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Upscale, downscale: old allies at odds in Kenwood housing dispute

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Twenty-five years ago John McDermott and Robert Lucas were allies in the movement for open housing and civil rights in Chicago. Now they're on opposite sides of a heated battle over an abandoned 33-unit apartment building at 4910 S. Blackstone.

For the last two years Lucas, executive director of the Kenwood Oakland Community Organization, has planned to convert the building into apartments for moderate-income residents. But McDermott, a longtime Kenwood resident and chairman of a group called the Kenwood Open House Committee, vigorously objects. "I respect Bob's contributions to the civil rights movement, but I can't support KOCO's plan. It would concentrate too many poor people into too small a space. It's substandard housing."

After nearly a year of spirited organizing, McDermott and his allies have the upper hand. The city housing department and the local alderman, Toni Preckwinkle, have turned against the project. And KOCO may never complete it, despite having spent about $100,000 in predevelopment costs. KOCO may not even own the property deed anymore.

All of which leaves Lucas feeling upset and betrayed. "I guess the good folks of Kenwood just don't want to see anyone who's not upscale moving into their community," he says. "They think the rooms are too small, but they're no smaller than any college dorm. Do you think they'd be making such a fuss if we were renting to college kids? The issue is one of economic class, and I'm a little disappointed to see my old friend John McDermott playing along."

The four-story apartment building (once known as the Hotel Riviera) is across the street from Hyde Park's public library. It became a flophouse years ago and was finally boarded up in the late 1970s.

In 1987 the county made the building available as part of its tax-reactivation program, through which vacated properties are sold for $1 to not-for-profit community groups. "The purpose of the tax-reactivation plan is to put property back on the tax rolls and encourage low-income development," says Lucas. "The county forgives the tax debt on property and gives its deed to a not-for-profit developer. There's only one hitch: from the day you get the deed you have two years to start construction. If your project is not ready to go after that, you lose the deed."

KOCO planned to rehab and rent the building's 9 one-bedroom and 24 studio apartments, charging $475 for the one-bedroom units and $400 for the studios. Residency would be restricted to tenants with incomes between $16,500 and $20,832 for the one-bedrooms, and $14,000 to $18,228 for the studios. "This is moderate-income not low-income housing," says Lucas. "People who live here will have some kind of jobs."

It took nearly two years to complete all the paperwork, but on May 8, 1989, KOCO was awarded the building's deed. By the spring of 1990 KOCO had assembled a $1.3 million rehab package, which included a $525,000 mortgage from First Chicago and loans from two not-for-profit lending groups. "To make the deal work, we were counting on a $400,000 loan from the city," says Lucas. "The city knew that--we'd been talking with them about this project for months."

On March 28, 1990, KOCO got a hopeful message in the form of a letter from Stephen Gladden, a deputy commissioner in the housing department. "Based on a preliminary analysis of the package, the project appears to meet the department's basic underwriting criteria and eligibility for funding," Gladden wrote. "A final decision will be made in 30 days."

But 30 days dragged into four months without a word from the city. Finally, in July, KOCO met with Michael Schubert, commissioner of the housing department. "Mr. Schubert told us that we had met all the requirements for the program," says Lucas. "He said it would go to the City Council in a few days--the council has to approve these kinds of loans. And then almost as an afterthought, Schubert said, 'There's a guy named John McDermott who's complaining about the building. Go meet with him.' I said, 'Mr. Schubert, I will gladly meet with John, but I want to know: will the outcome of that meeting have any bearing on your decision?'

"Schubert said no. That's very important. He was telling us that he was going ahead with the project regardless of what John said."

Schubert could not be reached for comment, but other department officials question the accuracy of Lucas's recollection. "I don't see the commissioner making that kind of statement to Mr. Lucas or anybody," says Hugh Murphy, a deputy commissioner. "There is a long process applicants have to go through, and community input is a very important part of that process. Mr. Schubert is not going to approve a project that the community opposes."

In August 1990 Lucas and the Kenwood Open House Committee met at McDermott's home. It was a cordial meeting, but McDermott pressed his point that the apartment units would be too small to attract the kind of moderate-income tenants Lucas wants. As a result McDermott feared that KOCO would soon be forced to rent to tenants whose income was below the guidelines and that the building would soon be taken over by the poor, whose rents couldn't cover the maintenance.

Lucas countered that there is a market for the small units among the moderate income in the area, and that a vigorous tenant screening process would be enforced.

Still, the committee members were troubled by KOCO's track record. Kenwood is really two different communities. The neighborhood south of 47th Street is integrated and financially stable; north of 47th Street lies one of the south side's poorest slums. For the most part, KOCO has won praise for its efforts north of 47th. Across the street, however, it's a different story. One building the organization managed fell apart for lack of repairs and was eventually demolished; another KOCO-managed building is now in housing court.

Lucas argues that KOCO should not be faulted for the problems of either building, but Kenwood residents remain unconvinced. "You can give all the explanations in the world, but KOCO's track record in our community is not good," says McDermott. "And that doesn't help them."

Despite their concerns, the committee offered Lucas a deal: if he agreed to increase the size of the units and raise the rents--guaranteeing moderate-income tenants--they would support his plan.

Lucas refused. "The plan wouldn't work with anything less than 33 units," he says. "We needed the rent from all of those units to pay back our loans."

After that meeting all talk of compromise died, and the committee stepped up their opposition campaign. They circulated petitions, wrote the mayor, and sent letter after letter to the Hyde Park Herald.

Within a few months it was apparent that their efforts were working. Schubert, Lucas noted, no longer responded to KOCO's phone calls or letters. Word had it that Frank Kruesi, a Kenwood resident and key mayoral adviser, had turned Mayor Daley against the project. For whatever reason, the city was not responding to KOCO's pleas for financial assistance, and time was ticking away. KOCO had to start construction by May 8 or lose its deed. On May 8 Schubert sent Lucas a letter saying that the city would not fund the project.

"He said he was turning against us because of substantial community opposition," says Lucas. "The killer was that the city took so damn long to make up its mind. If they had just turned us down a year ago we could have looked elsewhere for funding. Instead, they let us waste a lot of time, energy, and money."

KOCO turned to Preckwinkle, the Fourth Ward's newly elected alderman, in a last-ditch effort to persuade the city that local opposition was limited to McDermott and a handful of his friends. "John goes around spreading misinformation," says Lucas. "He calls our project an SRO. I've got nothing against SROs, but it is inaccurate to use that word in this case. Our building has income requirements. The people who would live there have jobs. And it's not substandard housing. The studios are 13 feet by 13 feet--that's as big as any studio in the city."

Preckwinkle wrote to Schubert, asking that he grant KOCO an 18-month extension. (Schubert did not respond to Preckwinkle's letter.) "I asked for the extension so I could have time to gauge the attitude of residents in Kenwood to the proposal," says Preckwinkle. "I'm a supporter of low- and moderate-income housing, but I also believe residents should have a say in these matters."

On August 14 she convened a meeting so that KOCO could officially present its plan to the community. At first the meeting consisted of a dry recitation of building measurements and floor plans. Then Doug Gills, KOCO's deputy director, took the floor. "This is about race and class," he said. "Do [the plan's opponents] want all poor people off the lake? What are their motives for being against KOCO? I say it's time they stand up for what's really on their minds."

At least two dozen residents--blacks as well as whites--answered Gills. "That's a smear," said McDermott. "We are not an evil, racist community. We are a good community. We have a lot of subsidized housing. Kenwood is one of the only integrated communities in the city. We appeal to KOCO to go back to the drawing board and come back with a better plan. If you can't do that, get out of the way and let some other developer in who can do a better job."

Ten days later Preckwinkle sided with the Kenwood Open House Committee. "I'm asking that Housing not extend the deadline," she said. "The project does not have community support, and it's obvious no compromise can be reached."

Without Preckwinkle's support, most observers figure the matter's closed (particularly now that KOCO's two-year deadline has passed). But Lucas concedes nothing. "The only reason we missed our construction deadline is because the city delayed action on our plan," he says. "They can't take our deed away. If they don't like that, they can see us in court. I don't care what McDermott or anyone else says--this game is far from over."

Art accompanying story in printed newspaper (not available in this archive): photo/Lloyd DeGrane.

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