Uptown’s Lawrence House sold for $7.5 million
BY DAVID ROEDER Staff Reporter August 7, 2013 6:18PM
Lawrence House, at 1020 W. Lawrence, has more than 100 complaints pending against it for building code violations. It has been sold for $7.5 million to Cedar Street Co., which plans a renovation.
Updated: September 9, 2013 2:58PM
The condition of Lawrence House, a 12-story apartment building in Uptown, is so bad that emergency work is being done to make sure an outer wall doesn’t collapse, said Ald. James Cappleman (46th).
And an infestation of bedbugs, he said, caused the city to stop booking its lobby as a polling place.
Yet, the former hotel sold Monday for $7.5 million to a buyer whose renovation plans will be closely tracked by community groups, from those glad to see someone fixing a blighted property to others who believe low-income residents are being pushed out.
Cedar Street Co. bought the building at 1020 W. Lawrence in the biggest test yet of its investment approach on the North Side. The company, co-founded by Jay Michael and Alex Samoylovich, buys empty or neglected apartment buildings, repairs them up and adds features such as fitness rooms or in-unit washers and dryers.
It then markets the units as part of Flats Chicago, an attempt to bring hotel-style branding to apartments. The rents are higher than before the work but the company says it improves housing stock while keeping its prices “approachable.”
Michael said developers of subsidized housing examined Lawrence House and concluded no project was feasible. But he said that in his eyes, the building was viable if redone for market-rate rentals.
“We love this building. There are enough units there that it’s possible to work on it and add amenities and still charge reasonable rents,” he said.
Cedar Street plans a $14 million project that will take at least two years to complete, he said. Lawrence House has about 390 units now, but combinations of efficiency apartments could reduce that total to about 350, Michael said.
He said every building system must be replaced. Under the former owners, a partnership controlled by Sam Menetti, there were more than 100 complaints of building violations lodged against the property. First Merit Bank was foreclosing on it and had to agree to the sale.
“This is the most infrastructure I have ever seen failed in an operating building,” Michael said.
Cappleman said that if Cedar Street hadn’t stepped up, Lawrence House would have been a candidate for demolition.
He said he’s been impressed with the company’s renovation of a building at 1325 W. Wilson and how it has handled relocation of tenants.
Uptown, with its uneasy mix of income groups, and Edgewater, have been centerpieces of Cedar Street’s strategy.
In all, its Flats venture has eight buildings covering about 1,500 units. Rehab progress has been slow at some, which Michael attributed to complications in dealing with deteriorated structures and to delays in city building permits. The company’s financing, he said, is secure.
Rents at Lawrence House currently range from about $475 to $600 a month, said Mary Lynch-Dungy, community organizer at the group ONE North Side, which has taken Michael to task for reducing the supply of low-rent units. “It’s almost like last-resort housing before homelessness and we’ve been losing a lot of it,” she said.
Asked if Cedar Street’s activities promise a net improvement on the North Side, she replied, “It’s about balance and just the hope that there’s a way of retaining some affordability. We are not at all anti-development.”
Michael said that once Lawrence House is finished, rents should start at about $850 a month and go higher than $2,000. He said he may retain some of the smallest efficiencies and is open to partnerships with housing agencies that could result in some rents being cheaper.
“We’re getting a lot of people saying they would take those smaller units,” he said.
Cappleman said that of all Chicago communities, Uptown has the most housing with a government subsidy. Balance, he said, demands more investment from market-rate developers.
Alyssa Berman-Cutler, president and chief executive officer of Uptown United, said the Lawrence House renovation should draw young renters who will support the nascent arts district at Lawrence and Broadway.
She agreed with Cappleman that there’s nothing wrong with taking Lawrence House upscale. “Any plan for the neighborhood has to include new, high-quality housing, not the status quo of crummy housing,” she said.