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LSC Development to Build Chicago Self-Storage Facility After Settling Lawsuit Against the City

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Update 4/19/17 – A Cook County judge denied the injunction motion from Northwest Side Unite to stop the zoning change to the self-storage development site on Northwest Highway. Though the April 13 judgment improves the status of the LSC Development project, the group’s lawsuit seeking to halt construction entirely is scheduled to be heard in Cook County Circuit Court on May 16, according to the source.

In denying the injunctive relief, the judge said the community group had “presented no facts indicating that an emergency exists or irreparable harm will result if an injunction is not issued by the court at this time,” the source reported.


4/10/17 – A lawsuit challenging the city’s settlement agreement with LSC Development could further jeopardize the developer moving forward with its self-storage project on Northwest Highway. The lawsuit was filed on April 6 in Cook County Circuit Court on behalf of several homeowners, a business and Northwest Side Unite, a community organization that opposes the project. It seeks to invalidate the earlier settlement agreement and asks for an injunction to prevent the city from taking further action on rezoning the site, according to the source.

A hearing on the plaintiffs’ request to stop the zoning-approval process is scheduled for April 13, though it’s unclear if the lawsuit will cause further delay on the zoning vote. The city council zoning committee is scheduled to meet on April 12, but a hearing on the proposal hasn’t been posted to the agenda, the source reported.

The lawsuit claims the settlement agreement was an attempt by the city to skirt the normal zoning-approval process by requiring support from Arena and Scudiero before the community was properly notified of the project. “They basically bargained away the neighborhood’s rights,” Peter Stasiewicz, an attorney representing the plaintiffs, told the source.

Arena held a community meeting to discuss the project two weeks after he signed the settlement in January and didn’t mention the agreement at the Feb. 9 meeting, the source reported.

Northwest Side Unite has collected more than 4,500 signatures opposing the joint project, and at least 80 percent of homeowners within 250 feet of the building site have reportedly signed affidavits opposing the plan. Many residents oppose the scale of the apartment building and self-storage facility.

Based on the settlement agreement, LSC Development could be owed compensation if the rezoning doesn’t go through. It would have up to a year to reinstate its original lawsuit, which claimed the company was in jeopardy of defaulting on a $6.4 million loan for the project due to downsizing its original plan and subsequent delays, according to the source. The company spent about $3.5 million acquiring the property and on the interior demolition work to the existing building.


3/28/17 – The LSC Development self-storage project hit another snag on Monday when the zoning committee failed to vote at the end of a seven-hour meeting in which dozens of residents voiced opposition to the plan. Though the meeting was supposed to focus on the self-storage portion of the overall project, several residents raised concerns about the apartment complex that will eventually be built at the site.

After several hours of discussion, alderman Edward Burke asked for a roll call to see if there were enough committee members still present for a valid vote. When the number was short, the meeting was adjourned, according to the source.

Arena indicated he was caught off guard by Burke’s roll-call request and vowed to bring the project back in front of the committee next month. Arena also said Burke had expressed concern earlier on Monday that there was a “procedural” problem with the lawsuit settlement that requires Arena to support the construction plan. "This is a minor delay," he told the source. "We have a good project. We're going to make sure we've dotted all the Is and crossed all the Ts."

During the meeting, dozens of residents said the project would be a blight to Jefferson Park’s small-town feel, the source reported. Though the public was specifically asked to refrain from discussing the proposed apartment complex, many brought it up when addressing the committee. Since the residential plan was first announced, residents have voiced concerns that the inclusion of low-rent tenants could increase crime in the neighborhood.

Full Circle Communities has proposed the mixed-income complex.


3/22/17 – The Chicago Plan Commission unanimously approved the rezoning of a 1.54-acre parcel on Northwest Highway to allow LSC Development to move forward with its multi-story self-storage facility. Under the lawsuit settlement, Arena and zoning administrator Patricia Scudiero agreed to support the zoning change to enable the storage project and eventually a residential development, according to the source. Construction on the storage facility is expected to begin this spring.

The plan for the site remains controversial, with about 100 people registering to speak against the project during the March 16 meeting. A petition with 3,000 signatures in opposition was also presented to the commission. About 25 people registered to speak in favor of the plan, including representatives from the Jefferson Park Neighborhood Association and several community groups, the source reported.

Some residents said a 70-foot-tall self-storage structure wouldn’t fit in with the surrounding community, while others claimed there are too many storage facilities operating in the area. Some also believe changing the zoning to a dense community-shopping district sets a bad precedent for future development, according to the source.

Arena told the commission the project was in line with recently rewritten city code to encourage development near transit centers. The property is near the Jefferson Park Transit Center, which will receive a $25 million renovation in the next five years, the source reported.

The residential component to the overall plan wasn’t included in the commission vote. The development ordinance will be worded to prohibit any construction on the south end of the property and will have to be amended to allow the housing project, city officials said during the meeting. Such an amendment will require another round of public hearings.


2/16/17 – LSC Development LLC appears poised to move forward with building a self-storage facility in Chicago after settling a lawsuit it filed against the city. The suit was filed after the city cancelled LSC’s construction permit just one day after issue. LSC intends to build a five-story facility at 5150 N. Northwest Highway, where a seven-story mixed-use development is also planned, according to the source.

LSC filed suit against the city last April after buildings commissioner Judy Frydland voided its construction permit at the urging of alderman John Arena. Though LSC obtained the permit in accordance with the property’s M1-1 zoning, Arena later had it changed to B1-1, which doesn’t allow self-storage, the source reported.

Under the developer’s original plans, the self-storage facility would have been converted from a former Archdiocese of Chicago food-processing plant and taken up the entire building site. Arena reportedly wanted to halt the project because it didn’t include any residential component, according to the source.

Though details of the agreement haven’t been released, LSC is now expected to build the storage facility on the northern half of the parcel and later sell the southern half to a residential developer, the source reported. Last month, LSC filed a zoning application to allow for self-storage and an unspecified residential development. The new plan calls for a 100-unit apartment complex. The old food-processing plant will be demolished.

The new mixed-use plan for the site is expected to generate much higher tax revenue for the city, according to Arena. “The agreement will increase the property-tax revenue for the space from a projected $135,000 a year from adapted reuse [of the existing building] to an estimated half a million annually from the combined storage, retail and residential. More than half will go to our schools,” he told the source. “We are pleased with this outcome, which is a much better deal for the taxpayers and local residents than what was initially proposed.”

In its lawsuit, LSC indicated it was blindsided by the zoning change and alleged it was never notified by the city before officials filed the rezoning ordinance. LSC challenged the voiding of its construction permit and sought damages.

Cook County, Ill., Circuit Court Judge Sophia Hall dismissed the lawsuit earlier this month after the city and developer settled out of court. LSC will have up to one year to reinstate the case if there’s a violation to the agreement, the source reported.

Based in Barrington, Ill., LSC specializes in industrial parks, office complexes and self-storage facilities. It also owns and leases nearly 700,000 square feet of industrial and office space in Aurora, Barrington, Chicago, Elgin, Harwood Heights and Libertyville, Ill., according to the company website.

Sources:

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