Developer scores tax-break funds
for apartments near Pilsen
By Editor Crain's Chicago
A Chicago apartment developer has broken ground on a $65 million project just north of Pilsen, using a financing tool that’s popular in other big cities but has yet to catch on here.
Cedar Street and its partner, Chicago-based Origin Investments, began construction last month of Pilsen Gateway, a 202-unit high-end apartment building at the corner of Blue Island Avenue and 15th Street. The firms are financing the development through the federal opportunity zone program, which offers tax incentives to investors that finance projects in blighted areas.
Pilsen Gateway is one of the few opportunity zone projects underway in Chicago, and possibly the biggest. It is the first in Chicago for Origin, which launched an opportunity zone investment fund in 2018 but until now had bypassed opportunity zones in its hometown for those in cities like Phoenix, Charlotte and Houston.
Some investors say the program hasn’t taken off in Chicago because few of the city’s opportunity zones are in transitioning neighborhoods, places that need a boost but are in the path of development. Many are in depressed areas that are still too risky, even with tax incentives, the investors say.
But Pilsen Gateway sits within the University Village/Little Italy neighborhood on the edge of Pilsen, an area with strong growth potential that has already attracted plenty of investment. That’s one reason Origin invested in the project at 1461 S. Blue Island.
“It is one of the few transitioning neighborhoods” in a Chicago opportunity zone, said Origin Principal and co-founder Michael Episcope.