Joint Development Air Rights
Sale
Blair Kamin article in Chicago Tribune,
Sunday, June 20, 2004
Air rights are the vertical space available for development on our site under the current zoning laws. They are an asset Fourth Presbyterian Church owns, a resource for providing for our future.
We are considering the sale of the air rights over the western portion of our current property. The concept is to build a multi-story tower with the church occupying the first five floors. The floors above are sold to a development partner and occupied as residential condominiums. Based on expert real estate analysis done for the Church, the sale of our air rights could close the Project Light funding gap.For more information on air rights and their involvement in the realization of Project Light, read the following documents.
Letter to the Congregation [November 21, 2002]
Letter to the Congregation [September 13, 2003]
Letter to Neighbors [September 13, 2003]
Project Light and Air Rights: Frequently Asked Questions [September 28, 2003]
Letter to the Congregation
November 21, 2003
Dear Friends:
It was ten years ago that “A Light in the City” became a part of our identity, when we adopted our current mission statement. At the time, we were a congregation of 3,700 members. Now, a decade later, our membership has surpassed 5,000 and continues to increase: in October we welcomed 34 new members and baptized 11 children, figures typical of a usual month. We are delighted to be a part of this wonderful growing family!
This growth, not only in our congregation but also in our expanding programs, has put a strain on our current facilities. Many of you routinely experience the space crunch we have on Sunday mornings when we are looking for places for children to attend Sunday School, choirs to rehearse, as well as small groups and Academy courses to meet; and on weeknights when tutors are working with students, Bible studies and classes are meeting, committees are gathering. We simply need more space.
Responding to that need, the congregation voted on June 2, 2002, to endorse the renovation and expansion of our Michigan Avenue facilities as the next phase of our Project Light vision, which grew out of our long range planning process begun in 1998. (As you will recall, the subsequent phases endorsed at the June meeting are to (a) add to our endowment, in order to secure stable funding for our growing programs; (b) make a contribution to McCormick Theological Seminary, in recognition of the strong relationship between our two institutions; and (c) develop a facility on Chicago Avenue where neighbors can come together to build community and where services and help for the underserved in that area can be available. By your vote, the purchase of the land to make that final phase possible took place in June.)
The Project Light Leadership Team, which has been overseeing this project on your behalf from its earliest stages, has taken your endorsement very seriously. The team is committed to ensuring that the church has the space it needs to continue fulfilling its mission as a Light in the City through expanding ministries of worship, education, fellowship, and pastoral care.
To help us reach that goal, the team asked our real estate advisor, U.S. Equities Realty, to investigate space expansion possibilities for the church. During these conversations, we have come to realize the potential opportunity that might be available to us through partnering with a real estate developer to construct a multistory building on land owned by the church—the land where the parking lot, Westminster House, and the Counseling Center now stand. The church would continue to own the land while selling the space above its own building—its “air rights”—in a way to provide income to the church.
Carefully using the property assets with which the church has been blessed could help ensure our ability to continue our mission of being a Light in the City over the next century. But in order to make a wise decision about that, we first need to gather sound information. To that end, U.S. Equities will soon issue, on the church’s behalf, a Request for Expressions of Interest to members of the development community. The responses to that request and the additional information being gathered will be brought to the congregation to determine how we might proceed in addressing our space needs.
U.S. Equities is working with the understanding that any proposed plan must fully respect the architectural integrity and beauty of Fourth Church. We will not bring to you any proposals that would adversely affect the appearance of the church along Michigan Avenue or that would change the sanctuary or the Garth courtyard. We are as committed to that promise as we are to realizing the Project Light vision.
As we learn more from U.S. Equities in the weeks and months ahead, we will update you on the progress of this very thoughtful process. In the meantime, we ask you to continue to celebrate and embrace with us this time of great promise and responsibility in the life of our church. As we move forward, we want you to know that the leadership of Fourth Church is strongly committed to being faithful stewards of Fourth Church’s precious traditions and resources while also advancing the mission of Jesus Christ. We are grateful to God for the wonderful possibilities that lie ahead of us and for your continuing patience and prayerful support.
In the mission statement adopted ten years ago, we recommitted ourselves to the mission of extending God’s love in Jesus Christ into our neighborhood, our city and nation, and the whole world, affirming our goal to be a Light in the City. Today, through Project Light, we strive to ensure that the path we choose as a congregation will allow that light to shine ever more brightly to the great purposes of God.
Faithfully,
Joanna M. Adams
Pastor
John M. Buchanan
Pastor
Letter to the Congregation
September 13, 2003
Dear Members and Friends of Fourth Presbyterian Church:
We are writing to bring you up to date on the progress and process surrounding one aspect of Project Light, the possible sale of air rights over a portion of a planned new church building which will be constructed on the site of the current parking lot, Counseling Center and Westminster House.
Our conversations with possible development partners have continued as authorized by the Board of Trustees and Session in May and reported at the congregational meeting in June. This week our negotiating team will bring a recommendation to the Project Light Leadership Team, the Trustees and the Session, to select a single developer who will be asked to provide a final proposal for a joint development using our air rights.
That proposal will be carefully reviewed by the Project Light Leadership Team, our Trustees and Session. If these bodies accept that proposal and approve the sale of air rights, the issue will come to an open meeting of the congregation for a decision. Prior to that important meeting, we will plan a series of town hall meetings so that you will be fully informed and have your questions answered before making your decision.
There is great community interest in our potential plans and, as a result, over the next few weeks you may see media reports announcing that decisions have been made by the church regarding our plans. Please know that no decisions have been made and no final decision will be made until the congregation meets and votes. The exact date of the meeting will be set when the Session calls the meeting; most likely, it will be near year end.
These are great days for Fourth Presbyterian Church and we are faced with the responsibility of making wise and faithful decisions which will effect our mission and ministry for generations to come. This great possibility that is before us requires your support, your thoughtful and informed decision making, and, as always, your prayers.
Faithfully,
Joanna M. Adams
Pastor
John M. Buchanan
Pastor
Letter to Neighbors
September 13, 2003Dear Neighbor:
We are writing to you keep you updated about our process in evaluating the possible sale of air rights over a part of the western portion of the church’s site.
As you may know, in 1998 Fourth Church began a long-range planning process to determine the best way in which to carry out the mission, ministry, and programs of this growing church. Part of that process is to ensure that we have the physical space needed to meet the needs of our congregation and our mission outreach programs. To that end, we are exploring strategies for renovating our existing space and expanding our facilities.
Throughout the process, we have worked to keep community groups and governmental leaders informed as we evaluate our options, among them possibly selling air rights over a part of the western portion of the church’s site. In evaluating our options, we remain committed to maintaining the architectural integrity and character of both Fourth Church and the surrounding neighborhood. Our aim is to ensure that the final decisions made by our congregation will advance our mission, stand the test of time, and respect our community.
After several years of thought, planning, and prayerful consideration, our very deliberative, Presbyterian process, which has included input from literally hundreds of our members, is just now moving toward a recommendation to select a single development partner who will be asked to provide a final proposal.
Please understand that we have not made any decision regarding the sale of our air rights or the development on our property. And while various groups, committees, and boards will be reviewing and evaluating this recommendation and the final proposal, it is the congregation and only the congregation that has the authority to make the ultimate decision regarding what we will or will not do with respect to development on the western portion of our property. And since the final proposal is yet to be put before any of the necessary committees or boards, a congregational vote and decision—again, the only decision that really matters—may not occur until later this year, and potentially not until early next year.
Within the next month, we will look forward to sharing our recommendation regarding the development partner chosen to prepare a final proposal with our congregation, our community, and, of course, our immediate neighbors. If you are interested, Alison Cooper, our program manager (312.573.3367), will be glad to arrange for a church representative to meet with you personally later this fall.
As Fourth Presbyterian Church continues its plans to address the current and future needs of its congregation and the wide community it serves, we remain committed to being a responsible part of our neighborhood. We will keep you informed and hope that you will not hesitate to contact us if you have questions or concerns.Faithfully,
Joanna M. Adams
Pastor
John M. Buchanan
Pastor
Project Light and Air Rights: Frequently Asked Questions
September 28, 2003What is Project Light?
Project Light is our vision for the future that emerged from the church’s long-range planning process begun in 1998. Involving literally hundreds of members of the congregation, Project Light became a reality in June 2002, when the congregation approved a vision calling for:
Renovating and expanding our Michigan Avenue facilities to address the absolutely critical shortage of program space;
Securing the future of our growing programs by adding to our endowment;
Supporting pastoral theological education with a gift to McCormick Theological Seminary; and,
Developing a facility on Chicago Avenue to help anchor the emerging, mixed-income community and serve as a beacon of understanding for all.
What are “air rights” and why should we consider selling them?
Air rights are the vertical space available for development on our site under the current zoning laws. They are an asset Fourth Presbyterian Church owns, a resource for providing for our future.
Air rights are a gift our predecessors have left for us to use responsibly and faithfully. The value of our air rights asset could be affected negatively by a change in zoning regulations or other building projects adjacent or close to our property.
In our particular situation, we are considering the sale of the air rights over the western portion of our current property—basically where Westminster House and the parking lot playground currently are.
The concept is to build a multi-story tower with the church occupying the first five floors. The floors above are sold to a development partner and occupied as residential condominiums.
The Project Light vision spelled out above requires $52.5 million in funding. We think that we can raise $30 million from the congregation in our capital campaign. (Please pray and give!) Based on expert real estate analysis done for the church, the sale of our air rights could close the Project Light funding gap.
Therefore, acting on the congregation’s behalf as faithful and responsible stewards of the church’s future and its assets, the Elders and Trustees determined that proposals regarding the potential sale of the air rights should be fully explored and, if a feasible and worthy proposal emerged, it should be brought before the congregation for decision.
What process has taken place regarding the sale of air rights and how is it being managed?
We determined our vision and needs. Project Light states the church’s vision and the supporting facilities master plan stated the church’s needs for program space on Michigan Avenue. All proposals had to be compatible with our vision and meet our needs.
We appointed a committee and employed professional assistance. In true Presbyterian fashion, the proposal process began in earnest with the appointment of a committee, now known as the Air Rights Negotiating Team. The three congregants appointed to the committee all have expertise in real estate development:
o Marshall Peck is Chairman and CEO of InterPark;
o Dan Miranda is Vice-Chairman of MB Realty; and,
o David Crawford, formerly Senior Vice-President and General Counsel of Equity Office Properties, is currently co-founder and senior partner of Technology Advisors Group.
The committee was charged with exploring the feasibility of sale of the church’s air rights using a proposal process. We have also employed the outside services of highly regarded advisors: U.S. Equities, a well-known real estate consultant; Perkins & Will, architects; and Jack Guthman, zoning counsel, to assist the committee with its work.
We solicited proposals from qualified, interested development partners. As reported to the congregation in a letter dated November 21, 2002, the committee issued a request for preliminary proposals from select development partners for a joint development that would combine the church’s four- to six- story expansion on the western portion of our site with a tower containing residential condominiums and possibly a hotel. Simultaneously, the committee began conversations with the companies owning sites adjoining ours about the possibility of a joint development on a combined site.
We narrowed the field to three possible proposals. The committee received and evaluated eight preliminary proposals for joint development on the church’s site. In addition, one neighboring property owner, Starwood Corporation (the owner of the Tremont Hotel), expressed interest in a joint development on a combined site. The committee asked that four of the eight preliminary proposals for the church’s site be refined into more detailed proposals and that Starwood present a proposal for the combined site. After evaluating these proposals, the committee and its advisors concluded that three were feasible, including one from Starwood. The committee made a recommendation to the Project Light Leadership Team, the Elders, and the Trustees that negotiations continue with these three potential development partners.
We authorized the committee to continue the negotiations. As reported to the congregation in June 2003, the Elders and Trustees endorsed the recommendation of the committee and authorized the committee to further refine the three possible proposals into letters of intent and report back in September 2003.
We selected a single developer to provide a final proposal. The committee worked through the summer and negotiated letters of intent for all three proposals. The committee presented its recommendation to the Project Light Leadership Team and the Elders and Trustees on September 14 and 16, 2003. This milestone was reported to the congregation in a letter dated September 13, 2003. The developer selected was Edward R. James Partners.
We directed the committee to negotiate a final proposal with Edward R. James Partners for consideration by the congregation. The Project Light Leadership Team and the Elders and Trustees authorized the committee to refine and document a final proposal for congregational consideration in late 2003 or early 2004.
Who is Edward R. James Partners?
Edward R. James Partners is a well-known and highly regarded developer of very attractive residences in both downtown Chicago and nearby suburbs. It is a family business with a reputation for quality and integrity. They also have a long-standing record of community involvement and service, having participated in several not-for-profit ventures, including The Presbyterian Homes of Lake Forest. They bring with them financial and construction partners of equal reputation.
What is their current proposal?
Their current proposal under consideration by the church is for a residential condominium tower, which would be above the north end of the church’s planned expansion.
The exact price for the air rights, the number of condominium units, as well as the exact dimensions and design of the tower are still being finalized. As of now, the tower, fronting Delaware Street, would be 50 plus stories tall. The church space, fronting both Delaware and Chestnut Streets, would occupy the first five stories.
The space allocated for the church in the joint development proposal meets or exceeds all of the needs of the church as defined in the facilities master plan.
The church has the sole right to approve the final building design.
What are the next steps?
The committee will refine and document a joint development proposal with Edward R. James Partners for review by the Elders and Trustees, who will, in turn, determine whether the proposal is worthy for referral to the congregation for decision. It is expected that the proposal brought before the congregation will include:
the proposed terms of sale;
an articulated set of design guidelines for and design features of the proposed development (note again that the church retains full design approval for any development); and,
the structure for the ongoing relationship between the church and the other occupants of the joint development.
The committee will also continue its “good neighbor” practices of keeping our neighbors informed of our process through meetings and letters.
When and how will we reach a final decision?
The final decision as to whether to sell the church’s air rights rests with the congregation. No sale can be made without a congregational vote.
When the proposal is finalized and prior to any congregational meeting, town hall meetings will be conducted where information will be given, questions asked and answered, and concerns aired. Although no date is set for the congregational meeting, it is anticipated it would occur near the end of 2003 or in early 2004.
Who can I contact with more questions?
If you have questions you would like addressed prior to those meetings, please contact Alison Cooper, Project Light Coordinator, at 312-573-3367 or acooper@fourthchurch.org, and she will see that your questions are answered.
