Jul
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Having it All at Mixed-Use Properties

July 28, 2013

Mixed-use communitiesSuzanne Karan was midway through a recipe when she realized the container of sour cream in her refrigerator, a key ingredient, had expired.

No problem, she thought, remembering the convenience store on the ground floor of her apartment building. Minutes later, after a trip to the store’s refrigerated cases, Karan had sour cream in hand and was back to her recipe.

Nearly everyone can relate to urgent needs for missing items: a searing headache and an empty aspirin bottle; a full box of cereal, but an empty carton of milk; a 10 p.m. craving for chocolate chip cookie dough ice cream.

But for Karan, a resident of Chicago’s McClurg Court Center, these situations are usually easy to remedy. In addition to the convenience store, her building shares space with a bank, dry cleaners, hotel and dentist’s office.

The hotel came in handy last winter when family members visited. The dentist was key on an unpleasant morning when she woke up with a toothache.

While these businesses weren’t one of the main things that attracted her to the building — plentiful closet space and a no-dogs policy were more important — she has come to appreciate them. She has lived in an 810-square-foot, one-bedroom apartment at McClurg Court Center for the past two years.

Mixed-used properties like the one where Karan lives have space for different functions, such as office, residential and retail, under the same roof or in closely connected spaces. For some apartment dwellers and condo owners, they provide the ultimate in convenience, with home, shopping, entertainment, and in some cases even work, nearby.

At Wicker West 1555 in Chicago’s West Town neighborhood, the property’s nine condominium units have been sold. Still to be listed, though, is a 3,000-square-foot, ground-level space, which will be offered as a combination commercial-residential space, said Sara Benson, president of Benson Stanley Realty and the listing agent for the properties.

The space might appeal to a personal trainer, therapist, consultant or artist, who will be able to divide it into living and commercial space under the “business live-work” ordinance passed by Chicago’s City Council last year.

Building homes close to jobs, stores and places of entertainment is nothing new. Before the automobile age, it wasn’t uncommon for shopkeepers to live above their stores, or for the neighborhood butcher and baker to be an easy stroll away.

Proponents say the advantages of mixed-used developments are many: Development is more compact, neighborhoods are full of character and people have access to fresh, potentially healthier, food.

The retail presence also helps answer a practical question, said Diana Pittro, executive vice president of RMK Management: what to put on the ground floor of mid- and high-rise buildings since few would want to live there. Pittro said many retailers apply, but the winning candidates must offer a service residents will value.

“The first question we ask is: ‘Will it benefit residents?’” she said. “If it’s something that will, we pursue it. If it won’t, we don’t.”

RMK Management oversees rental properties and condos in Illinois, Indiana and Michigan.

Pittro said coffee shops, bakeries and casual restaurants with healthy fare have seemed to work best at RMK’s locations, which include McClurg Court Center and Central Station in Evanston, a rental property scheduled to open to the first tenants in late summer.

While their virtues can be many, mixed-use developments may not be the right choice for every location — or every resident, said Sean Davis, principal of Morris & Ritchie in Laurel, Md., and a community planner who has advised developers of mixed-use properties. Convenience must be balanced with the potential for headaches from business tenants who may be incompatible with residents’ lifestyles.

He advises potential residents, especially those who are buying property, to search for developers who have had success with the model. And, he said, pay attention to the commercial tenants who have signed on with the project, particularly those whose businesses may generate excessive noise or parking traffic. For example, liquor stores and nightclubs could be open all hours. Pet grooming businesses might contain barking dogs.

“From the actual operations standpoint (running a mixed-use property) can be tough,” Davis said. “I have the potential to have two groups on-site with conflicting interests.”

At Magellan Development Group’s 28-acre Lakeshore East community, a mix of rental and condo properties on Chicago’s Near East Side, food-based businesses are king, said Magellan Senior Vice President Brian Gordon.

In particular, residents have warmly received the 55,000-square-foot Mariano’s Fresh Market, which opened in late 2011. After it arrived, Gordon noted an uptick in the community’s condo prices, he said.

“I had a residential broker hug me,” he said.

Residents are even given Magellan Rewards cards, which can be used at some on-site businesses.

With restaurants, stores and movie theaters under one roof, mixed-used developments provide fun things to do that are steps away. These amenities attract empty nesters and members of the young Generation Y, Davis said.

“These two groups don’t have children living at home with them, and they are looking for entertainment value,” he said.

The developments also appeal to people trying to reduce their environmental impact and live a green lifestyle. Some Lakeshore East residents have decided they don’t need a car with so many services at their fingertips, Gordon said.

Another mixed-use development, Harper Court in the Hyde Park neighborhood, will open its office, retail and hotel components this fall, said Chris Dillion, managing director of Vermilion Development, and a partner in developer Harper Court Partners. A residential component will follow at an undetermined point, he said, with as many as 425 units scheduled to be built at three sites.

The 3-acre development is to include 150,000 square feet of office space, and 75,000 square feet of retail space with such tenants as Ulta Beauty, Chipotle Mexican Grill and Red Mango frozen yogurt.

“What better place to live than right on top of that?” Dillion said.

This post was originally published in the Chicago Tribune on July 26, 2013.

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