Roszak/ADC
Developer changes plans for Evanston project
Crain's Chicago Business
11/28/2007
Alby Gallun |
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(Crain’s) — Amid the downturn in the condominium market, the developer of a big condo project under way in downtown Evanston is making a mid-course correction, switching to apartments and an Aloft hotel for part of the site.
Evanston developer Roszak/ADC has already constructed two buildings with 120 condos in the Sienna, a project at Clark Street and Oak Avenue that it launched in 2004. The firm had originally planned two more mid-rise structures with 136 condos on the site but now wants to put up a 70-unit apartment building and a 111-room hotel instead.
“This is just a better thing for the project right now,” says Thomas Roszak, president of the firm.
More condo developers are exploring similar diversification strategies as they ride out a residential slump that began two years ago. Townhome and condominium sales in the Chicago suburbs fell 35% in the first nine months of the year from the year-earlier period, according to Tracy Cross & Associates Inc.
Local apartment and hotel investors, meanwhile, are preparing to close the books on their best year of the decade. The vacancy rate for Class A apartments in Evanston is just 4%, and rents are rising, Mr. Roszak says. He’s negotiating with lenders interested in financing both buildings and aims to begin construction next spring.
Mr. Roszak, an architect, is keeping the original design for the third building but now plans to rent out the units as apartments. He says he may convert them to condos in three to five years, when the residential market is stronger.
For now, however, the developer has stopped marketing condos in the building and plans to cancel contracts with buyers or find them units in the second building, which will open next month, Mr. Roszak says. Buyers have signed contracts for less than half of the 70 units in the third mid-rise.
On the hotel front, Mr. Roszak says he is negotiating a franchise agreement with Starwood Hotels & Resorts Worldwide Inc., which controls the Aloft chain, and plans to have a deal signed in the next two months.
Starwood unveiled the mid-priced hotel brand in 2005, with plans to open the first Aloft next year and 500 by 2012. Other local developers have proposed Aloft hotels in downtown Chicago, Oak Brook and Lincolnshire.
The Evanston hotel would compete with the Hotel Orrington and Hilton Garden Inn in downtown Evanston and the Doubletree Hotel & Conference Center Chicago North Shore in neighboring Skokie. But it wouldn’t offer a serious threat for weddings and other big events because of its limited meeting space, says David Schwartz, managing member of Chicago-based Waterton Associates LLC, an investor in the Doubletree.
City officials are “very positive” about Mr. Roszak’s new plan, the developer says, but have yet to sign off on it. A city planning official did not return a phone call Tuesday afternoon. |
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