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Affordable Housing Meeting for Arlington 425 Not Conclusive After Over 3 Hours of Deliberation; Financial Details, Affordable Housing Standards Snag Decision

Tue April 30 2019 2:45 pm  https://www.arlingtoncardinal.com/?p=576485
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Many details were covered at Monday Night’s Housing Commission meeting April 29, 2019, but no decision was made after running through the complex finances and goals for affordable housing. Also, some local residents want assurances that affordable housing will not result in increased crime. However, the majority of time and energy at the Housing Commission meeting was spent listening to local and outside residents who want to press Arlington Heights to increase affordable housing units; and toward the negotiation process involving CCH LLC’s developer and attorney, who want conditions for Arlington 425 that allow the developer to make a profit as a business, and to be a good steward of the property.

Ultimately the stamp of approval of the development failed to occur because the members of the Housing Commission were not yet comfortable with the financial details and affordable housing details that would help the Village of Arlington Heights comply with affordable housing requirements.

Michael D.Firsel (left) and Bruce Adreani meeting with Arlington Heights Housing Commission

Michael D.Firsel (left) and Bruce Adreani meeting with Arlington Heights Housing Commission.

There were four main factors in attendance at the meeting:

1. the housing commission and village staff,

2. the developer and attorney,

3. Reclaim Northwest Suburbs (some from beyond Arlington Heights) and individuals who reside in Arlington Heights who are in favor of the development, and

4. residents concerned that introduction of affordable housing could increase crime or negatively affect downtown Arlington Heights and nearby neighborhoods.

The Village of Arlington Heights Housing Commission favors the Arlington 425 development, but with uncertainty regarding finances and affordable housing capacity. Reclaim Northwest Suburbs favors the project as long as it includes the maximum possible affordable housing units.

The concerned residents do not favor the project or do not favor it without assurances that it will not produce issues similar to the Parkview Apartments at 212 North Dunton Avenue in Arlington Heights, where increased crime and police calls have been reported.

Reclaim Northwest Suburbs Signs 54 4 425

Reclaim Northwest Suburbs Signs 54 4 425

Reclaim Northwest Suburbs was in attendance to push for a maximum number of affordable units possible for the three buildings. Some activists were carrying “54 4 425” signs, referencing that they want 54 units in the proposed project, instead of only 18 proposed by the developer. Reclaim Northwest Suburbs activists were also pushing for the establishment of an ordinance that would impose stricter guidelines for developers to assure affordable housing meets the needs of community housing needs. They view targeting Arlington Heights as part of an areawide problem.

Arlington Heights currently does not have an affordable housing ordinance, but there are affordable housing ordinances established in Evanston, Highland Park, and St. Charles.

Residents expressing opposition to the project brought up problems involving police calls and an aggravated battery that occurred at the Parkview apartment building. These residents were looking for assurances that Arlington 425 would not follow a similar path as Parkview.

Charles Witherington-Perkins, Director of Planning and Community for Arlington Heights, emphasized negative reports from Parkview as coming from an article from Arlington Cardinal that didn’t establish sources, and implied the reports were unsubstantiated. However, when Arlington Cardinal asked Charles Witherington-Perkins whether he had ever heard of these issues and whether FOIA requests would uncover any of these internal communications about the Parkview issues, he admitted that he was aware of issues with the Parkview apartment building.

Similarly, Housing Committee Chairman Mark Hellner, who is an attorney, described using unnamed sources as “dangerous,” saying statements without sources would never hold up in court. Hellner said that most of the police calls to Parkview were related to parking calls. When he was asked to produce his source regarding the majority parking calls conclusion, he replied he learned this from Building and Zoning. When he was asked whether it wouldn’t be better to contact the police department for police call information, he replied that there is no correlation of low income persons with crime. He was also asked if he was not aware of the aggravated battery that involved a grandmother allegedly beaten by her grandson, who also allegedly tried to disarm a police officer while resisting arrest. He replied that he was aware of the aggravated battery. Hellner, who is the Executive Director for the Center for Disability and Elder Law, had replied to a resident concerned about the crime at Parkview that this was just one “bad guy.”

Reclaim Northwest Suburbs activists also sought to suppress any comparison of the 425 Arlington project to the Parkview apartment building.

Ultimately, the understanding of how much affordable housing might be implemented in the Arlington 425 project was not clearly understood, because the acceptance of Section 8 vouchers were also discussed, in addition to the proposed 18 affordable housing units.

The housing commission spent over three laborious hours from 7:00 p.m. to just after 10:00 p.m. Monday listening to public comments that were supportive and skeptical of the development. Housing commission members also discussed details in open session with developer Bruce Adreani of CCH, LLC, and his attorney, Michael D. Firsel.

CCH has offered providing a mix of 18 studio and one-bedroom units within the two larger buildings of the three total buildings proposed. The project includes residential and commercial/retail units on the northern three-fourths of the vacant lot bordered by Highland, Campbell, Chestnut and Sigwalt on the west side of downtown Arlington Heights. The project, including a 13-story and 9-story high-rise would be built up, neighboring single-family homes to the south and to the west.

Arlington Heights Housing Commission for Arlington 425 affordable housing

Arlington Heights Housing Commission for Arlington 425 affordable housing.

The Village of Arlington Heights housing commission wants more affordable pricing on the 18 units, and Reclaim Northwest Suburbs want more affordable units — 54 to be exact.

Parking spaces in the parking garage for Arlington 425 may cost an additional $125 per month above apartment rent. Dunton Tower apartments parking space rent by comparison costs $75 per month in the Village of Arlington Heights parking garage. Arlington 425 will involve a privately-owned parking garage.

The Village of Arlington Heights has suggested the apartments be priced for those making at or below 60% of the area’s median income, which amounts to a single person making $35,580 in a year. The figure would help Arlington Heights comply with the state standard of having at least 10% of housing units affordable.

The developer claims in reality the units must be priced at the 80% of area median income figure, which amounts to a single person making $47,400. CCH’s Bruce Adreani and attorney, Michael D. Firsell said that rents at lower levels would prohibit successful economics of the $150 million project by hindering cash flow, obstructing the ability to obtain financing, and preventing the ability to pay real estate taxes.

“If it’s 60 percent, it’s not going to work,” said Adreani during negotiation. “It [the vacant land] will be a dog poop park for the rest of the time. The bank will laugh me out of the bank.” Adreani added, “There’s a lot at stake here. We’re trying to be a good steward of the property.” The developer added there is a lot of teamwork to make this project happen.

The developer has also agreed to the Village of Arlington Heights request to provide fees in lieu of nine units at $25,000 per unit, for a total of $225,000. To spread out the $225,000 cost and make the financial arrangement more feasible, housing commission Chair Mark Hellner asked whether CCH could add those nine actual units to the existing 18 agreed upon at 80 percent of area median income, instead of paying the $225,00 upfront to a village trust fund. Hellner emphasized that would allow the costs to be spread out over time.

CCH attorney Mike Firsel replied a definitive “no.” Firsel also stated, “18 is better than zero.” He was referencing that 18 affordable units is better than no affordable units, if the developer decides to cancel the project.

Hellner replied essentially that the Village of Arlington Heights wants the project. Housing Commission Commissioner Zachery Creer said he was frustrated that the housing commission doesn’t have anything to offer, as do other village units involved in planning stages of developing projects.

Commissioners Andrew Tripp and Will Delea, who described not having enough information, wanted more details from the developer about the project’s projected cash flow, revenue and expenses before making any motions for approval.

Firsel offered a meeting with two commissioners at a time, which Hellner told the audience references that a meeting of two commissioners at a time would not violate the open meeting rules. Witherington-Perkins stated he would have to consult with a village attorney about that request.

Firsel also mentioned that he did not want to reveal any personal financials or loan sources which may involve confidentiality agreements. He did not want any private financial information to be subject to FOIA requests.

Commissioner Creer asked if Firsel could talk to village staff and then the staff could make recommendations to the commission. Creer said he wasn’t comfortable reviewing all the financial information as a commissioner himself. Firsel said he could provide some of that information to the village staff to share with the commission.

Firsel hoped another Housing Commission meeting could be held next week to discuss more detailed financial information, and presumably get a motion of commission approval before the Village Board meeting May 6, 2019. However, the board meeting May 6, 2019 falls on Monday. Firsel joked whether they could have their next meeting at 10:30 p.m. “tonight.”

Developer Bruce Adreani earlier in the evening mentioned they would like to start this project this year. However, Charles Witherington-Perkins also stated that it would be difficult to obtain meeting room availability and make a public announcement regarding an additional meeting in such a short time.

The ultimate decision on the overall project is left up to the Village Board. The housing commission only makes recommendations, which the Village Board could ignore.

The board was set to consider the Arlington 425 project on Monday, May 6, 2019, but with the lack of approval from the Housing Commission, the Arlington 425 project might not come before the board next Monday.

There was an attempt by the Housing Commission and Reclaim Northwest Suburbs audience members to marginalize the concept of low income correlating with crime, which was a strong concern of Arlington Heights residents skeptical about the availability of affordable housing at Arlington 425. The Housing Commission Chair said a correlation involving low income and crime is not true. In closer examination of the topic while studying a published piece sponsored by the World Bank, one might reasonably conclude that it is not the low mean level of income of individuals that correlates with crime, but the increase in income inequality that correlates with increased crime. One might conclude that putting disparate unequal economic groups together in an unnatural manner in a tight geographic location might accelerate crime rates.

The study sponsored by the Latin American Regional Studies Program of the World Bank, published in the Journal of Law and Economics in 2002 [PDF] concluded that an increase in income inequality has a significant and robust effect of raising crime rates. The study concluded that income inequality, measured by the Gini index (a standard statistical measure of income inequality), has a significant and direct effect on the incidence of crime. This result (income inequality vs incidence of crime) is robust to changes in the crime rate when it is used as the dependent variable (whether homicide or robbery), the sample of countries and periods, alternative measures of income inequality, the set of additional variables explaining crime rates (control variables), and the method of econometric estimation.

The authors described finding some interesting results with the study; the following are among them:

First, the incidence of violent crime has a high degree of inertia, which justifies early intervention to prevent crime waves.

Second, violent crime rates decrease when economic growth improves. Since violent crime is jointly determined by the pattern of income distribution and by the rate of change of national income, the authors concluded that faster poverty reduction leads to a decline in national crime rates.

Third, the mean level of income, the average educational attainment of the adult population, and the degree of urbanization in a country are not related to crime rates in a significant, robust, or consistent way.

After some difficult work by all involved at Monday night’s meeting, there were no assurances regarding the development’s finances, the precise number of affordable units, or the conditions of the building occupancy preventing the pattern seen early at the Parkview Apartments.

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