After trimming a South Shore apartment tower plan, Johnny Mullins is ready to take his proposal for a vacant property from foreclosure to financed.
Funding for the project, though, isn’t guaranteed and has already been denied once, setting back Mullins firm, Chicago-based Model of Transformation and Design, Block Club Chicago reported.
Mullins is president of Model, which is aiming to build 153 apartments across 22 stories at 7162 South Exchange Avenue in the South Shore neighborhood near a Metra commuter train station.
The new plans amount to a cutback from a 30-story proposal Model was kicking around when it applied for a Chicago Recovery Grant last year to help fund the project, and was denied because it hadn’t finalized the plans. Plus, the city suggested a smaller building. The firm is submitting another application for the grant program, seeking the maximum $5 million amount for the project set to cost about $61 million.
Model’s pitch is also the latest instance of multifamily players making moves to bring more value and bigger buildings to South Side areas including the nearby Jackson Park Highlands and Woodlawn neighborhoods that have drawn investors into higher deal volumes since the Obama Presidential Center development started progressing in Jackson Park.
Even if it scores the grant, the firm would still need to raise about $10 million more in equity to finance the project and would seek other grants as well as private investment via crowdfunding, among other financing sources, it said.
While 80 percent of the apartments would be market rate with rents free to fluctuate as high as the market can support, about 30 of the units would be reserved as affordable to satisfy city zoning requirements.
Model closed on purchasing the vacant property for $250,000 in 2021, when it was in foreclosure, after more than two years of negotiations.
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— Sam Lounsberry