ULI Chicago and the National Trust for Historic Preservation have released a summary of recommendations for the market-driven reuse of vacant and underused properties throughout Chicago’s neighborhoods. The executive summary of Building on Chicago’s Strengths: The Partnership for Building Reuse makes the case for the adaptive use of older, smaller buildings as stronger performers on job creation and energy efficiency than newer structures, and identifies barriers—some regulatory, some market-based—to a wider reuse of the city’s historic building stock.

Roughly half of Chicago’s estimated 500,000 buildings were built in 1926 or earlier; 63 percent are considered prewar or built before 1945, according to the executive summary. ULI Chicago will release the full report in June.

ULI Chicago’s work is the fourth partnership with a ULI district council that the National Trust has engaged in as part of its broader Partnership for Building Reuse. In addition to ULI Chicago, the National Trust has collaborated with ULI Los Angeles, ULI Philadelphia, and ULI Baltimore on city-specific recommendations for and barriers to the adaptive use of older and underused properties that are a vital element of each city’s urban fabric and unique character.

“As a real estate developer in the city of Chicago, one of the most important assets we have to work with is our existing building infrastructure,” said Will Tippens, vice president, Related Midwest, and a member of the ULI Chicago building reuse committee that oversaw the project. “We have so many great buildings and great neighborhoods that can be developed quickly by the reuse of buildings. For all of us in the development community, finding better, faster, more streamlined ways to get our buildings back into economic production, the better off we are.”

In Chicago, small businesses are thriving in older, smaller buildings, particularly in areas north of the Loop, the city’s main commercial area. Yet hundreds of properties in neighborhoods especially to the south and west remain vacant and are declining in value that have enormous potential for reuse, according to the report.

Panelists at the launch of the ULI Chicago/National Trust for Historic Preservation report included, from left: Mike Powe of the National Trust’s Preservation Green Lab; Jim Lindberg of Preservation Green Lab; Will Tippens, Related Midwest; and, Paul Shadle, DLA Piper. (Photo courtesy of 1871)

“The building reuse project is different than historic preservation,” said Alicia Berg, committee chair and assistant vice president, campus planning and sustainability, at the University of Chicago. “The older buildings tend to be more affordable for new businesses, so they are starting up new businesses in older buildings at a higher rate than [in] new buildings. Similarly, the funky restaurants, the interesting not-for-profits are present . . . at a much higher rate. So there is a lot of character and economic vitality that comes from reusing these older buildings.”

Based on data from the city of Chicago, the report found that job creation in new businesses in the city’s older, smaller buildings is occurring twice as fast than it is in newer, larger buildings.  Forty-five percent of jobs in older, smaller buildings are in small businesses and 7 percent of these jobs were created over the previous year. In newer, larger buildings, 33 percent of jobs are in small business, but only 4 percent of these jobs were created over the previous year, the report says. The report identifies new and small businesses as “critical for growing Chicago’s economy.”

“What we are talking about are the bread-and-butter buildings that create Chicago’s neighborhoods,” Berg said. “We’re really talking [about] using the bones and character of these buildings and enlivening them with new economic uses.”

On energy efficiency, the report found that residential blocks with older, smaller buildings and mixed-vintage stock used roughly 12 percent less energy per square foot than blocks with newer and larger buildings.

Over the past year, ULI Chicago has convened more than 80 community development and land use professionals, historic preservation advocates, green building experts, and city staff to identify barriers to wider adaptive use, develop concrete remedies to the problem, and create a plan for implementation. The report identifies the following as barriers when pursuing such projects: restrictive zoning, parking requirements, weak market conditions, a challenging financing environment for reuse projects, and the complexity and cost of meeting building and energy codes. Specific recommendations for removing these barriers and returning older properties to productive use include the following:

• Develop adaptive use policies within the Chicago zoning code;
• Reduce parking requirements for adaptive use projects;
• Apply Chicago’s building code in a more flexible manner;
• Support community developers, nonprofit developers, and small-scale developers as they pursue adaptive use projects; and
• Strengthen financial incentives and develop new financing tools to encourage building reuse.

ULI members who served on the building reuse committee are eager to take action on these recommendations. In addition to being a convener of experts, “ULI is also an implementer,” said Paul Shadle, partner at DLA Piper and ULI Chicago building reuse committee member. “Our hope is that the best policies . . . will be implemented by government, the market, consultants, and residents of the communities.”

According to Shadle, the committee intends to work with the city of Chicago to 1) identify pilot neighborhoods; 2) convene task forces to implement some of the mechanisms identified in the report that promote building reuse; and 3) create a review process to regularly assess the quality of the mechanisms for adaptive use and to implement those that work best.

To learn more about the ULI Chicago/National Trust for Historic Preservation Building Reuse Initiative, go to http://chicago.uli.org/uli-in-the-community/partnership-building-reuse/.