Evanston aldermen approved a special use permit Monday for renovation and expansion of the former North Shore Retirement Hotel at 1611 Chicago Ave., but decided not to require the developer to set aside any units as affordable housing.
Two weeks ago, aldermen continued two possible ordinances approving the building, one of which would have required that 10 percent of units be reserved for affordable housing. On Monday, city council members voted 5-3 to approve the ordinance without an affordable housing requirement. Ald. Delores Holmes (5th Ward), Ald. Jane Grover (7th Ward) and Ald. Mark Tendam (6th Ward) were in opposition, while Ald. Don Wilson (4th Ward) was absent from the meeting.
Horizon Realty Group, which bought the building in August 2012, is planning to spend $15 to $20 million to renovate the existing building and construct an eight-story, 85-foot tower addition, bringing the total number of units from 185 to 205, according to developer Jeff Michael.
Asked whether he could include any affordable set-aside, Michael told council members any affordable housing set-aside “would be unfeasible,” and his company would not be able to get bank financing for the project.
“If we’re going to start imposing other restrictions and limitations on this thing, then we’ve got to start all over,” Michael said.
He also said that the North Shore Retirement Hotel, now renamed the North Shore residence, had been losing money for years. In fiscal year 2011, he estimated that the former owners had recorded a $600,000 operating loss.
“If we didn’t buy this, we wouldn’t be talking about saving senior housing, we’d be talking about a wrecking ball,” he said.
Already, however, rising rents at the hotel have forced some seniors to move out, according to Joey Conway, a board member for the nonprofit Senior Connections. Conway said that more than 70 people had moved out of the North Shore Residence since it was sold because they could no longer afford to live there. Finding affordable housing as a senior within Evanston is tough, he said, because many of the housing options are more expensive, or if they are HUD-subsidized, have a very long waiting list.
“The need for affordable housing is real,” Conway said, adding that the population of seniors in Evanston has been increasing over the last decade and is expected to continue growing rapidly.
“This is driving out people who have spent their lives building a home in this community,” he said.
But Michael said that rent increases were necessary at the North Shore Residence, given the cost of improvements being made to the building. Planned improvements include construction of a four-season lobby atrium below a massive skylight, a rooftop terrace, new fitness center, spa and restored banquet hall.
“What we have to do there is a huge undertaking,” Michael said. “The building is in dire need of renovations.”
He estimated that the average rent would be $2,500, including a meal plan, utilities, nursing services, furnishings and housekeeping.
Ald. Delores Holmes (5th Ward) said she did not understand how a 10 percent affordable housing set-aside could stop the project, and described that as “the right thing to do.” Ald. Jane Grover (7th Ward) seconded her concern, saying the city needed to be adding more affordable housing units for seniors to keep pace with the aging population.
But Ald. Judy Fiske, who represents the first ward where the North Shore Residence sits, said she believed it would be unfair to require Horizon Realty to add an affordable housing set-aside this late in the project.
“If we are going to have an affordable housing set-aside like this, we should tell you when you buy the property, so you can decide what you want to do, whether you want to continue investigating the purchase of the building,” she said. “To spring that on you late in the day is not fair.”
She also acknowledged that the building needed major renovations, and paying for those renovations would require money and therefore an increase in rents.
“The current vision is basically, keep it the way it is,” she said. “That’s not going to work.”