WOODLAWN — The Cook County Land Bank is still working out the details of the sale of former Washington Park National Bank site to a prominent South Side developer.
There is no hard deadline for completing the $250,000 sale to Revive 6300, a joint venture between DL3 Realty and Greenlining Realty USA, Land Bank director Rob Rose said. The Land Bank accepted the proposal for the property in March 2019.
Once a sale is finalized, the partners intend to demolish the nearly century-old structure and replace it with a new one featuring 60,000 square feet of office space, said Alex Sparhawk, DL3’s director of acquisitions and development.
The proposal would also bring ground-floor retail, a bank and co-working space to the property. The developer is in the process of negotiating with partners like the YWCA and the University of Chicago to occupy the building, Sparhawk said.
The Land Bank is pushing to close the sale before the property’s water certification expires in February, while DL3 hopes to purchase in time to start construction by the middle of this year.
Rose said last month that the parties hoped to complete a sale by the end of 2019.
There is “nothing that’s happening here that’s a cause for concern,” Rose said. The time it’s taken to negotiate a sale is “standard for real estate deals of this scale and scope.”
Uncertainty over “vague” federal Opportunity Zone regulations and concerns about flooding in the existing structure have taken time to work out, Rose and Sparhawk said.
“Part of it is just that [Opportunity Zone funding] is such a new mechanism,” Rose said. “If you structure [a deal] improperly, as investors, they’re not going to get their tax benefits. We don’t want to rush to get something done, then the groups coming in to provide financing end up not getting the benefits that they want.”
The Opportunity Zone program, created by an act of Congress in 2017, offers capital gains tax relief for investments in “economically distressed areas.”
The lack of clarity has been “a big hurdle” for this and all other Opportunity Zone deals, Sparhawk said. Now that regulations are clear and in effect, past issues “seem to be working [themselves] out,” Sparhawk said.
The developer has minor concerns about “what to do with the water” that’s flooding the basement of the existing structure, which does not have a roof and is deteriorating quickly due to years of vacancy, Sparhawk said.
The property’s water concerns “are not going to ruin the deal,” though DL3 “still has a couple of questions” about how to remediate flooding, he said.
DL3 Realty is a commercial real estate company headed by Leon Walker. Greenlining Realty USA is a real estate firm founded by Lamell McMorris.
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