tfl: The Flatiron Life

If the PRChi is going to host the Olympics then all those Olympians are going to need to live somewhere. Don’t worry; Ben Joravsky reports The Mayor has a plan: Buy and old hospital, raze it, sell the land to a developer who will be required to let Olympians live there before selling the units to the public.

That alone scares me but lets look at some details.

City officials haven’t released all the specifics, but here’s what they’ve revealed: The city will agree to borrow $85 million to buy the Michael Reese Hospital campus, near 31st and King Drive, from its current owner, Medline Industries. But Medline will only get $65 million, because the company has agreed to make a $20 million “charitable contribution” back to the city.

Wait, huh, why doesn’t the city just spend $65 million and skip the contribution part?

“You see a lot of it in the sub-prime mort­gage loan business,” [a source in the mortgage lending industry] says. “You’ll get a situation where a house is worth, say, $100,000, but the buyer has no money for a down payment, so the buyer says to the seller, ‘I’ll tell you what—you’re only asking $100,000. I’ll give you $105,000. And then you give me back $5,000 so I can pay a down payment.’”

Brilliant! Sub-Prime loans seem to be a smart deal, right? Smart deal for the leaner in this case because unlike a lot of people who got No-Income-No-Asset loans, the city, with its powers tax and eminent domain, is more like Your-Income-Your Assets and Chicagoans are on the line when the deal heads south.

That will not happen though, right? The city has a track record of sound real estate deals, yeah?

This is starting to remind me of the debacle at Block 37. In the late 1980s and early ’90s the city spent about $40 million to buy and demolish the block bounded by Washington, Randolph, State, and Dearborn, then sold it for $12.6 million to a consortium of developers. They never got a project off the ground, and a few years ago the city ended up buying the property back for about $32.5 million. Even as real estate prices were skyrocketing, the city managed to lose millions of dollars on each transaction.

Crap! 2016 looks more and more like when Jos and I move back to Indiana.

Chicago is nowhere near the front runner for the 2016 Olympics. Good news.

I noticed one of the other cities in the running is Baku. I had never heard of Baku, so that makes it my pick or the 2016 Olympics. The Olympics seem like a great way for cities to get there name on the map.

Baku is so unknown, I could tell you it is the capital of Azerbaijan, but most people have never even heard of Azerbaijan. Double Bonus!

Mayor Daley is getting all the ducks in a row for the Olympics. The latest is an overhaul of how the public interacts with Park District officials. Basically, you cannot and if you try the district will stop you.

The prospect of this monstrosity actually coming to my fair city freaks me out. The city will not be the one it is today after the Olympics and it will be massively in debt. This will probably be the right time for 8 year old Jonah to become a Hoosier.