UIUC HEEF 2016 Proposal

Development Team: Ben Skinner, Ines Andrade, Nick Bartholomew, Ryan Hamrick, Eliseo Elizarraraz, Austin Pye Executive ...

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Development Team: Ben Skinner, Ines Andrade, Nick Bartholomew, Ryan Hamrick, Eliseo Elizarraraz, Austin Pye

Executive Summary

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Station at 63rd is a real estate development located on the former Englewood Mall site in the Englewood neighborhood of Chicago, IL (Halsted & 63rd). The vision behind Station at 63rd is to help build a stronger community and a higher quality lifestyle by providing an environment which includes entertainment, commerce, and quality of living. Overall this development will incorporate diverse retail offerings, an abundance of community space, and numerous mixed-income residential units. We are proposing two mixed-use structures totaling approximately 245,000 Square feet, and the renovation of the historic firehouse situated in the middle of the site which totals approximately 5,000 square feet. Our initial ideas and thoughts revolved around the idea that to transform a neighborhood, we must first provide a foundation for an economy to grow from, which is why we chose to place a large focus on perfecting our community center, community gym, and The Center for the Arts and Education at Station at 63rd. Our retail target market is affordable options that are either prominent on the South Side of Chicago, or that fill a void which has historically been ignored in the Englewood neighborhood. For this development we focused on bringing and creating heat throughout the neighborhood, which will be done by creating plenty of open green space on the ground and on terraces above, as well as bringing color to the neighborhood through a series of collaborative art mural walls spread throughout Station at 63rd. By creating an increase in quality of life, and aesthetic value, we in turn believe that we will be creating a long term increase in property value as all age groups making up the entire neighborhood will be positively impacted for years to come. Most importantly, this project is financially feasible as it generates an IRR of nearly thirty percent. To help accomplish this we built an extremely creative capital structure that consists of debt, equity, and numerous public incentives that both directly assist with the construction costs, and the installation of a business development center and small business improvement fund. In the following proposal, we present in-depth our market research, demographic analysis, an intensive development plan and strategy, sustainability efforts, financial analysis, and a creative marketing, advertising, and public relations strategy.

Site Analysis

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The proposed development site, formerly the location of “Englewood Mall”, contains three parcels of land referred to later as Lots A, B and D. Together, these parcels curve around the North and West sides of an existing development named “Englewood Square”. Structural challenges to the development include the presence of two water detention systems and the façade of a historical firehouse that must remain in its original state. To overcome these challenges, we propose repurposing the Firehouse as a community center, and building up to the elevated detention systems to create open spaces cohesive to our development. The parcels of land provided currently yield limited foot and vehicle traffic. Therefore, retailers at this site must be delicately selected in a way that simultaneously creates a destination and services the needs of the community. Englewood is made up of a rich blend of cultures that truly embody Chicago. An economic downturn in the neighborhood has created hurdles for this development. However, what the area lacks in riches is overcome by an abundance of historical and cultural relevance. To attract residents, the site must provide a direct opportunity to grow with Englewood. Station at 63 rd’s focus on community development will compel both residents and visitors to be a part of this neighborhood’s future.

Demographics Analysis

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In order to better understand the demographics of the community surrounding the site, the development team decided to analyze the neighborhood within a 1.25 mile walk of the site, assuming the individual walks on established right of ways. This distance corresponds to a 20 minute walk for a typical individual, which the development team determined would be the area most impacted by the development. For the purpose of this report, this area is referred to as the Surrounding Neighborhood. Defining the area by walking distance ensures that all individuals within the neighborhood have access to the site. A map showing the area encompassed within this local demographic area can be found in below in the exhibit titled Surrounding Neighborhood Map. The development team compared the demographics within this area to the he demographics of the Englewood Community Area, as well as the City of Chicago as a whole. Included below are but a small sample of those examined by the development team, but were the most influential in the decision making process of how to develop the property. Population Density The population density of the surrounding neighborhood lags behind 15,000 the Englewood Community Area as well as the City of Chicago as a 10,000 whole. Much of this has to do with the low quantity of high unit count buildings located within the region, as just 10% of the 5,000 0 population lives in buildings with 50 or more residential units. Thus, this development should strive to increase density, which would improve the viability of local businesses and attract more investment to the area.

Single Parent Families (% of Total Families)

100% 80% 60% 40% 20% 0%

Age and Sex While many of the age and sex demographics within the surrounding neighborhood appeared too similar to many Chicago communities, there was a significant increase in the amount of single parent households within the neighborhood. Thus, our team felt that this development should include some aspect(s) which could assist single parent families in providing and caring for their families.

Unemployment The unemployment rate in the surrounding neighborhood is nearly three times the City-wide rate. Further research led the development team to the conclusion that the local economy lacks enough employment opportunities for the residents of the neighborhood. Thus a high priority of the development team was to create employment dense land uses, so as to create an environment with employment opportunities for local citizens.

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Median Household Income ($1,000's)

25 0

Surrounding Englewood City of Chicago Neighborhood Community Area

People per Mi2

40% 30% 20% 10% 0%

Unemployment Rate

Median Household Income Median incomes within the community are less than half of those within the Chicago area. This highlights the lack of well-paying employment opportunities as well as a population that may lack important workforce skills. As a result, this development sought to create a significant number of high-paying jobs for local residents, as well as set up a job training and workforce development program to aid community members in finding well-paying jobs.

0.4

Percent of the Population with a Bachelor's Degree

0.2 0

Educational Attainment The quantity of highly educated individuals within the surrounding neighborhood as well as the Englewood Community Area lags well behind the City of Chicago as a whole. This education gap presented the development team with an opportunity to create or expand nontraditional educational opportunities for members of the community, as well as explore a strategic partnership with the local community college.

Crime Rate Both Englewood and the area surrounding the project have some of the highest crime rates in the country. This made the security of the project a top priority, but the development team also wanted to explore ways that this development could help to reduce crime in the community and provide a safer space for residents and visitors alike.

9,000

Crimes per Mi2

6,000 3,000

0

Median Housing Age

Housing Age Much of the housing within the community was constructed during the 75 1940’s when the region was one of the economic centers of the Chicago 70 region. A significant portion of these homes are presently unsafe and many are uninhabitable, yet still contain residents who are unable to 65 afford better living conditions. Thus, the development team felt that providing a significant amount of affordable housing was a core requirement of this project. Renters as a % of Total Rent/Own Households More than seven in ten homes in the surrounding community and the 80% Englewood area are inhabited by renters. The development not only saw this as an opportunity to serve the present needs of the community, 60% but also provide a center for community life in a constantly evolving 40% community. 20% 80

1.2 1 0.8 0.6 0.4 0.2 0

Cars per Household

0%

Transportation The community had one of the lowest car ownership rates in the city, with less than one car per household. The development team saw this as an opportunity to prioritize active transportation and mass transit within the community, without the need to provide significant automotive infrastructure.

Zoning and Entitlements

For sites A and D, the research team elected to seek a modification of the established zoning classification from C2-1 to a C3-1. The rationale for this change centers on the City’s recently enacted Transit Oriented Development legislation (TOD). This modification of the Zoning Code allows for developers to increase the FAR of their projects and reduce the amount of automobile parking required on the site, in exchange for an increase in the number of affordable units and bicycle parking required on the site. On this site, the development team’s examination of the zoning code revealed that without the reduction in parking provided by the TOD ordinance, it would be difficult to construct a project which was able to provide all of the desired community benefits while also being financially feasible. However, by taking advantage of components of the TOD ordinance, the development could reduce the amount of required parking required from more than 300 spaces to only 195. While some additional review would be required to permit the location of spaces serving site D on site B, the development team feels that this would be permissible since the spaces are located within 600 feet of site D, per the requirements outlined in Chicago Ordinance 17-10-0603-A. Additionally, both sites far exceed the quantity of affordable housing required on the sites to qualify for a change in zoning. Site B would remain zoned C2-1, since the proposed community center is able to be constructed without modifying the zoning of the parcel. All proposed uses outlined in the development strategies are permitted by right within the modified zoning classifications. .

Sites A and D make prime candidates for transit oriented development because of their proximity to transit and necessary amenities, as well as the low rate of car ownership within the neighborhood and the low population in the area surrounding the 63rd and Halsted “L” station. These two sites are located less than a quarter mile from the CTA’s Green Line and the Halsted and 63rd bus lines border the sites, as shown below in the Transportation & Accessibility Map. Having a grocery store and pharmacy in close proximity to the site allows for one to easily walk to and from a majority of large shopping strips. Also, car ownership in the community is significantly lower than Chicago’s average, reflecting the already high rate of transit utilization within the community. Additionally, this development would be consistent with the City’s vision of increased density around transit stations and a number of neighboring parcels already carry higher density zoning classifications.

Financing/Community Partnerships

Class 7b Property Tax Incentive: The class 7b property tax incentive allows for our development to benefit from a twelve year reduction in property tax values. Instead of being taxed at Cook County’s normal 25% of the assessed value, the property will be taxed at 10% of the assessed value for the first ten years and 15% and 20% for years eleven and twelve respectfully. This tax rate reduction will result in a savings of $20,000,000 over the course of the hold period. Enterprise Zone Incentives: The site’s location within an enterprise zone allows for the utilization of a number of public financial incentives on the site. The first is the elimination of City, County, and State taxes on building materials, a combined savings of 9.25% on the materials cost of the project. Additionally, the businesses located on our site will receive a $500 income tax credit for every job created on the site. Finally, the lender on the project will not be taxed on the income that they receive on the loans for the site, which will then be passed on to the development team in the form of reduced interest rates on the loans for the project. TIF Works: Due to the relatively strong financial health of the project, the development team felt that the utilization of significant TIF funds to finance construction costs of the project was unnecessary and that those funds could be put to a better use within the community. However, the TIF Works program provides workforce and leadership training programs to areas of Chicago within TIF districts that struggle to create jobs. The development team felt that this opportunity to kick start a number of adult education and

community outreach initiatives, could not be passed up. Thus the plan calls for $400,000 in TIF funds to be allocated to the continuing education space in order to fund training programs such as computer training, mock interviews and professional workshops from the opening day of the building on site D.

Special Service Area: The development team proposes the establishment of a special service area to

assist with the maintenance and security of the site. However, the increase in taxes required to properly fund such an area would more than likely strain an already stressed business clientele, and could be the difference between tenants filling or not filling the space. Thus the development team proposes a unique funding scheme for this special service area. The development team will have tenants pay taxes as if the property was being taxed at the normal 25% Cook County Rate. The difference between that amount and the actual amount of taxes being paid into property taxes (15% in years 1-10, 10% in year 11 and 5% in year 12) will be used to fund this special service area. At the end of this time period, the owner of the development, as well as the current tenants will reassess the need for a special service area. This will allow time for the development to begin transforming the community and increase business to the point where a small tax increase will not significantly impact the bottom line of the tenants in the development.

Development Strategy Lot A

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Proposal: Situated on the corner of 63rd Street and 63rd Parkway is 1.8 acres of highly exposed undeveloped land referred to as Lot A. Given the high exposure to 63rd Street, Lot A will consist of a mixed-use building bringing retail and residential offerings unlike anything the Englewood neighborhood has seen for years. This building will have a footprint of 27,500 sq.ft. which will be a retail strip center. Another retail service offering that we will bring to the neighborhood is a 2,500 sq.ft. ground leased bank focusing on small accounts that will be situated on the 63rd St. side of Lot A. The bank will offer drive thru services, with the drive thru being located on the north side between the bank and the mixed-use building. Also included will be 67,731 sq.ft. of high-quality, mixed-income residential units. The residential income mix will consist of 60% market rate, and 40% affordable rate housing. The residential unit mix will be 45% one bedroom and 55% two bedroom apartments. An amenity that will be offered to the residents is a rooftop terrace accessible to all residents that wraps the entire north side of the building, situated on top of the ground floor retail.

Cost: Lot A will consist of 27,500 sq.ft. ground floor retail with 67,731 sq.ft. of residential space (105 units),and a ground leased bank. All of our costs for each of the following sites were obtained by consulting Dennis Garlick from W.E. O’Neil Construction. With the 9.5% material costs savings from the Enterprise zone, we got a per square foot costs of $146.25 for residential, and $107.25 for the retail space. Also on Lot

A will be 28,876 sq.ft. of parking (178 spaces) for a cost of $15.31 per sq.ft. In total this brings the hard costs for Lot A to $14,959,303. Tenants: As we began our search for tenants, we made an intensive effort to strictly target tenants that serve purposes that benefit the direct vicinity, as well as the entire Englewood community. To accomplish this goal, we have reached out to and obtained LOI’s from Jimmy Johns, Famous Footwear, Brown Sugar Bakery, AT&T, Oxford Insurance, City Barbeque and TCF Bank for Lot A. Jimmy Johns, covering 1,200 sq.ft is believed to generate a large amount of their business by catering to the students, faculty, and staff at Kennedy King College, and along with all other retailers, will provide numerous job opportunities for those living at Station at 63rd and throughout the community. Famous Footwear will lease 5,000 sq.ft., and will offer adults and children of the neighborhood an affordable footwear option, a void that has been neglected for many years. Brown Sugar Bakery is going to take up 1,200 sq.ft. and will immediately generate large amounts of business, as it is currently positioned as a prominent retailer on the Southside of Chicago. AT&T is expected to be sending as LOI to lease approximately 1,200 sq.ft. and provide wireless phone and internet services for the entire community. Oxford Auto Insurance will take up 1,500 sq.ft. City Barbeque will cover approximately 3,500 sq.ft.. Our last tenant committed by an LOI to Station at 63rd, is TCF Bank which will sit on a ground lease covering 2,500 Sq.ft.. We chose TCF due to their experience with, and focus on dealing with smaller personal accounts.

Lot B

Proposal: Located on Peoria Drive, and directly behind the new Whole Foods, is our second development site, known as Lot B. Situated on this 1.4 acre site is a magnificent historical firehouse that ultimately provides us with the perfect space for a one of a kind community center. We do have a verbal commitment to form a partnership with Dell Computers which will provide the community center with 15 computers, and wi-fi throughout the entire development. In hopes of furthering Dell’s commitment to this project, we are also in talks with them regarding the naming rights to the community center, in exchange for a 50% assistance with the total renovation costs of the historic firehouse. Also in the firehouse will be a small coffee house that will offer a very small range of options to those who are working in and around the firehouse. This coffee will be sourced through a partnership with a local nonprofit, Kusanya Cafe, where we will buy all of our beans directly from them in exchange for free training of our community center staff. Lastly, we will be partnering with Follett Corporation on the firehouse for certain, and hopefully on additional aspects of our development that will be discussed in the Lot D section. As for the firehouse, board members from Follett have verbally agreed to provide our community center with educational textbooks, reading books, children’s books, and archives related to Englewood’s history, in order to form a small library for the community to have access to. Otherwise we will not be building vertically on the remainder of Lot B, as we plan to use this space as a community park. This park will consist of a Versacourt high durability basketball court, playground equipment, and picnic space and shelters. There will be a 16,000 sq.ft. parking lot with a total of 100 parking space to be used for residents and visitors of Lot D located on the lot as well.

Costs: Lot B will include a community park consisting of a playground $50,000, outdoor furnishings $10,000, a picnic and shelter $180,000, landscape improvements $14,000, a Versacourt basketball court $60,480, and a parking lot at a cost of $15.31 per sq.ft. Also, situated on Lot B is the historic firehouse which will have rehabilitation costs of $1,510,000. This brings the total hard costs for Lot B to $2,984,160.

Lot D

Proposal: Running along Halsted Street on the east and Peoria Dr. on the south is our development site referred to as Lot D. Lot D, a 1.3 acre site will be a primary driver for the local economy in various ways as it will drive local tourism, promote healthy lifestyles, and promote local education and entrepreneurship through the arts.

To further our mission to create an attractive destination for locals throughout Chicago we are proposing Revolution Brewery to bring them in as our 10,000 sq.ft. retail tenant in building D. This will be a large economic driver by promoting tourism, and creating a small manufacturing workforce as they will brew small quantities at this location. Joining the Brewery on the ground floor will be our Center for the Arts and Education and a high-quality community gym. The Center for the Arts and Education will consist of continuing education workshop space, and an art incubator that we are currently working towards the REMIX Project to reach an agreement for them to become the operator of the Art Incubator. Otherwise, we are hoping to reach an agreement with Follett Books to give them the naming rights for the Center for the Arts and Education and in return they would pay for 50% of the cost to build the space. The community gym in Building D will be 10,000 sq.ft., and would be free of charge to residents of Station at 63rd, and would cost non-residents a minimal monthly fee of $5. Lastly, a 10,000 sq.ft. interior parking garage consisting of 50 parking spaces will round out the ground floor. Above the retail and community space will be 105,199 sq.ft of mixed-income residential units, with an income split of 40% market rate, and 60% affordable rate housing. The unit mix of Building D will be 35% one bedrooms, 55% two bedrooms, and 10% three bedrooms to come to a total unit count of 155. These units would come with amenities such as access to the gym below, and a rooftop green terrace on the second floor looking over Peoria Dr. below. Costs: Lot D will consist of 32,000 sq.ft. of retail at a cost of $107.25 per sq.ft., 10,000 Sq.ft. of community space at a cost of $155.03 per Sq.ft., 10,000 Sq.ft. of enclosed parking (50 spaces) at a cost of $78.00 per Sq.ft., and 105,199 Sq.ft. of residential at a cost of $146.25 per sq.ft.. This brings the total hard costs for Lot D to $22,348,110. Tenants: Running along Halsted, Lot D provided us with a prime location to bring a major retailer to our site. We also had a vision to create and generate tourism from locals throughout the Southside. To bring our vision to life, we have been in communication and working towards an LOI with Revolution Brewery.

Revolution will most likely lease a 10,000 sq.ft. space that will allow them to manufacture in small quantities, and to have a taproom to create an attraction that is becoming more and more popular with all generations. Revolution’s manufacturing facilities, and taproom staff, will create a large number of jobs to help build a strong foundation for a prosperous and stable economy. Open Spaces: One of the major obstacles that faced our development team at Illini Realty, were the open spaces that are situated on-top of the 5.5’ mounds covering the underground water retention systems. Due to the absence of economic value that purchasing these mounds creates, we propose to approach the city in an effort to reach an agreement to make small improvements surrounding the open spaces without having to purchase the land. These improvements would consist of building 5.5’ retaining walls running the entire length of the mounds along 63rd Pkwy. and reallocating dirt from Lots A, B, and D to be used as backfill to allow for the mounds to be flush to the top of the retaining walls. In order to create what we strongly believe is a significant amount of aesthetic value, we have been reaching out to the Art Institute of Chicago and the University of Chicago’s Art + Public Life Department to collaborate on a series of art murals that would cover the entirety of the retaining walls. Open Space Costs: Although we do not plan on purchasing the open spaces, the improvements that we are willing to make to them consist of an art budget of $500,000, retaining walls which cost approximately $12,500, and backfilling up to the walls which will cost approximately $15,000. This brings the total hard costs for the open spaces to $527,500.

Project Timeline & Staging Plan

Station at 63rd will be constructed using a three phase process in order to efficiently move our construction crews and materials around the site. Phase I will begin with Lot A, where we will begin work in April 2017 and plan for a completion date of October 2018. Also included in phase I with Lot A, will be the retaining wall on the southernmost open space. Phase II will be scheduled to begin in May 2017 and plan for a completion date of November 2018. This phase will include the community park space and rehabilitation of the firehouse on Lot B. Phase III will be scheduled to begin in June 2017 and plan for a completion date of December 2018. Included in phase III will be all construction taking place on Site D, and the retaining wall that will run along the northern edge of the northernmost open space. By phasing in this manner, we believe that the retail storefronts and the residences on Lot A, and the community center on Lot B having been open for a month and two months respectively, will specifically allow for the brewery to take advantage of the clean and new environment, and thus to immediately begin attracting traffic from outside of the Englewood neighborhood. Lastly, by holding Station at 63 rd’s grand opening at the beginning of 2019, we believe that 2019 will be the year that will begin the transformation and revitalization of Englewood for years to come.

Sustainability

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In order to continue the City of Chicago’s initiatives to promote and spread sustainability, our entire development will be composed of green roofs and low-tech sustainable efforts that create a greener and sustainable environment for the future. The green roofs and the low-tech efforts consist of window and opening placements allowing for cross-ventilation to assist in cooling and heating of the property, green roofs/terraces throughout and pervious pavers to assist with water runoff, solar panels to power all common areas of our development, and many smaller sustainable efforts such as using native plants and green walls where and when possible.

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Financial Analysis

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Predevelopment Budget: The creative financial structure that Illini Realty has built for Station at 63rd is divided into four categories: Land Costs, Hard Costs, Soft Costs, and Tenant Costs. Included in the predevelopment budget are the Land Costs and specific Soft Costs. Our financials numbers and costs, were all collected either through communication with industry professionals, or by researching similar projects both within Chicago, and throughout the entire United States.

Land Costs: To calculate our land costs on a per acre basis, we took the $3.1M pre-site improvement cost that the Englewood Square project acquired their 5.5 acres for and determined a per acre cost. We then took the $5M city investment divided by the entire 13.1 acres to find a pro-rated per acre amount. We then broke these down into per square foot costs to get a collective cost of $21.20 per sq.ft.. This per square foot number was used to value the land acquisition costs of Lots A and D. Regarding Lot B, we felt that an argument could be made to acquire the land for Lot B for a per square foot cost of $15.00 to assist with making Lot B slightly more feasible than it would have otherwise been. We believe we could get it for $15 per Sq.ft. because of the lack of direct economic and financial benefit that we are receiving from the rehabilitation and development of the historic firehouse and Lot B. This process brought our total land acquisition costs to $3,777,523. Soft Costs: Included in our soft costs which were found by consulting Jim Kurtzweil from Clark Street Real Estate are title insurance of $100,000, legal work $1,500,000, architecture and engineering $1,750,000, consultants and accounting $250,000, financing fees $78,681, marketing and promotion $1,250,000, softcost contingencies $150,000, and a development fee of $500,000. This brings our total soft costs amount to $5,578,681. Tenant Costs: Included in our tenant costs are the tenant improvements of $2,457,500, broker’s fees of $2,571,490 and tenant cost contingencies of $900,000 which brings our total tenant costs to $5,928,990. Proforma: prior to running our DCF model and calculating an IRR, NPV, and Return on Costs, we made a set of assumptions which can be found in the assumptions below. Our blended vacancy rate of 7%, was achieved by assuming that we would be on the higher end of the industry standard of 5-8%. As for our growth rate assumptions, we believe that our impact will not be an immediate shock to the neighborhood, and would rather be seen beginning in year four and beyond. Our capital expenditure assumptions of $200 per residential unit, and retail/community space reimbursable of $0.25 per sq.ft. were found by consulting Hanna Oimoen from Wells Fargo. Lastly, our retail rents of $28, brewery rents of $15, and residential market rents of $22 per sq.ft. or $1,008 per month for a one bedroom, $1,375 for a two bedroom, and $1,742 for three bedrooms, were found by consulting with Stephen Leonard and Peter Caruso from Strategic Real Estate Services and Jones Lange LaSalle, as well as conducting extensive research regarding breweries across the country. Using these assumptions, a terminal cap rate of 6.75%, and a ten year hold period we were able to calculate projected sales price for each lot of: Lot A $43,140,069, Lot B and the firehouse would be deeded over in conjunction with the sale of Lot D which has a projected sales price of $46,865,752 which brings our overall development projected sales price to $90,005,821. Furthermore, included in the DCF is our debt service which is run based on quotes from Wells Fargo; the terms can be seen in Debt Service section below. This overall project costing $57,451,744 allowed us to calculate an Internal Rate of Return (IRR) of 16.36%, and a NPV of $20,013,873 when using a discount rate of 7.5%. Our Annual Return on Costs begin in year 2019 at 6.11% and continuously rise throughout the holding period to reach 11.15% in year 2028.

Assumptions & DCF Model

Constructon Costs and Total Costs

Debt Service

IRR

Return on Cost

Project Sources

Strategic Partnerships

Marketing Analysis & Plan

Englewood provides this development with a great opportunity. The area has struggled, but has retained a cultural relevance matched by few neighborhoods in Chicago. The proposed development site used to be the home of Englewood Mall. The past prominence of this land provides immediate recognition, but also illuminates a challenge that has plagued Englewood. How does this community move forward after facing so much economic struggle? Station at 63rd promises an experience of community development, a dedication to grow with Englewood. Central to the development is the repurposed Firehouse. The use of this historical building as a community center transforms an image of the neighborhood’s past, into a beacon for its future. In order to create opportunities for growth, Station at 63rd needs to attract a dynamic mix of partners, retailers, and residents. The goals of the development will be supported by an integrated marketing effort specific to our promise. The return on this effort will be interest from a strategic mix of retailers, partners, and residents. This interest will be measured in the form of LOI’s and signed residential leases. All communication will funnel interested parties to a website and property management team. The website will provide housing for detailed information on the development. The property management team will provide human support to residential leasing efforts. A total budget of $1,250,000 as shown in detail in the Marketing Budget below, has been dedicated for marketing infrastructure and promotional content. Station at 63rd promises to provide opportunities for the community to grow. To add validity to this claim, the development needs to create partnerships that will support and aid in its investment in Englewood. Our team targeted partners that will bring opportunities for community advancement in technology, education, and the arts. Partnerships with Dell, Follett Books, and The Remix Project add immediate credibility to our promise. Retail tenants in this development need to strike a specific mix of qualities. Due to the lack of current foot and vehicle traffic, retailers at this site need to be able to service the consumer in specific ways. Primary aspects of our targeted retailers include the interest in the presence of a community college, synergy with the Englewood Square development, and the ability to create a destination themselves (i.e. Breweries or unique dining experiences). Using these aspects as selling points, we obtained LOI’s from a group of retailers that can succeed in our development and service the community. The majority of promotional communication by Station at 63rd will focus on attracting residents to our development. We will target young urban renters that earn a household income just above the current median in the neighborhood, have some college education, and many have just started families. All communication will follow the guide of our Communications Strategy Brief which can be seen below. The first step towards attracting our target is establishing widespread awareness of the development through a Press Release and large format Digital Billboards on the interstate. Shortly after the Press Release, ad’s will be placed in specific train stations and bus shelters where the target is densely populated which is referenced in the Map of transit with Red Circles. These ads will provide a better understating of the opportunity presented to tenants by Station at 63rd. In the months leading up to the opening, Station at 63rd Street Team will begin executing promotional events. The events will encourage prospective tenants to reach out to our leasing office to explore the opportunity further. Beyond establishing a human voice for our message, the street team will provide valuable paid work experience for students from surrounding colleges. The management staff will supervise the efforts of the Street Team in order to maintain a consistent message and facilitate professional growth. All of these efforts will culminate in the Grand Opening of Station at 63rd. This event will include live musical performances, special offerings by retail tenants, and live art for all to enjoy. A specific timeline for our residential campaign can be found in the Residential Campaign Schedule. Utilizing this promotional plan will allow us to attract residents who seek to grow with Englewood. Post-opening Station at 63rd will continue to use a digital billboard, maintain an active website, and distribute marketing materials as leasing needs arise. Station at 63rd plans to continue marketing after our development opens. Efforts for the year following the grand opening have been budgeted in our plan. A digital billboard will be used to support retailers on a

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rotating basis. Special events with our partners will invite the community to interact with Station at 63rd on a bimonthly basis. Transit advertising will encourage visitors from other neighborhoods to check in on Englewood. Our success depends on a heightened awareness of our development and the success we have had within the community.

Communication Strategy Brief: Station at 63rd:

Marketing Budget: Pre - Opening Marketing Execution Units Unit Cost Train Station Ads 10 12,000 Digital Billboard 2 75,500 Street Team 24 500 Grand Opening 1 75,000 SMM/SEM/Website 12 8,000 Bus Shelter Ads 3 24,000

Total Cost 120,000 151,000 12,000 75,000 96,000 72,000 526,000

Post - Opening Marketing Execution Units Per Unit Cost Total Cost Digital Billboard 1 75,500 75,500 Train Station Ads 6 12,000 72,000 SMM/SEM/Website 12 8,000 96,000 Special Events 24 7,500 180,000 423,500 Leasing Infrastructure Need Units General Manager 1 Leasing Agents 2 Marketing Materials Budget N/A

Total Costs 80,000 90,000 55,500 225,500 Total Marketing Spend

Creative Budget Creative 75,000 75,000

1,250,000

Residential Campaign Schedule:

Press Releases

Digital Billboard

Train Station Ads Street Team

Bus Shelter Ads Digital

Grand Opening

Jan-18

Feb-18

Mar-18

Apr-18

Residential Campaign Schedule May-18 Jun-18 Jul-18

Aug-18

Sep-18

Oct-18

Nov-18

Dec-18

Jan-19

Map of Transit Ad Locations:

Demographics: Transportation Accessibility:

Demographics: Surrounding Neighborhood Map:

Tenants: Letter of Intents:

Professional Resources: Dave Klein – Investment Property Advisors Development Steve Leonard – Strategic Real Estate Services Corp. Jim Kurtzweil – Clark Street Real Estate Peter Caruso – Jones Lang LaSalle David Brin – Brinshore Development Claire Boatright – CNI Group Mike Mallon – Draper & Kramer Hanna Oimoen – Wells Fargo Aaron Winkler – Wells Fargo Ari Ravi – Marcus & Millichap Phil Sipka – Kusanya Café Aaron Mcgee – AM Public Relations Sofia Sianis – University of Illinois Urbana-Champaign Roger Cannaday – University of Illinois Urbana-Champaign Cieda Elizarraraz – The REMIX Project Chicago Chad Fosse – Revolution Brewery Kevin Kulzik – Revolution Brewery Dennis Garlick – W.E. O’Neil Construction Stephanie Hart – Brown Sugar Bakery Jim Pye – Caleres Chris Newman – Jimmy Johns

Development Team: Ben Skinner: is a senior at the University of Illinois studying Finance with a concentration in real estate. Ben has interned in both the brokerage and development side of the real estate industry for QC Iowa Realty - Illinois and Investment Property Advisor Development. Through these internship opportunities, Ben was able to work on anything from investment to operation, finance, architecture, construction, research, and economic development. Ben is the former President of Rho Epsilon.

Ines Andrade: is a sophomore majoring in Economics with a focus in real estate.

Her real estate interests include investment and development. This past summer she worked at CyrusOne, a real estate investment trust, as a finance and information systems intern and she is currently working part time as a leasing assistant at American Campus Communities in Champaign. She is currently the Social Chair of Rho Epsilon. Ryan Hamrick: is a senior student at the University of Illinois studying Advertising. He currently works as a Real Estate Intern at Jimmy John’s and will be joining their development team upon graduating.

Nick Bartholomew: is a senior/first year master's student in the department of Urban and Regional Planning. His areas of interest are investment, development, and real estate research. This past summer, he interned for Newcastle Limited, an investment and development firm in downtown Chicago.

Eliseo Elizarraraz: is a junior in architecture at the University of Illinois. He is a brother of the Phi Kappa Psi fraternity on campus and has also served as a staff writer for the Daily Illini newspaper and as a radio personality for WPGU 107.1. Upon graduation, he plans to specialize in transformative architecture within urban environments as well as restaurant design. Austin Pye: is a senior majoring in finance with emphasis in real estate. He wants to enter the retail side of the real estate industry upon graduation working for a retailer, landlord, or a brokerage firm. Last summer he interned in Chicago at Starwood Retail Partners, a mall landlord. Austin is currently the Vice President of Publicity and Marketing for Rho Epsilon.