Turnberry Looks Ahead to $27M Condo Project

Most recently, the partnership built a mixed-use building two blocks away at 1001 W. Madison St., which was once part of the city's infamous "Skid Row" of taverns and flop houses. Now, the first-floor retail space at the corner of Madison and Morgan streets includes a Starbucks.

Turnberry Properties' 901 W. Washington Land Development LLC bought the 25,117-sf site between Sangamon and Peoria streets, which includes a car wash and parking lot, for $375,000 in August 2001, according to property records. The partnership subsequently obtained $4.5 million in financing from First Eagle National Bank and Midwest Bank & Trust, records show. However, the project now is "100% financed," according to David Wallach, one of Turnberry Properties' four partners.

However, one financial detail already has raised eyebrows among the plan commission, particularly 42nd Ward Alderman Burton Natarus.

The developers are setting asside 11 units--10% of the total--for buyers who would qualify under the city's Chicago Partnership for Affordable Neighborhoods initiative. Those one-bedroom units would sell at "affordable" price tags of $160,000 to $180,000, rather than the market rates of up to $245,000 to $260,000.

The usual set-aside under the voluntary program is 20%, especially if city financial help is sought. In this case, the developers want to build a 10-story building that would be about 5% larger than the maximum allowed by zoning, even with bonuses for the 11 affordable units.

However, the city's department of housing would receive $110,000 from the Turnberry Properties for its new housing opportunity fund, the first developer donation under the program. The money would eventually be used for rent subsidies or mortgage assistance, says Richard Monocchio, the department's first deputy commissioner.

Natarus wants to see a report from the department by May on how the funds will be used, as well as regulations and guidelines on how the donations are set. "I think they'll be an awful lot of money put in this fund," he says. "Where are the regulations on a fund like this? If you don't have standards, if you don't have formulas, and you can't justify how you're arriving at these figures, you're going to have trouble."

Alderman Walter Burnett admits he has set the bar of affordable units at 10% of the total project. "I had to be consistent with this guy because I've asked everybody else to give 10%," says Burnett, adding Wallach's company is eyeing at least one more project in his 27th ward. "The next time, he'll have to do more affordable housing."