ParkWorks May Not Work for Pilsen

An empty parcel of land in eastern Pilsen, sitting between Metra and freight tracks and 18th Street, draws little attention to itself—but for some residents, the site has become a battleground for the future of the neighborhood. The luxury developer that owns the land, Property Markets Group (PMG), recently announced big plans for a 465-unit apartment complex on the site called “ParkWorks.”

The project, which would be built on Pilsen’s largest remaining patch of vacant land, would have rooftop green spaces, solar panels, art installations, and retail outlets—and a futuristic sheen that contrasts sharply with the rest of 18th Street, which hosts some of Chicago’s oldest housing stock. PMG has been attempting to build on the site for nearly five years, but 25th Ward Alderman Danny Solis has refused to accept the developer’s proposals on the grounds that they wouldn’t be good for the community. In the current proposal, PMG is offering one hundred units of affordable housing and sixty jobs for Pilsen residents to show its commitment to be “guided by social responsibility.”

But some residents are not buying it.

Since the developer bought the property in January, it has constantly found itself at odds with community groups opposed to the construction of luxury development on 18th St. At a June 7 forum, the first of three “open houses” hosted by PMG, Byron Sigcho, executive director of the neighborhood group Pilsen Alliance, voiced concerns and reasons for opposing the project. Speaking face-to-face with the principal developer and head of the project, Noah Gottlieb, Sigcho repeated the stance of the Pilsen Alliance: that the majority of the community stands to lose from the development, and that the promise of “community benefits” would not compensate for the gentrification that would follow the luxury apartments. In his words, “the social fabric of the community is at stake.”

The Promise of Community Benefits

The land in question is nearly eight acres between 16th and 18th Streets, along Newberry and Peoria Streets. The project would contain 465 one, two, and three-bedroom units, ranging from $1,000 to $3,000 monthly rentals. It would be completed over five years and be constructed in three phases, according to project head Gottlieb. There would also be 10,000 square feet of retail space.

PMG is a developer known for its luxury apartments in New York, Miami, and Chicago. It was founded in 1991 by Kevin Maloney, who got into real estate in college when he used his student housing loans to buy two duplexes and rent them out to fellow students, though he didn’t live in them himself. On its website, PMG states it “distinguish[es] itself by focusing on premier luxury residential properties” and that it is “consistently enhancing the luxury experience.” One of its current projects is 111 West 57th Street in New York, a sleek, silver spire that is “poised to be one of the tallest residential towers in Manhattan.”

Now it wants to move into Pilsen.

Solis and the Pilsen Land Use Committee (PLUC), a neighborhood group created by Solis to vet development proposals in the neighborhood, have prevented the developer from building on this property since PMG started the process of buying the vacant land in 2013 from the Midwest Jesuits, a Catholic order that also operates St. Ignatius High School and Loyola University. PLUC and Solis shot down PMG’s first 500-unit proposal in spring 2015 on the grounds that the project would be too densely populated and would not meet Pilsen’s twenty-one percent affordable housing mandate.

The mandate, formed in 2005, states that any new development of eight units or more that requires a zoning change must reserve a minimum twenty-one percent of its units for affordable housing. The number is unique to Pilsen—every other neighborhood has a ten percent requirement. The idea is to encourage more affordable housing and stem the exodus of residents who can’t afford to live due to rising rents and property values.

The mandate is not legally binding and developers can gain the favor of the PLUC and other groups by offering comparable benefits to the community instead of affordable housing. For instance, the PLUC and Solis approved a ninety-nine–unit building with only ten percent affordable housing in February 2016 after the developer promised to donate an acre of land to the nearby Benito Juarez Community Academy for an extended sports field.

But PMG’s second proposal, which involved building fewer units, didn’t meet the requirement, nor did it provide something else in exchange. Solis, who also chairs City Council’s zoning committee, rezoned the land to industrial-use in 2016 to keep PMG from building on it. In an email, a spokesperson for Solis wrote that until PMG meets those demands, “There is nothing for us to talk about; we have two different positions.”

PMG’s latest proposal could be its ticket to start building. The developer is hoping that a new package of community benefits will win over residents who oppose the project. “ParkWorks’ new plan exceeds the community’s request for affordable housing, green space, job creation, and support for local businesses,” according to a PMG video about the project. Gottlieb is promising that two-thirds of property employees will be Pilsen residents, along with one-third of retail employees, and “on-site hiring for local construction jobs,” according to the video. According to Gottlieb, the project will create sixty jobs for Pilsen residents, though ten of them will be for construction, and only some will be full-time.

Affordable Housing and Social Responsibility

The community’s largest concern seems to be with the promised affordable housing. The developer is claiming that it meets the twenty-one percent mandate of affordable housing, but there’s a large caveat: while some affordable units will be on site, others will consist of existing apartments in Pilsen that PMG will buy from residents, with promises to implement rent control for thirty years. In order to meet the mandate, PMG will have to extend its footprint further into the neighborhood by buying up more property.

Rosa Esquivel, a member of the Alliance’s community board, has lived in Pilsen for thirteen years and is worried that her parents, who have resided in Pilsen for more than four decades, may have to sell their house. She said that “everything sounds good and pretty,” but expressed alarm that Gottlieb is “saying the one hundred units aren’t going to be on-site. And he has plans on buying more property in Pilsen. I want to make sure he keeps his word.”

Asked why ParkWorks couldn’t be built with twenty-one percent of its on-site units as “affordable,” Gottlieb said he can’t afford it: “I can get to twenty-one percent, I just can’t do it all on-site.”

Some, however, see the promise of the affordable units as a bare minimum, and think that the introduction of luxury apartments into the neighborhood cannot possibly be compensated by providing only some scattered affordable housing. “Twenty-one percent is the minimum mandate,” said Alliance director Sigcho. “The Pilsen Land Use Committee has not done a good job of communicating the point of the mandate. It’s not legally binding, but it shows goodwill to the community—that’s the point of the mandate.”

“They have to do a lot more than twenty-one percent,” Sigcho continued. “We’ve said in the past that we have a big affordability problem in the neighborhood. Is it going to benefit the families being displaced? People are talking about fifty percent, one hundred percent. If PMG isn’t willing to do this, we can find another developer.” (Solis has also been talking about the site with the Resurrection Project, a Pilsen-based housing nonprofit, which was interested in developing it with more than twenty-one percent affordable housing.)

For PMG, promising affordable housing by buying up existing Pilsen property and imposing rent-control on it is a way to meet Solis and the PLUC halfway, but its language is vague and leaves wiggle room. For instance, it is still unclear what portion of ParkWorks units will be on-site versus off-site.

Gottlieb has said that the twenty-one percent on-site rule is unfair to him as a developer and the neighborhood in general. One of Gottlieb’s posters at his May community forum claimed that private developers have built zero affordable units in Pilsen since the twenty-one percent mandate went into effect. This claim ignores projects born from private/public partnerships, such as Casa Querétaro and Casa Maravilla, which provide hundreds of affordable units housing to seniors and families in Pilsen.

According to John Betancur, an urban planning professor at the University of Illinois at Chicago, we should be wary of the language used in this development battle, such as “community benefits” and “social responsibility” and even the promise of jobs and affordable housing. “Developers are savvy and that’s all rhetorical,” he said of PMG’s promises. He has studied Pilsen’s gentrification for years, and approaches this project with skepticism. “Like politicians, they promise everything they can think of because they know once they get things, they can do otherwise. I don’t trust the developer and the community shouldn’t. Bringing shops to Pilsen is another gentrifying tool. Pilsen doesn’t need shops. They don’t really need it.”

Gottlieb and PMG have framed their new proposal in terms of “social responsibility,” promising to bring more good than bad to Pilsen, but it’s unclear how that will play out in the long term. For one, PMG has a record of selling their buildings to third parties as soon as it’s profitable for them—PMG’s founder said as much in a 2013 interview with The New York Times.

Gottlieb contends that PMG is staying and investing in Pilsen. “To be clear, we’re not going to be doing condos,” he said. “This is an apartment building. That’s the goal. All of these things we’re talking about will become documentation that’ll be inherited throughout the lifetime of the project. So it’s not something that goes away.”

His words, however, run contrary to the modus operandi of his company. In January, PMG put its Logan Square building up for sale. Known as the “L,” it was built in 2016 after years of planning and community debate. The building that was initially proposed to the community was altered to be smaller and meet the neighborhood’s affordable housing concerns, not unlike ParkWorks in Pilsen, after residents protested that it would be a gentrifying force in the neighborhood. Gottlieb was the project’s senior manager.

PMG has also expressed interest in the University Village and Pilsen area before. In March 2015, PMG played a role in buying and demolishing the Gethsemane Church, which stood for over 140 years at 13th and Union, to make room for an upscale apartment building in University Village. They secured a building permit earlier this year.

So what should the community make of the developer’s promises? And how should the community work to make sure the developer keeps those promises? Gottlieb has volunteered to sign a Community Benefits Agreement, and claimed that he could easily be held to his word since “the project is going to happen over a number of years, over five years, … you can hold me to my promises incrementally.”

Gentrification and Pilsen’s Future

For some longtime residents, however, the promise of retail jobs and rent-controlled housing does little to offset the concerns of the gentrification they feel ParkWorks would accelerate. Underneath the arguments over the details of the proposed development and the fight for zoning rights is a deep mistrust residents feel toward a developer who promises to make only positive changes in their community.

“It’s all outsiders coming here to make the neighborhood better. But better for who?” said Robertl Queztalcoatl, a Pilsen resident since 1947, outside the forum. He stood outside the open house holding a sign that said, “I am the face of eviction.” For him, the issue about the development isn’t the amount of affordable housing offered by the developer, or the number of jobs that will be brought to the community. “I don’t like white people taking over this neighborhood,” he said. “I grew up here and it’s a Mexican neighborhood and now it’s white people pushing us out. It’s already happening.”

“They’ve got a hundred affordable units and sixty jobs for locals, but, honestly, I think that’s just breadcrumbs,” said Javier Ruiz, a Pilsen Alliance member who held a clipboard and pamphlets outside the ParkWorks open house. “That project has a potential to displace a lot of people.”

Eastern Pilsen has already seen encroachment from higher-priced buildings of University Village to the north. ParkWorks is just the latest, and by far the largest, example of gentrifying development in this part of the neighborhood. At 917 West 18th Street, across the street from ParkWorks, a new office-loft space attracted media attention in January when its developers gave it the ill-suited name “The Gentry,” which smacked a little too truthfully of the gentrification of which the building was a part. The developer, Villa Capital Properties, changed the name after receiving negative feedback.

The planned “Paseo Trail,” a 606-style four-mile trail on old freight tracks that runs alongside the ParkWorks site, is likely the greatest gentrifying force there today, with the potential to bump up property values in the surrounding area and attract more moneyed outsiders. Community groups resisted the 606 trail on the North Side, arguing that property values would increase and gentrify the areas around the trail, and those fears were well-founded. Property values of single-family homes within a half mile of the trail increased by fifty percent from 2013 to 2016, according to a study by the Institute for Housing Studies at DePaul University.

“People living here, it’s poor people,” said Bernadino Echeverria, a resident and Pilsen Alliance member. His main concern is that ParkWorks targets middle class prospective buyers from outside Pilsen, and that their entrance into the community would force out the Latinx community as rents inevitably rise. For him, keeping the developer out would help preserve the neighborhood. “We want to keep the community together,” he said.

But some residents unconnected to Pilsen’s tight-knit Mexican community welcome the plan and hope it will kick-start the neighborhood. “For me, it’s surprising that Pilsen’s already taken this long to turn over,” said Kimberly Galban, who lives across the street from the proposed site, and has lived in the neighborhood since 1999. “It’s close to the city, it’s close to a major expressway, it’s easily accessible…so it’s going to happen regardless. Prices are going up without this, so I just feel like now that there are more people coming to this neighborhood and there are more restaurants trying to make it on 18th Street. It’s like we need the bodies to actually make that happen.”

Galban is not the only resident who thinks Pilsen could benefit from more apartments and shops. Over two hundred residents from University Village and Pilsen have signed a petition in support of the ParkWorks development. “Empty lots provide no benefit to our neighborhoods,” the petition reads, “and development would bring much-needed density to local businesses as well as additional tax revenue for the city.”

Ultimately, the future of the development and the surrounding neighborhood rests with Solis, who has the power to go through with PMG’s proposal or refuse it again. Many members of the Alliance expressed the belief that Solis is too close to developers and puts his own agenda ahead of Pilsen’s. Some members of the Alliance pointed out that PMG donated $2,650 to Solis’s reelection campaign in 2014 and another $2,700 to his ward organization in 2015, and were worried this meant Solis could work out a backroom deal and allow the development to proceed.

At the June 7 forum, Sigcho was critical of what he saw as the developer trying to preemptively get the green light through Solis without the community’s input. “Being at the table after the fact is not the same as sitting down and saying, ‘This is the situation,’” Sigcho told Gottlieb, standing among a group of residents.

“Do you agree or disagree that the purpose of tonight is for everybody to sit at the table?” asked Gottlieb. “We hear your concerns.”

Betancur believes that Solis and PMG are in a stalemate, with both parties stuck in a difficult bind. “Basically the alderman does not have an easy way with residents. Every time there is a project, it’s difficult for him to approve a project,” Betancur said. “The community doesn’t want it there, and the developer is trying to get around, but none of the proposals have met the criteria and none will meet those criteria, but something might happen. There’s an impasse, and Solis might want more from [Gottlieb].”

The impasse is worrisome for residents who fear change in their neighborhood, and explains the energy being funneled into this dispute over eight acres of unused land in eastern Pilsen. But perhaps what this fight has proven is that this is not just about resisting change in a community but also about retaining the power and voice of residents.

“Communities change,” said Betancur. “It’s not a matter of keeping the community intact. It’s a matter of having a say—giving the time to the community. I don’t think gentrification is inevitable. It was kept off until Daley became mayor and Solis became alderman. If Solis holds off zoning changes, he can because the alderman has the ability to do that. If the alderman works with community to help the lower-income people, he can do that too.”

“There are many things that can be done,” Betancur continued. “It’s not a matter of keeping a community a particular race, it’s about giving people opportunity.”

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