How the industry is preparing for the potential Olympics
By Morgan Phelps
With a new Chicago-based President soon to take office and the International Olympic Committee deciding the host city for the 2016 games in less than a year, the real estate industry is readying itself for the potential development and growth made possible by a Chicago home for this global event. But before rushing into large-scale projects, developers, agents and lenders must contemplate where the impact of the event lies and what the state of the economy means for Chicago’s Olympic development.
“There’s a mixture of opinion of individuals on if its good or not for the city,” says Alan Lev, 2008 president of the Home Builders Association of Greater Chicago (HBAGC). “Some think it will spur redevelopment and growth in the area. Others think it’s a pain in the neck. Some people that think it’s a good thing are buying property down there to prepare for possible development in the area.”
There are small disputes about where the exact impact of this global event lies Ð from Washington Park to the city of Chicago to miles outside the city in the suburbs. But whether or not it is a neighborhood, city or county issue, the real estate community is largely in favor of Chicago hosting the Olympics in 2016.
With new homes and redevelopment of old ones comes new opportunities for lending in the area. “There’s great potential down there [on the South Side] because there’s land that can be had for aggressive prices,” says Marc Churchill, a vice president for National City Mortgage. “The biggest area in terms of potential development and where people are going to place themselves in preparing for the Olympics is going to be on the South Side.”
The Chicago Association of Realtors (CAR) has thrown its support in favor of the Olympic bid, which will be decided in October 2009. They plan to do focus groups and studies on community effects once the decision is made or becomes more apparent, says Brian A. Bernardoni, director of governmental affairs for CAR. “It’s premature for us to do focus groups and resources on it [now], but we’re ready for it,” he says.
The HBAGC does not have a stand on the issue because their branches extend into the suburbs, and they tend to shy away from making stances on city issues. Lev, who is also president of Belgravia Group, says his company is not making a move to develop on the South Side at this time because “it’s just not our business model, not our product.”
Realtors and developers already based in the South Side are poised to greatly benefit from the Olympics. “It’s something I’m very much in favor of as a homeowner, investor and Realtor in the area,” says Pam Dempsey, broker and owner of Bronzeville Properties. “Right now, my feeling is that we need the Olympics.” She believes this opportunity will be “potentially highly beneficial to the Bronzeville area” and could be “a real shot in the arm for the area.”
“The unified message of the business community, at least as far as downtown goes, is in support of the Olympics,” says Bernardoni. But he warns that a lot of thought and planning need to go into any big moves and developments in terms of both the industry and the city.
Neighborhood and city impact is important to consider in this global endeavor because large arenas, sporting venues and Olympic housing will be built amidst already developed neighborhoods. “Land use is a major issue, if not the main issue,” says Bernardoni. “The land use issue needs meaningful debate.”
Currently, a debate centers around where the Olympic Village will be built. A plan to build it on the defunct Michael Reese Hospital was rejected late September, but George Rumsey, president of the Hyde Park-Kenwood Community Conference, believes that was just part of the city’s greater Olympic plan. He thinks the village will either be built there or just north of that property.
Another part of the Chicago 2016 plan is the building of a massive Olympic stadium in Washington Park. This calls for moving of roads, changes to the main CTA stop in the area and shuffling of current properties.
Residents in Washington Park are concerned about “what happens to the park before, during and after,” says Rumsey. He adds that Hyde Park, Washington Park, Jackson Park and Bronzeville residents are also worried about transportation and what the Olympics mean for their property values and property taxes. “We’re not just talking about transit during the Olympics,” says Rumsey. “There’s going to have to be massive construction going on for years to get ready for this.”
The industry must also consider what will happen to Olympic housing after it is built. South Side community groups are advocating that 30 percent of the Olympic Village should be turned into affordable housing once the games are over, to make up for the Chicago Housing Authority’s massive reduction in public housing and displacement of its former residents in the past 10 years. Rumsey says there has been no response from the city or 2016 Olympic Committee as to if this is being considered.
Current market conditions also raise concerns about just how involved Olympic developments can get and who is going to fund them. But no matter what the state of the economy is now “the Olympics are going to be held somewhere in 2016 and Chicago is one of the finalists,” says Churchill.
Although people are already weighing in heavily on the plan and preparing for development, there is a long way to go before the Olympics. There is still nearly a year before it is even decided where the Olympics will be held, and Barack Obama still needs to step into office. The global economy has a long time to recover before the Olympics become a reality for Chicago or another city.
“We do have a time horizon of seven to eight years and a lot can happen in that time, including planning and infrastructure,” says Churchill. “The markets are obviously cyclical and it would be great to see some neighborhoods return to the regal status that they once were. The Olympics coming to Chicago would facilitate that happening.”
Morgan Phelps is a graduating magazine journalism student at Columbia College Chicago. Phelps also spent a summer as an intern for Chicago Agent magazine. She can be reached at [email protected]