If you’re a Chicagoan and haven’t seen this wonderful little film yet, you need to. It makes Chicago feel so romantic. I for one let these scenes pass before me everyday and don’t acknowledge how beautiful and special the city, its landscapes, and its people are.

Luxury Real Estate

Despite speculation that the luxury residential market in the city of Chicago, $1,000,000+, will experience a slight down-turn as consumers sit-back and wait to see what happens with the stock market, the statistics paint a different picture. This information was taken from the Multiple Listing Service showcasing that the first-half of June could turn-out to be an equally strong month for luxury sales despite the ups-and-downs of the S&P, NASDAQ and DOW.

Statistics Show an Upswing

JANUARY — 39 Properties went under contract – 34 have closed so far
FEBRUARY — 43 Properties went under contract – 32 have closed so far
MARCH — 79 Properties went under contract – 63 have closed so far
APRIL — 50 Properties went under contract – 30 deals have closed so far
MAY — 64 Properties went under contract – 21 deals have closed so far
JUNE – 34 Properties went under contract

Consumers Still Participating

With interest rates still historically low and opportunities to purchase a luxury home at what we hope is the “bottom of the market,” consumers have the confidence to continue participating in this real estate marketplace.

We would like to thank Antoine Nicholas for sharing today’s photo via the Creative Commons License.

The Spire

Garrett Kelleher, the Irish developer who was the visionary for Chicago?s proposed newest landmark, the 150-story Spire, is now being sued by Bank of America for $110,000 in unpaid credit card bills related to the stalled construction project. Allegations have been added to a lawsuit filed in August by Bank of America to recover an additional $4,900,000 lent to Shelbourne Development, Kelleher?s development company. Kelleher personally guaranteed two credit cards issued by Bank of America in 2006 and 2007.

The Spire Developer Defaults on Loans

Additionally, in December 2006 Bank of America provided Shelbourne with $3,000,000 in the form of a revolving line of credit for the project, designed by the world renowned Spanish architect Santiago Calatrava. In June 2007, the bank extended a $7,000,000 term loan to Shelbourne for the Spire, the terms of which were later amended to give the developer until November 2008 to line up a syndicate of investors to provide construction financing for the project. Shelbourne missing the deadline and defaulted on the above loans as the real estate market cooled and capital markets froze.

Landmark Single Family is on the Market

In April 2006 Kelleher bought a 1912 Arthur Heun designed Georgian with Palladian windows at 1416 N Astor Street for $8.5MM. The personal residence has 5 bedrooms, 6 ½ baths and sits on a 75 x 110 lot with English garden and 4 car garage. The property is now on the market for $20 million, and rumor has it that Kelleher is moving back to Ireland.

Old, but Loved, Parking Meters

While the national economy has been on everyone’s mind for a very long time now, recently I have been wondering about the health of the local Chicago economy. Specifically, I have been contemplating the trickle-down effect the new parking meter system has on local businesses.

Last year Mayor Daley made the controversial decision to privatize the parking meters in the city. In a matter of 48-hours he rammed his decision through City Hall and sold the rights to Morgan Stanley Communications and Chicago Parking Meteres LLC. With the new system, Morgan Stanley is allowed to keep all revenue generated from the meter machines, while the city keeps the revenue generated from tickets issued to vehicles with expired tickets.

What Impact Do the Meters Have on the Economy?

Here is where the larger state of the City’s economy comes in to question. While driving around Chicago yesterday I decided it would be nice to have a hot latte from Starbucks. I pulled up outside, and luckily, I found a spot right in front of the store. I then realized the parking meter pay kiosk was halfway down the block. I sat in my car for a second and thought, “if this were the old days, I could throw a quarter in a meter run in and I would have my wonderful hot latte in my hands.” The walk to the meter in the cold weather led me to pull away without my hot latte.

I then began wondering how Starbucks would feel knowing they missed out on a sale due to the fact that the parking meter station was too far away from their establishment. And, I wondered how many sales they miss on a daily basis due to this setup. To take it further, I started asking friends and colleagues if they make shopping decisions based on the meter situation. I found a resounding “yes.” One person stated that she will go out of her way to avoid the Walgreen’s with no parking lot and find a store that has free parking. I also repeatedly heard people say they avoid carry-out restaurants without a drive-through or a loading zone. I used to park at a meter right outside my office. I was happy to run out and feed my meter every couple of hours. It only cost me $1.00 for one hour of parking. Now, because the pay kiosk is almost half way down the block, I will drive around to find free parking within the neighborhood. Again, the parking revenue is lost.

The Small Loses May Add Up

If you add up a simple latte from Starbucks and multiply that by the number of people that avoid the meter, that number could be astounding. Small businesses must be thrilled. I would like to see a “before and after” analysis of the revenue to the City, including all costs. I would also like to ask small business owners their feelings, but I am confident I can predict their response!

We?d like to that Swanksalot for kindly sharing today?s photo via the Creative Common?s License.

11 November 2009 ? The Three Arts Building located at 1300 N. Dearborn may be turned into what some are calling the Midwest?s largest columbarium.  Don?t? have a dictionary handy? This columbarium will have enough space to store the ashes of up to 15,000 dearly departed residents. Built in the early 1900?s, and designated a Chicago landmark in 1981, this four story building was designed by architect Jim Holabird and features a Byzantine-style entrance, beautiful ornate mosaics and a central courtyard. Back in the day, it served as a residence for young woman studying music, drama and painting. For between $1,000 and $10,000, the dearly departed can spend eternity in Chicago?s most expensive neighborhood. That may seem like a lot of money for a cubby hole, but compared to Bill Wrigley Jr?s 13,200 square foot penthouse around the corner at 65 E. Goethe, listed for $14 million, maybe it?s not so bad after all! Creepy? Yeah! Inappropriate? Maybe. But, don?t get too worked up just yet. Although this type of use is permitted by zoning, any changes to a Landmark building must be approved by the city. So there is a chance these uber-quiet neighbors may spend eternity elsewhere.

For the last several months I have been writing for the Chicago 77 Real Estate Blog. The title came from the 77 communities that make up the City. Some of my posts have been brief market updates and other longer and more substantive. In thinking of a new post to write, I realized I had not actually written any specifically about these 77 communities. Today is my first. I am starting with number 77, the Edgewater area. What really makes up the character and the sustainability of Chicago is its neighborhoods. That is why I have decided to start writing about them.

A Neighborhood of Many Communities

Edgewater has one of Chicago?s greatest treasures of its park and lakefront on the East, north to south from Devon Avenue to Foster Ravenswood to its West. Growing up in Chicago I learned all neighborhoods have pocket communities. Growing up a North sider, I learned those of the Edgewater area early on. Some center around its churches and schools and for Andersonville it has always been its strong retail corridor of Clark Street. Long ago a strong Swedish community, there are still a few restaurants left but the streets are now filled with a large variety of restaurants and many other retail shops making Andersonville a destination place. At the very North end is everyone?s favorite place to roam, Gethsemane Garden Center.

One of the sustaining factors of the greater neighborhood are residential areas of single family homes. Their residents take great pride in identifying themselves with homey names like Edgewater Glen, Lakewood-Balmoral and Magnolia Glen. These areas are where you find many of Chicago?s traditional ?American 4 Square? homes, some on the larger than typically 125 x 25 city lot.

Over the years most of the mansions on Sheridan Road have been replaced by high rises skirting the North side beaches. One building that has been there since 1929 is what most people who go through the city using Lake Shore Drive refer to as the ?Pink? building, the Landmark Edgewater Beach Apartments, a coop since the 1950?s. These grand apartments have been home to some of the most famous Chicagoans.

To further explore the history visit the Edgewater Historical Society.

We’d like to thank John Picken for sharing today’s photo via the Creative Common’s License.

While attending the recent SPARKt conference I had the pleasure of listening to Adrian Holovaty, the founder of EveryBlock.com explain his unique service. If you haven’t heard of it, I suggest you head over their right away and sign up. It’s amazing.

What is EveryBlock?

EveryBlock.com is an amazing service.

EveryBlock.com is a service that goes out onto the web and looks for information about your block and the surrounding area?up to four blocks around your block. It looks for lots of stuff:

• Homes for sale
• Closings
• Crimes
• Pictures people are taking in the area
• News
• Building permits
• Liquor license applications
• Reviews of local businesses
• Street closures
• Restaurant inspections (do you really want to know?)
• Lost and Found
• And more…

I get a daily email from EveryBlock.com telling me all the comings and goings in my neighborhood.

Now, given the city we live in…what is most amazing about this is that Adrian was able to get this data out of the notoriously tight-lipped City of Chicago. The city didn’t want to give up the crime data, but Adrian persisted and got it for all of us. The problem is that it’s delayed by over a week and is often very, very vague. They have an online petition for you to sign asking the city to give more details on the crimes so we know what is really going on. Please sign it!

It’s a great service and I highly recommend it…except for the restaurant inspections. Those just make me sad.

I just read a fantastic article on Forbes about a topic that I have been wondering a lot about: continued gentrification of Chicago as the recession drags on. I have been pessimistic about the chances that neighborhoods like Uptown would continue to renew and rebuild…be a magnet for the middle class. However, after reading this interview with Pat Lashinsky of Zipreality.com, Michael Feder of Radar Logic, Spencer Rascoff of Zillow.com, and Peter Slatin of Real Capital Analytics, I’m beginning to think my pessimism may have been misplaced. At least I hope it was and their optimism is correct.

People Want to Live Close to Work

Will Uptown's revival continue or falter?

The first point for optimism is, as Mr. Lashinsky pointed out, that people want to live as close to work as is possible. It seems to me that two facts are going to keep this trend going: First, is the cost of energy: with gas going up to over $3.00 a gallon in the past couple of weeks, and very little long-term chance that the 30 mile commutes will ever be as economically feasible as they were when gas was $1.00 a gallon, this trend is likely to not reverse any time soon. The second fact is that Chicago is a gorgeous place to live now. The gentrification that has happened in Chicago has made it not only possible, but down right attractive to live in the city for nearly everyone.

Of course, the Loop is not the only area in Chicagoland with jobs. The suburbs lay claim to some of the area’s largest employers; some of my friends actually reverse commute from the central part of the city to the far flung suburbs. However, when young people move to Chicago looking for work, they aren’t dreaming of living in a generic box behind another generic box off a cul-de-sac in a faceless suburban sprawl. They are dreaming of brownstones, high rises, and walking down bustling sidewalks to meet friends at sidewalk cafes. This is going to mean that much of the young talent is going to be located in the city. Hopefully this means that new upstart companies, as well as the Fortune 500, will continue to want to call Chicago home and the upward spiral will continue. But, if the job losses continue and young people continue to give up on their dreams of big-city life (as the rental data is hinting at) in order to return to live with their parents outside of the city, this force for renewal and growth will be gone.

Price Is Relative

As someone who grew up in Montana and South Dakota and then having spent ten years living in Tokyo, I have experienced both ends of the price-per-square-foot continuum. While living in Tokyo I didn’t think twice about spending $2,500 a month for our tiny one-bedroom apartment?a price that could have allowed me a five bed, five bath, four-car garage with a pool in my hometown. But I wanted to live in Tokyo and my income allowed us to live very comfortably even with that rent. Actually, I’ve never had more disposable income than when I was paying the most for a home I ever have.

People understand this. They know that relatively speaking, right now is an amazing time to buy. Mortgage rates are at historic lows and prices are bottoming out at RELATIVELY amazing prices. As Mr. Slatin put it in the article, “The concept of a ‘great’ deal remains relative, and isn’t that what pricing is all about?”

The bottom line is for many people, the cost-to-performance of living in central Chicago is still very low. This is going to mean that the demand for homes is going to remain and gentrification of neighborhoods is likely going to continue, but undoubtedly at a slower pace.

Slow Gentrification is Still Progress…Gains Will Hold

Mr. Slatin had a wonderful quote in this article in response to discussion about Bucktown and The Westloop,

While there will surely be regression in some newly gentrified neighborhoods, for the most part, gains will hold. Residents, investors, retailers, etc. will fight to keep areas moving up or at least flat. Where holes do develop–and they will–investors will buy up REO. There’s still plenty of life and enticement in most of these neighborhoods, and emptied out tracts are far less alluring.

The other panelists agreed with him, but made sure to say that the progress we have seen in the past years will slow. The coffee shops, restaurants, and boutiques going into the new areas of town may not survive, but eventually they will find the dollars they need to help transform the neighborhoods.

Chicago City Gov’t Has to Continue to Support the Growth of the Middle Class

Again, Mr. Slatin pointed out a large potential danger to the whole upward, albeit slow, spiral, “One danger to these neighborhoods remains the inability of local governments to support their growth through schools, green space, transit, etc.”

As I talk to my circle of friends, this is completely true. One of the main reasons we are all still in the city is that there are fantastic public elementary schools for our children to attend. But ask these people who have eschewed the suburbs for the convenience and vibrancy of the city what they are worried about and they all reply that there are not enough good high schools to accept all the fantastic kids coming out of the elementary schools. Their parents stayed and took a chance on CPS, and under Arnie Duncan they by-and-large have delivered. However, can we count on a Dailey insider who has never run a school let along a school system to continue this and deliver high schools that will prepare our children for college? I hope my concern is unfounded.

But of course it’s not only about schools: potholes that gobble up trucks, the crumbling supports for the Metra and I-90 we all pass by every day hoping the whole thing doen’t come down on us like it did in Minneapolis, and reductions in police to protect the city area all trends that have to somehow be reversed.

As Always, It’s All About Supply and Demand

The Forbes interviewer for the story was the prolific Chicagoan Stephane Fitch, who is apparently my not-so-far-away neighbor. He talked about his neighborhood of Uptown.

…I live in Chicago’s Uptown neighborhood. Still, lots of gentrification needed in Uptown, I think it’s fair to say. It’s the classic gentrification play. But none of my neighbors thinks the gentrification will continue where I live. Not with the nicer neighborhood just to my south, called Lakeview, looking more nearly affordable for modestly well-off professionals.

That sums it up…if the jobs stay, people will want to live in this beautiful, livable city and that will mean more jobs and continued renewal of amazing swaths of this amazing city we call home. If the spiral doesn’t continue up or at least stay flat, Lakeview will prevent Uptown from improving, and eventually Lincoln Park will begin to nibble away at Lakeview, and on down we will go.

I’m optimistic and think (hope) we will continue to improve upon what is already here.

We would like to thank Supafly for sharing today’s photo of Uptown via the Creative Commons License.

Steven Good

Today Sheldon Good & Company filed for Chapter 11 bankruptcy protection. In a statement the company said it is, ?reorganizing to remedy the effects of improper actions taken by its former chairman. These improprieties, which left the company with a shortage of reserves in the face of the current economic downturn, came to light following his death in January 2009.?

Alan R. Kravets, Sheldon Good President, said that past President Steven Good had, without permission, “withdrawn substantial monies from the (company’s) operating accounts, calling it compensation.” On Jan. 5 of this year, Steven Good apparently committed suicide.

According to Mr. Kravets, Sheldon Good has $250,000 in assets and $4 million in liabilities. Heidi Sorvino, a bankruptcy attorney representing Sheldon Good has said that they believe Steven Good is responsible for for the disappearance of millions of dollars, but they haven’t quantified it as of yet.

In his statement Mr. Kravets said, “While operating under Chapter 11 protection, Sheldon Good & Co. will maintain and honor all of its commitments to our customers without interruption,” He added, “We believe this filing will allow us to make necessary changes to our capital structure in order to operate efficiently.?

Earth Day

This is the 40th anniversary of Earth Day! Now more than ever we need to take a moment to think about what it means and why we have a day dedicated for it. Holidays and observances are saved for the truly significant and this is no exception.

Take part in Earth Day and think about incorporating a new daily habit into your lifestyle. It’s not hard – here are some ideas from Chicago Climate Action Plan that will put money back in your pocket!

[TABLE=6]

Being a member of The Sierra Club has shown me many ways to make simple changes.

Lastly, PLEASE, PLEASE, PLEASE take 20 minutes to watch this very informative video by Annie Leonard, THE STORY OF STUFF. If this is the ONE THING you do as part of Earth Day, then you’ve done a great deal!!! Half of change is knowledge!

Simple Changes That Can Make a Difference (Click to Enlarge)

If you don’t have 20 minutes, then here’s a quick fact sheet from the video?and NO, it can’t be absorbed by osmosis!

What can you do to help? After all, we ALL play a part in our past, present and future!

Happy Earth Day!

* Based on overall area average heating and air conditioning use. Individual results will vary.
** Assumes vehicle drive 12,500 miles annually.
*** Assumes replacing a 150 W bulb for 8 hours every night for 365 days with a solar powered light.
**** Assumes baseline of average Chicago vehicle travel of 9,138.07 miles.