Historic
conversions offer landmark All adaptive
reuse condominiums in the city are not created equal. According to Appraisal
Research Counselors’ latest “Downtown Chicago Residential
Benchmark Report,” a whopping 1,703 adaptive reuse residences
were marketed in 2004, and 1,318 units were sold. There are many
advantages to historic buildings that were not originally built as
condominiums and are later converted, including classic architecture
and solid construction. But only a few adaptive reuse buildings come
with the special landmark tax break that can save thousands of tax
dollars during the early years of ownership. Under a state
program, the developer of an owner-occupied historic residential building
can apply for a tax break that “freezes” the assessed valuation
of the homes near pre-development levels for eight full years following
the completion of the rehab, with an additional three years of gradually
increasing assessments. At the upper rung
of the landmark condo market is the Ambassador, a 1920s vintage hotel
at 1300 N. State Parkway, which recently received approval for an
11-year assessment freeze. The former 225-room Ambassador West Hotel
is being converted to 38 luxury condominiums in Chicago’s Gold
Coast by L3 Development. “Designed
and built between 1919 and 1920 by the Chicago architecture firm of
Schmidt, Garden & Martin as the original Hotel Ambassador, the
building is an important contributing structure in the Gold Coast
Historic District,” noted landmark expert Daniel Bluestone, professor
of architectural history and director of the Department of Preservation
at the University of Virginia. Bluestone noted
that buildings in the Gold Coast Historic District “contributed
to one of the most notable dramas of late 19th century Chicago urbanism”
– the relocation and re-concentration of wealth and fashionable
residences from the Prairie Avenue district south of downtown to the
area now known as the Gold Coast, north of the Loop. “The growing
prestige of the neighborhood attracted luxury highrise apartment and
hotel construction starting in the 1890s that slowly gave the area
its dynamic contrasts,” Bluestone said. “The presence
of the highrise apartment buildings and hotels in the district, well
exemplified by the Hotel Ambassador, concentrated wealth in the neighborhood
and provided a density of people and quality architecture that is
central to the identity of the Gold Coast as a social and architectural
system.” “The landmark
status of the Ambassador not only recognizes the architectural and
historic importance of this prestigious building, but it will greatly
benefit condominium buyers…” said Fernando Leal, partner
in L3 Development. “The building’s
landmark status gives purchasers of luxury residences at the Ambassador
the benefit of a tremendous break in their real estate taxes,”
Leal said. “The best part of the program is that it is a benefit
for the first owner occupants, not for the developer,” noted
landmarks consultant Philip Krone. The typical buyer
at the Ambassador will save more than $100,000 in real estate taxes
over the first eight years of ownership, Krone said. Prices at the
Ambassador range from $1.15 million to $6.5 million. At the affordable
end of the landmark adaptive-reuse market is University Station Lofts,
a historic 231-unit adaptive reuse condominium conversion underway
at 1550 S. Blue Island, on the fast-growing Near West Side. Sales
have passed the halfway mark and demolition is now underway at University
Station. “One reason
sales have been strong at University Station is because the building’s
landmark status offers buyers a tremendous break in real estate taxes,”
said co-developer Ted Mazola, president of New West Realty and a development
partner in the project. The vintage 11-story
building, which originally housed the Produce Terminal Cold Storage
Co., recently was listed on the National Register of Historic Places,
Mazola said. “That means
buyers at University Station will receive a tax break that limits
their tax bill to approximately $200 a year for 8 years,” Mazola
said. Approximately
115 lofts have sold to date at the popular development, said Cindy
Molitor, sales manager for New West Realty, exclusive marketing and
sales agent for University Station Lofts. “A nice selection
of upper-floor residences are still available with dramatic, unobstructed
downtown views,” Molitor said. Prices begin at
$180,900 for a one-bedroom unit with 719 square feet of space and
range upward to $428,900 for one remaining three-bedroom loft with
three baths and 1,715 square feet of living space. |