The Housing Initiative Clinic recently closed two transactions in a single week. The first project was the acquisition and rehabilitation of an eight-unit building in the South Chicago neighborhood area. The building, having gone through foreclosure and been vacated of tenants, had been purchased and mothballed by the City of Chicago. A local community development organization, Claretian Associates Inc., reached agreement with the City on a purchase and rehab proposal, and Claretian Associates retained the Housing Initiative to help them structure the transaction and bring it to fruition. Housing Initiative students Jeremy Press ’12 and Irene Paik ’12, with supervision from Clinical Professor Jeff Leslie, worked on the transaction throughout fall quarter and handled the closing. Press and Paik negotiated the purchase and sale contract; drafted the construction contract, architect agreement, management contract, trust documents, counsel’s opinion, and various other evidentiaries; and negotiated the loan documents prepared by the project’s two lenders. Financing was provided by the City of Chicago’s Neighborhood Stabilization Program and by the Community Investment Corporation, a non-profit lender that specializes in multifamily residential buildings.
“Seeing a transaction like this through, from beginning to end, is a great learning opportunity,” said Paik. “The deal structure for these City-sponsored rehabs is quite complex, with the private lender essentially bridging the City funds that provide the bulk of the rehab and permanent financing. It definitely required a team effort to keep track of all the moving parts and to bring everything together on time for the closing.”
The second project for the Housing Intiative was the acquisition of a mixed use building in the West Humboldt Park neighborhood on behalf of the West Humboldt Park Family and Community Development Council. A restaurant will occupy the first floor, with a residential unit above. The lender on the project needed an accelerated closing to meet its targets under the federal New Markets Tax Credit program, resulting in a very compressed drafting, review and closing schedule. Clinic student Vicky Ortuondo ’13, worked on the purchase and sale agreement for the acquisition and will continue on to work on the lease-up of the project when the rehab is complete.