Chicago Real Estate Daily
By: David Lee Matthews
April 09, 2014
Marc Realty LLC seeks a zoning change that would allow it to nearly triple the number of units at the city's only mobile-home park, discarding a 2008 city plan that would have replaced the trailers with more traditional housing.
Several entities managed by Chicago-based Marc want to boost the number of manufactured homes at Harbor Point Estates on the Southeast Side to 747 units, from its current 190, according to its zoning application with the city.
The Marc ventures took over the property last year after acquiring a $14 million loan its prior owner borrowed in an effort to replace Harbor Point Estates with 953 affordable and market-rate homes, public records show. That plan, approved by the city in 2008, quickly fizzled as the residential market began its free fall and the property was hit with foreclosure suits.
Harbor Point Estates, in the Hegewisch neighborhood, has 190 manufactured homes and 50 recreational vehicles, according to the Marc zoning application filed last week.
Marc Realty Principal Gerald Nudo and a zoning lawyer representing the firm did not respond to requests for comment. James Soboleski, president of Des Plaines-based MHPI Inc., which sold Harbor Point Estates to the Marc ventures, referred questions to his partner in the venture, Benjamin Kadish. Mr. Kadish, president of Chicago-based Maverick Commercial Mortgage Inc., did not return a call.
Manufactured-home construction has picked up in recent years as the subprime meltdown steered many home shoppers to cheaper housing alternatives, and attracted landlords seeking steady returns with low maintenance costs, said Kolman Bubis, a founding partner of Chicago-based Sunstone Manufactured Housing Consultants. Well-known investors including Carlyle Group LP and Warren Buffett own manufactured homes. Shares of Sam Zell's Equity LifeStyle Properties Inc., the nation's largest mobile-home owner with nearly 140,000 sites, were up 1.7 percent from a year earlier at the end of trading April 7.
The Manufactured Housing Institute reported 60,210 shipments of new manufactured homes nationwide last year, up nearly 10 percent from 2012 and 21 percent from 2009.
"It fills that void for people who can't afford to buy stick-built houses," said Mr. Bubis, who is not involved with Harbor Point Estates.
Marc's plans received support from the community during a recent neighborhood meeting, said Ald. John Pope (10th), whose ward oversees Harbor Point Estates. Mr. Pope said he encouraged the 2008 plan to create value at the park, which sits between two lakes, but the housing crash and infrastructure costs associated with conventional residential development has led him and neighbors to believe expanding the mobile-home park is the best, most realistic course for the property.
The city approved a tax-increment (TIF) financing grant for the 2008 development, but Mr. Pope said Marc's project would not receive any subsidy. There are vacancies at Harbor Point Estates, but Mr. Pope said the Marc venture has rolled out seven new model homes to drive interest at the site.
Known as a bargain-hunting investor, Marc Realty manages more than 10 million square feet in commercial real estate, according to its website. In 2011, the firm began focusing on the troves of distressed residential property left by the market crash, and formed a subsidiary a year later to gobble up failed condominium projects and other developments.
A 130-acre community built on a former landfill, Harbor Point Estates has existed for decades, Mr. Pope said. The site has remained the sole mobile-home park in Chicago, most likely because other city sites were deemed too valuable for such a use, Mr. Bubis said.
Unlike traditional homes built on-site, manufactured homes are assembled in a factory and then transported to their parks. Manufactured home-dwellers buy or rent their homes and also pay the park owner rent for the land they lease, Mr. Bubis said. Though such parks have been associated with negative "trailer park" stigma in the past, many current manufactured homes include vinyl siding, granite countertops and other features found in more expensive homes, Mr. Bubis said.
The venture has not yet secured construction financing for the project, according to Cook County records.