporation (“CCDC”) for $17.5 million and has committed an additional $46 million for the rehabilitation of its apartments and common areas.
With BJ Wright located along 14th Street, University Village to the east, booming Pilsen to the south, and new high-rises to the north, many residents feared they would be forced out of the neighborhood. This redevelopment guarantees residents affordable long-term rents. Rose’s partner and senior managing director, Nathan D. Taft, said, “With housing markets in the West Loop and Pilsen booming, everyone – including HUD, the city’s housing department, the State, aldermen, CHA, tenants and tenant advocates – were united in our efforts to preserve this essential element of affordable housing.
“Although the closing process was lengthy, the partnership between the U.S. Department of Housing and Urban Development (HUD), the City of Chicago, aldermen, community groups, and the Chicago Housing Authority (CHA) was exemplary” , added Brandon J. Kearse, managing director of Rose, who, with Karyntha Walsh, senior project manager, negotiated the complex transaction. “Now that long-term affordability is guaranteed, it’s time to ensure apartments and common areas can serve another 50 years,” said Mrs. Walsh.
Under the new agreement, all but 21 apartments will be affordable to those earning 60% or less of the area’s median income, with 40% of units receiving project-based federal rental assistance through HUD and an additional 30% receiving project-based rental assistance through the Chicago Housing Authority. The other 21 will be unrestricted and unsubsidized units, which will also allow existing market-rate tenants to remain in place.
Last renovated over 20 years ago, Rose is undertaking a rehabilitation process guided by residents, local stakeholders, 25th Ward Alderman Byron Sigcho-Lopez, 28th Ward Alderman Jason C. Ervin, City of Chicago Department of Housing, HUD, the Chicago Housing Authority, PGIM Real Estate Finance, Enterprise Housing Credit Investments, Huntington National Bank and US Bank.
“Through the collaborative efforts and support of the community, CHA, HUD and the City of Chicago, Jonathan Rose Companies will provide residents with the renovation of their homes and the added safety and comfort they deserve” , Alderman Sigcho-Lopez said.
The comprehensive restoration will include a complete renovation of all apartments, heating and cooling systems of all buildings, living areas of each of the 272 apartments, new landscaping and renewal of the playgrounds and the basketball court of the property. And as the centerpiece of the renovation, Rose will create a new 5,000 square foot pavilion that will contain “community of opportunity” common areas, including a fitness center, computer learning center and large multi-purpose room. The renovation will also provide free WiFi in the unit for residents to increase digital access to the community.
“We are grateful that despite the ins and outs of the deal, the delays caused by COVID, and the logistical challenges of rising construction costs and interest rates, all parties remained focused on the key issues – preserving affordability and improving residents’ living conditions – and everyone came together to see the project through to closure,” Kerse said.
“Also important,” said Walsh, “While working on the physical renovation of the property, we will work with residents to create a ‘community of opportunity’ with links to health, education, cultural and social services so that residents can continue to be empowered partners to advance their community.” Walsh added, “that the cooperation between HUD, CHA and the city was extraordinary and greatly appreciated.”
Barbara Jean Wright Court Apartments required the partnership of many. Enterprise Housing Credit Investments contributed $25.3 million to the federal tax credit, while PGIM Real Estate Finance arranged a $46.9 million FHA 221d4 mortgage. The Huntington National Bank provides a construction loan of $20.3 million. In addition, the City of Chicago contributed tax increment funding of $4.0 million and community reinvestment plan funds of $3.8 million. Funding also included Illinois donation tax credits facilitated by the Community Opportunity Fund, a nonprofit partner in the redevelopment and purchased by US Bank to generate approximately $900,000 in additional funding.
Residents will be temporarily relocated on an ongoing basis throughout the 2-year renovation period. Skender Construction will serve as the general contractor, Grund & Riesterer Architects, Inc. will serve as the architect, Urban Relocation Services, Inc. will manage the temporary relocation, and Rose Community Management will serve as the property manager.