Base closure opens luxury apartments at Chicago's North Shore: after Naval Air Station Glenview met its fate in the Base Realignment and Closure Act, developers partnered with the Village of Glenview, Ill., to create a unique, mixed-use development with ultra-luxury apartment homes and high-end retailers on the 1,200-acre property.

Hangar One still stands, albeit a shade of what it once was, and street names like Navy Boulevard link the area to its military past. Naval Air Station (NAS) Glenview, a military base on Chicago's North Shore for 58 years, though, is now a memory. Today, more than 1,200 single and multifamily homes dot the landscape known as The Glen, and the last phase of redevelopment, the centerpiece of the project, is complete. The Glen Town Center comprises a 45-acre mixed use development of luxury apartments, upscale retail and town homes.

"It's an exciting protect on many levels because it gave us an opportunity to develop part of a former military base, which was a first for us, and work with the Village of Glenview, which had both a vision for the site and a commitment to see it through," said Paul Buss, a Principal at OliverMcMillan, San Diego, Calif., a 25-year-old company that builds urban retail, entertainment and mixed-use projects primarily through public-private partnerships with public entities and redevelopment agencies, and the Village of Glenview's choice to develop The Glen Town Center.

The Centerpiece: The Glen Town Center

The selection of OliverMcMillan was the result of a very competitive process, said Don Owen, Director of Economic Redevelopment for the Village of Glenview. The Village received 59 proposals for acquisition and development of the 649-acre marketplace.

"Our selection criteria were more about vision, quality and the capacity to pull it off," Owen said. "We selected OliverMcMillan in the final analysis because they understood our vision--and even proposed something beyond our vision that was better." For the Center's development, the Village approved a $76.5 million tax incremental financing incentive and OliverMcMillan contributed $60 million in debt and equity.

The 45-acre Glen Town Center is the commercial heart of The Glen and the heart of the old naval base. Anchor retailers include a 160,000-square-foot Von Maur, an upscale Iowa-based department store aggressively growing in the Midwest; an 80,000-square-foot Galyan's Trading Co. store; exclusive smaller retailers and boutiques; a Crown Theatres 10-screen cinema with stadium seating; and other shops, markets and restaurants. The Center, which opened in mid-October, is 87 percent leased. The overall Glen project also includes two golf courses, a 150-acre park, assisted living facilities and 1 million square feet of office space.

NAS Glenview was 319 acres in 1940, when the Curtiss-Wright Corp. sold the private airfield to the Navy. However, when the Navy Air Station was decommissioned in 1995, the acreage was up to approximately 1,200. Today, The Glen is 1,028 acres, which does not include about 20 acres that still belong to the Navy for housing.

The town center also has 181 apartments--the only ultra luxury apartments in the North Shore area--built over retail. Tree-lined sidewalks, parkways, traditional regional facades, storefronts and Navy Park--the town square of The Glen Town Center--complete the village atmosphere.

The Value of Apartments

The Glen is located in the affluent North Shore area off Lake Michigan and lends itself to upscale development and construction, said OliverMcMillan's Buss. Single and multifamily housing--with a median home value of $600,000 in the Glen--dominate, with about 1,200 homes ringing the town center, holding a median home value of $350,000 within Glenview.

The scarcity of luxury apartments in the North Shore area is expected to overshadow the downtown Chicago market, which was somewhat battered by the slide in the economy, according to industry researchers. Here, accessibility of a host of amenities made apartments a smart--and necessary--addition in the development plan, Buss said.

"Our position was that we wanted to create a true Main Street project and the Village of Glenview wanted an urban center. You can't do it without a mix that includes apartments," Buss said.

Condominiums were considered, but the low-rise construction with two stories of apartments over retail space presents all ideal environment for dispute, he said.

"With condos, you have the potential for complaints from two different owner ships--the condo owners and the retailers--over a variety of issues, like noise and smells that are inherent with many of the businesses that ate, in fact, just beneath [the apartment homes,]" Buss said.

"These are difficult issues, but if you have rental, the problem is more manageable. As the apartment owner, we can write the leases and control the management, which we couldn't do if we did condos. Apartments were an obvious alternative."

The decision to have rental apartments was also a financial one, Buss

said. "When you have a market where retail is soft and apartments are hard to get, from the standpoint of an investment for lenders, apartments are key."

The shortage of luxury apartments in the North Shore area easily brings residents to The Glen and a natural audience to the retailers.

ALOFT Apartments at The Glen Town Center comprise 181 luxury units. Rents start at $1,550 for one bedroom/one bath (775 square feet to 1,100 square leer) and $1,995 for two bedrooms/two baths (1,100 square feet to 1,600 square feet). The units were designed loft-style, with open floor plans, 9-foot ceilings, French doors, balconies, a full-size washer and dryer in each apartment, cable and high speed Internet access and hardwood floors. Among the building amenities are concierge services, a private media room, a fitness center, community room with a gourmet catering kitchen, controlled access and indoor heated garage parking.

"It's a special project developed by a real dream team. Collectively, the players have brought world-class, award-winning experience that guarantees The Glen's success," said Richard Goldstein, Vice President of Ludwig and Co., Gurnee, Ill., a boutique firm that develops and manages hotels, residential and commercial real estate throughout the Midwest. Ludwig and Co. was chosen to market and manage the apartments at The Glen Town Center.

A preferred reservation program guaranteeing opening rents was started in August by Goldstein. "In spite of the current bubble in the luxury apartment market here, The Glen will stand alone as the premier apartment address in the area. It will be the first ultra luxury apartment community on the North Shore. The market is different here," Goldstein said. We will capitalize on our unit plans, lifestyle amenities and location," he said.

Project insiders are undoubtedly confident of the market for these apartments, but elsewhere--and relatively nearby--the Chicago apartment market has been flooded by condominium construction and conversions, hastened by low mortgage rates. More than 5,000 condominiums, including 1,500 conversions, were expected in 2003, according to researchers Marcus & Millichap, mad the growing availability of for-sale units will continue to strain the high-end rental market. Concessions are common among owners of rental property, and an average four to six weeks of free rent is common among higher-end properties. But despite the low interest rates that have siphoned off renters and converted them to homeowners, remaining are a large number of renter-by-choice residents.

OliverMcMillan's Buss admits the rental market is soft, but it is also temporary.

"There are other important factors that come into play," he said. "The fact is that it's hard to get higher end rental property in the north suburbs here. We're thinking long term. That, combined with the amenities of the town center and surrounding area like the park, health facility and golf courses, makes the apartments extremely marketable."

B. Kreisler, ImPrint LLC, is a consultant to the multifamily housing industry, providing public relations, communications and marketing strategies. She can reached at 703/366-2861 or via e-mail at [e-mail].