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CHICAGO-A joint venture has begun construction on the first phase of a large, roughly $225 million multifamily development that will replace a few Cabrini Green housing projects. The development, dubbed Parkside of Old Town, will have more than 760 townhomes, condos and apartments on an 18-acre parcel bordered by Seward Park and Larrabee, Division and Oak streets on Chicago's Near North Side.

The redevelopment is part of the $1.5-billion CHA "Plan for Transformation," which has torn down high-rise public housing towers and replaced them with similar mixed-income, mixed-use neighborhoods. The high-rises that made up Cabrini Green once housed 35,000 people, but only about 1,500 people remain.

With a consent decree to form a new development partnership, the former residents have joined with two companies, Holsten Real Estate Development Corp. and Kimball Hill Urban Centers to build Parkside. Upon completion, the project will have about 20% low-income housing, 30% rental housing for current and returning Cabrini residents and 50% market rate housing and apartments.

Peter Holsten, president of the self-named firm, tells GlobeSt.com that Parkside will replace three of Cabrini's high-rise buildings. He says the new project shouldn't be affected by the stigma of the former buildings, pointing to a successful similar project called North Town Village, where his company manages the rental component, that had roughly the same combination of market-rate and affordable homes. That project hasn't had much vacancy, Holsten says. "There were people who weren't sure about it, but we've had an overwhelming response. If it's a strong area, people will want to live there," Holsten says.

He says construction has started on 280 homes, which will be townhomes priced from $499,000 and condominiums starting in the low-$200s. The company has about 100 contracts for the for-sale units, which was the catalyst for a JP Morgan Chase loan for the first phase, Holsten says. Once the firm sells another 14 units, he said construction can begin on the second condominium high-rise building.

He says financing is being arranged now, and should close in April, for the rental mid-rise building. "Each one of the phases should take about two years," Holsten tells GlobeSt.com. "People should be moving into the first phase in the middle of next year." Though sales of the homes generate income for the project, it is also subsidized by federal, state and local incentives.

Instant Insights /

JV Starts On $225M Cabrini Green Replacement

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