This letter is to correct numerous inaccuracies that Alderman Baker presented in his 8-18-15 Letter to the Editor. The issue in front of the DeKalb City Council is whether to rezone University Village to maintain occupancy at the current level in the event of a catastrophic incident. Should more than 50% of the property be destroyed, new ownership would not be allowed to rebuild at the current density. This would result in the loss of 178 households and permanently displace hundreds of residents.
Ald. Baker falsely accuses ownership of milking the project and falsely estimates that ownership is netting between $3,500,000 to $4,000,000 per year. These numbers are drastically overestimated. In fact, University Village is a limited dividend return property, which strictly limits the amount of funds annually which can be distributed to owners. Historically, distributions have been substantially less than permitted, due to funds being spent on repairs, maintenance, and capital improvements. Within the past ten years, University Village has reinvested over $5,000,000 in capital improvements, including but not limited to security cameras, exterior lighting, new roofs, new siding on about 75% of the buildings, new balconies, new windows, sidewalks, concrete replacement and landscaping. In addition, repairs and maintenance has substantially exceeded that $5,000,000 amount.
Ald. Baker characterized the property as run down and ownership as slum lords and implied that ownership has no incentive to maintain the property. That couldn’t be further from the truth. Aside from our pride, integrity and fiduciary duty to our partners and responsibility to our residents, University Village is required to maintain the property as decent, safe, and sanitary housing. To ensure this, there are annual U.S. Department of Housing and Urban Development (HUD) and Illinois Housing Development Authority (IHDA) inspections, which include occupied and vacant units, common areas, and the exterior of the buildings and grounds. In addition, University Village is required to conduct an annual inspection on all of the units so that we can insure that our residents are living in an acceptable environment. If any issues are revealed during those inspections they are immediately addressed. For over forty years, the results of the annual inspections have consistently met or exceeded HUD and IHDA requirements. We would be happy to provide further proof that this property is well run and maintained by having HUD or IHDA verify that this is one of the best run and maintained properties in the country. University Village residents take pride in their homes and their community. How offensive to these residents to be addressed as “stuck living in squalor.”
Ald. Baker stated that ownership would exchange the property using a 1031 exchange program. This is not true. Many of our partners are middle-aged or elderly and not interested in further real estate investments. Ald. Baker stated that the owners would not pay taxes on the sale. This is patently false. The fact that people from outside the community are interested in making a significant investment in DeKalb benefits everyone and only increases the value of other properties.
An additional misconception is that University Village can be torn down and rebuilt as a market rate community or converted to market units. Agreements with HUD require this property to remain affordable housing for the long term. The community and City Council members would benefit greatly from embracing this reality. Based on all the facts, the best alternative for the City of DeKalb is to pass this zoning change. As the current owner, we will continue to reinvest and maintain this property. However, the City of DeKalb has negotiated extensive improvements with Security Properties, well beyond that which our partnership would be required to do.
Our investment group faced a similar issue on our University Plaza development, with the same advocacy groups expressing negativity towards what was eventually approved. Wanting to divest ourselves of the property, we sought out the best group to bring the property into present times and the work that has been nearly completed has transformed a tired, stagnant property into a Class A facility. In fact, University Plaza is 100% leased, with a waiting list for the current school year. This is the same process which we followed in our search for the appropriate purchaser for University Village.
We wanted to find someone that fully understood the complexities of the requirements of HUD, IHDA and the existing financing and regulatory requirements and had showed a significant history of transitioning affordable housing developments into thriving communities. Security Properties is an expert in affordable housing with years of experience. Let them do what they do best and rehabilitate and renovate this property by investing millions of dollars into state-of-the-art fire protection systems, making this property 100% ADA compliant, renovating the individual unit interiors with new appliances, kitchens and bathrooms, greatly expanding the community center to include, among many improvements, a resource room and resident computer lab, enhancements to the site security camera system, adding two playgrounds to enhance the site amenity package, significant investment into the building envelopes and exteriors, and an overhaul of the mechanical systems including water heaters and HVAC condensers.
We urge you to understand the truth and the facts when formulating an opinion and not be influenced by inaccuracies, rumors and gross misrepresentations. We are happy to set the record straight and would be willing to talk with anyone who feels that they need more information or clarification.
University Village, A Limited Partnership
University Village III, A limited Partnership
Jeffrey D. Crane
Editor’s Note: This letter to the editor was submitted via from our Contact Us form.