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CHICAGO-The city will chip in $5.4 million in tax increment financing to complete the first phase of the redevelopment of the former Madden, Darrow and Ida B. Wells housing projects on the South Side. While 163 units will begin to be delivered to tenants this week, the remaining portion of the first phase will add another 162 rental units and 129 for-sale multifamily units at a total cost of nearly $80 million.

The redevelopment of the Chicago Housing Authority property north of Pershing Road and west of Metra’s Electric Line tracks will ultimately add back 3,000 replacement public housing, affordable and market-rate units, says 4th Ward Alderman Toni Preckwinkle. There already is a waiting list for the first one- and three-bedroom units coming to market, according to Boston-based The Community Builders, part of the development team for the rental portion of the project.

Financing for the $42-million, 129-unit for-sale portion that will be built next year will come from Fannie Mae and other lenders, says Beth McGuire of the city’s department of planning and development. The loans also are guaranteed by the MacArthur Foundation, which the charitable organization has done with other CHA redevelopments. However, McGuire says $3.5 million in tax increment financing is needed to make the project financially feasible for Granite Partners for Oakwood Development LLC.

Likewise, the $1.9 million in tax increment financing for the next 162-unit, $37.3-million round of rental housing construction is just one piece in the structure built almost entirely on government money. City housing commissioner John G. Markowski notes 90% of the money is coming from city and federal sources, including HOME funds from his department and federal HOPE VI money. Low-income housing tax credits also are being used by Madden Wells Phase 1B, LP as equity, and the developers are getting a $3.75-million loan from Oak Brook-based Enterprise Mortgage Corp. first mortgage. The TIF money will be used to take out a $1.75-million second mortgage, McGuire says, also coming from Enterprise Mortgage.

The financing package was endorsed Tuesday by the community development commission, whose former chairman, Joseph Williams, is president of Granite Partners.

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