Proposal for Campustown's 5th luxury high-rise in 10 years raises eyebrows

Proposal for Campustown's 5th luxury high-rise in 10 years raises eyebrows

Plans by an out-of-state developer to build the fifth upscale student-housing high-rise of the decade have some wondering whether that's what Campustown needs.

"Nuts" was the first word that came to local preservationist Susan Appel's mind when she heard about the proposed 14-story, 218-unit luxury living project pegged for the northwest corner of John and Fourth streets.

The as-yet-unnamed project aims to bring sophistication to student housing in Campustown, said Ben Angelo, senior director at the Minneapolis-based Opus Development Co. It would join the 24-floor 309 Green Street, 18-floor HERE Champaign, 18-floor Burnham 310 and 14-floor Skyline Tower — all built after 2007 — in an ever-changing Campustown skyline unrecognizable to alumni who haven't been back in awhile.

The high-rise will sit on property created after the Alpha Delta Phi fraternity got permission in November from the Champaign City Council to split the lot of its local chapter's house at 310 E. John St., which has sat vacant since the chapter closed in 2015. It sold the north half to Opus for $7.52 million and plans to use the proceeds to build a new house on the south half of the lot and reopen its UI chapter.

Angelo declined to divulge the costs associated with the high-rise project — neither its overall price tag nor the rates monthly rent would run — saying only that what students are charged would be "competitive for the area."

University of Illinois senior Ivan Gallardo knows what that means.

He pays about $400 a month for housing and says most students he knows would not find anything above $700 to be affordable.

A poll of 17 students last week on campus found that 14 would be willing to pay between $400 and $600 per month — at most. Three questioned by The News-Gazette said they'd pay a rate comparable to what high-rise residences in Campustown currently charge — between $700 and $1,000 per student, per month.

"I don't think we need luxury student housing when as it is, it's so hard to find affordable housing near campus," Gallardo said. "It shows that developers care more about rich students, which is why they're getting the better location."

Appel takes it a step further.

"It's so obviously a ploy to get as much money as possible out of the students," she said. "If students are in the position that they can afford it, then by all means. But with the cost of school being so high, there have to be alternatives."

At neighboring luxury student high-rises, the per-student monthly price range is between $700 and $1,500 a month. At the more modern complexes, the low end is closer to $800.

With the college costing as much as it does — UI tuition alone this school year ranges from $12,036 (low end for in-state students) to $38,296 (high end for international students) — Appel called the rent rates at buildings similar Opus' "extreme."

"My house didn't cost that much when we bought it," she said.

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If they build it, will student renters come?

The lack of vacancies this school year at comparable high-rises suggests that the demand is still there for high-end, modern housing.

Skyline Tower, Burnham 310 and 309 Green Street — which have all been built in the past 10 years — were either fully leased or had just a few units available for the 2017-18 academic year.

And in 2018-19, 309 Green is already 100 percent pre-leased. Skyline (54 percent) and Burnham (28 percent) are still selling.

An older apartment complex — the 21-story Tower on Third, built in 1972 — has about 163 beds available now, and is 54 percent pre-leased for 2018-19. It offers amenities similar to those of its modern neighbors, but students say it's more comparable to some of the dorms on campus.

The UI's steady enrollment numbers convinced Opus and the Washington, D.C.-based Carlyle Group to partner up and build here, Angelo said. As the number of students rises, he pointed out, so will the demand for the type of housing his company offers.

And with "quality investors" pumping money into the area in recent years, and the proximity to Chicago, one of seven Midwestern cities where Opus has offices, Angelo is confident that "barring any catastrophic event," the development will be ready in time for 2019 Move-in Day.

Like other projects before it, planners say the Opus housing complex was fairly easy to put into motion, given the relaxed building regulations in the area.

"Nothing has been turned away," said Rob Kowalski, the assistant director of Champaign's planning and development department.

All the city asks of developers is that high-rises conform to the mainly cosmetic regulations for new builds that were put in place in the past two years as a way to establish a higher standard and still keep the micro-urban feel of Campustown intact.

Among the changes was a requirement that all new builds incorporate glass windows in at least 35 percent of every floor's facade. The city also amped up regulations for open spaces, as officials noticed developers were doing the bare minimum if left unchecked. And the requirement for a minimum number of parking spaces was taken away.

Opus officials still decided to designate the first two floors of its building for parking, proving Kowalski's prediction true — that developers will provide as much parking as they believe a building needs, with or without regulations by the city.

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Kowalski acknowledges concerns from those who've grown wary of having one high-rise after another sprout up, but offers assurance that new regulations guarantee that 24-floor 309 Green Street will remain the tallest building in town. The city now caps structures at 175 feet.

"A lot of times, what (people are) asking is 'Do we really need it? Don't we have enough housing?'" Kowalski said. "But the developer studies the market and knows whether or not it's a good decision. And they plan accordingly."

And for some students, the amenities and location make the cost worth it. Freshman Matthew McCarthy lives at home but said he'd gladly pay the price for an apartment on Green Street.

"It's the ideal place to live, right at the center of campus," he said. "I spend most of my time on Green Street, like a lot of people, and I think a lot of students would opt to live in a nicer place.

"I don't think they'll have trouble filling the place."

A tall order

Opus Development Co. would not divulge the costs of the yet-unnamed high-rise it plans to build in Campustown. But if it’s in line with the going monthly rates at similar student living structures, rent won’t be cheap. Here’s a look at the monthly bills of its competition, at the per-student rate:

Property Rent per person
309 Green $829 to $919
Burnham 310 $860 to $1,509
HERE Champaign $700 to $1,200
Tower on Third $719 to $769
Skyline Tower $900 to $1,499

And then there's ...

Living the luxurious life in Campustown can mean more than writing a big monthly check. Among the fees that could bump up the price:

➜ For a parking spot, an optional feature for residents of 309 Green Street, it costs $78 per month per vehicle.

➜ A south-facing apartment at Burnham 310 will run you an extra $20 per month. Add another $10 for a place on the 15th floor, $15 for the 16th, $20 for the 17th and $25 for the 18th.

➜ Tower on Third charges $40 to have an application processed. That’s $10 more than at HERE Champaign, where $100 is tacked on for any redecorating.

➜ Residents of Skyline Tower are charged an extra $13 a month to have their sewer and garbage covered.

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MahometMatt wrote on January 28, 2018 at 1:01 pm

This article doesn't give much rationale behind Ms. Appel characterization of the proposed development as "nuts."  She might well have elaborated, and it just did not make its way into the article.

So long as the proposal doesn't wipe more affordable options off the local campus housing map, it's almost all upsides.  The developer--with tens of millions of dollars at stake--has done the market research to have confidence that the project will be financially viable.  Even at more than 200 new housing units at a time, this would house fewer than one-half of one percent of the UI's student population.  So the question is not whether it's mainstream affordable for college students, but whether there's a market that will attract the money of an affluent 1/2 of one percent.

If the answer is yes, then consider the trickle-down effect.  It should ease demand for housing options that sit below this in the marketplace, which may mean that students of more modest means will either have more affodable options, or may find it easier to snag options closer to campus once these 218 additional housing units are in the market.

The proposed location appears to have a Greek house (and I don't know if it is  operating or not) on it, so if built, the new building would remove just a handful of existing beds from the market.

If the proposal involved tearing down any historic landmarks or plopping this into a much lower density neighborhood, then there would be a debate and/or applications for zoning variances.  Instead, this proposal puts a high rise literally next door to an existing 21-story building.  Tower on Third, because its parking structure is separate from the building, has virtually no green space at all.  The new building appears to be a model of building more housing units and parking into a footpring that will preserve more green space and have a more attractive setback and a lower overall height than the 40+ year-old building next door.

Finally, this infuses tens of millions of dollars of capital into the local economy, which is hugely beneficial to just about everyone who lives and works in the area.

rsp wrote on January 29, 2018 at 2:01 pm

When someone comes in and raises the price of rent everyone else raises their prices accordingly. That's one of the prblems with these "luxury" high-rises. And to assume the capital will be infused into the local economy is assuming a lot. It's quite possible that every worker and building crew will come from outside the area, along with all the equipment they need as that money trickles away. It isn't even a local owner. So even the profits from there will go out of state.

What you missed from skimming the story is that the Greek house was demo'd, then the lot was split, and it will be rebuilt on one half the property and this building on the other half.

catsrule wrote on January 29, 2018 at 9:01 am

MahometMatt, well stated.   The city council should be taken to task for agreeing to pass a city ordinance limiting building height to 175ft.  This imposition is contrary to market place demand as depicted in surveys of prospective customers and the success of the newer high-rises as witnessed by their occupancy rates.   The city planning staff provided deliberately misleading testimony in support of its bias against taller buildings, one example of record being to create a disincentive for the use of stilts inconstruction.   One city planner testified that the 175 foot limit “seemed right” in a very subjective manner with no objective justification or definition of what “right” is.   The survey submitted to the public for comment pertaining to the ordinance was written in a manner to support the bias of planning staff albeit the response rate was so minimal that the  results cannot be generalized.  A progressive and growing city like Champaign deserves and can support a 30+ floor tower. 

rsp wrote on January 29, 2018 at 2:01 pm

That has to do with what kind of city we want to live in. Of course it's subjective. Look at different cities and you will see different decisions made, for good or for bad. Putting skyscrapers in the middle of campus just because we can just doesn't fit with this city.