Pioneer Arcade affordable housing project in jeopardy as city support wavers
1535 N. Pulaski Road is no ordinary Chicago building. Modeled after 17th- and 18th-century Spanish Baroque style architecture, rising two stories with an ivory-colored, terra-cotta facade, the Pioneer Arcade building in Humboldt Park was once a hub for indoor recreational fun, a bowling and billiards hall that was operational for about 80 years.
Now, the building’s ornate outsides have disguised its hollow insides since the early aughts, with more vacant years likely to come as redevelopment plans have stalled.
The proposed project for the site is in jeopardy as Chicago’s Department of Housing has twice rejected the Hispanic Housing Development Corp.’s request for a financial letter of support to receive $1.5 million in low-income housing tax credits from the Illinois Housing Development Authority to construct 61 rental units of affordable senior housing.
Without city support, the organization might have to leave a $6 million grant from Housing and Urban Development on the table, as well as the potential for an additional $24 million in federal rental subsidies to help the developer maintain affordability for the proposed building over a period of 40 years.
The development corporation received a deadline extension from July 2023 to July 2024 from HUD for when it has to break ground on the project, and the group can receive only one more extension before the five-year time limit.
“We are dead in the water with the project,” said Hipolito “Paul” Roldan, president and CEO of the Hispanic Housing Development Corp. “We don’t know whether HUD would give us another extension on top of this, given the city has not expressed interest in supporting (our project).”
The $6 million grant came from HUD’s Section 202 funding, money that is earmarked for supportive housing for low-income elderly residents. For HUD’s fiscal year 2020 funding round, 37 projects out of 132 applicants were selected for grants totaling around $150 million, with the Hispanic Housing Development Corp.’s project the only one in Illinois.
The Hispanic Housing and Development Corp.— a Chicago-based midwestern affordable housing developer focused on Latino neighborhoods — purchased the Pioneer Arcade building in 2005 and received the HUD grant in 2021, with Chicago’s Department of Planning and Development pledging its support in a letter to HUD.
In the May 2021 letter, the city called the project an “anchor” for its community and “an integral part of the City’s Invest South/West efforts in Humboldt Park.”
The development corporation needs low-income housing tax credit funds — tax credits set aside for developers of affordable housing — to help raise the bulk of the capital required for the project in the private market, as “it’s virtually impossible” to do so without it, Roldan said.
The Pioneer Arcade building also falls in one of the city’s many tax increment financing districts, where developers can make infrastructure and other community improvements by tapping into funds pooled together by neighborhood property taxes. According to the city of Chicago’s website page on the Pulaski Corridor TIF, where the Pioneer Arcade is located, development priorities in the area include “land assembly initiatives, rehabilitation efforts, and public works improvements that facilitate traffic flow, and enhance public transit amenities.”
Over the past few years, the city has included the Pioneer Arcade redevelopment in various Invest South/West informational and promotional materials.
Down the street from the Pioneer Arcade building is the former Pioneer Bank building, which secured financial support for a $53 million development project as a part of the city’s Invest South/West initiative. In the city’s “neighborhood context” section in the Pioneer Bank request for proposal overview from April 2021, the Pioneer Arcade building redevelopment is referred to as “transformative,” with the restoration of both the arcade and bank buildings bringing “vibrancy back to the North and Pulaski intersection and ensure that affordable housing is maintained so local residents can stay in the neighborhood.”
And as recent as the city’s three-year Invest South/West update from November 2022, the Pioneer Arcade redevelopment is highlighted in the pages on development plans in Humboldt Park along the North Avenue corridor.
William “Bill” Smiljanic-Perez, a board member of Humboldt Park community group Noble Neighbors, thinks Invest South/West is falling short of its goals when it comes to redevelopment of the Pioneer Arcade building.
“For almost a decade, we have labored to push back gentrification moving west of The 606 and the displacement of our most vulnerable neighbors, yet the city is blocking development of deeply affordable housing for longtime Humboldt Park senior citizens in need,” Smiljanic-Perez said in a statement. “It doesn’t make sense!”
In an email to the Tribune, Chicago Housing Commissioner Marisa Novara said, “Until such time as Congress funds housing one can afford as an entitlement, affordable housing developers will receive more nos than yeses in state and local funding rounds. This round of applications to the Illinois Housing Development Authority (IHDA) is no different: the state received 19 requests for developments within Chicago, while they typically have the resources to support approximately three.”
The office of Mayor Lori Lightfoot declined further comment.
One of the developments that did receive a letter of support from the Department of Housing was the Pioneer Bank restoration project, according to a department spokesperson. The Pioneer Bank redevelopment requested $1.5 million from the state in low-income housing tax credits.
Roldan said he will ask for another extension from HUD, but he doubts his organization will be granted one.
“What can we offer HUD in terms of comfort that we will persuade the city to fund the thing when they have turned us down twice already?” Roldan said. “HUD needs some credibility that the city is going to step up. … We are running out of time, and we are running out of excuses.”
Given a preliminary designation as a historic landmark late last year, with official designation potentially on the horizon as a proposal was submitted to City Council in January, the Pioneer Arcade is slated to keep its facade and preserve its interior during the restoration process.
Development of the Pioneer Arcade began in 1924 with a price tag of $350,000 on what was then called Crawford Avenue.
A Tribune article from June 22, 1924, states that plans for the Pioneer Arcade building from architect Jens J. Jensen say the building “will be one of the most elaborate recreation buildings in the city.” The writer reported that the Pioneer Arcade would have four shops on the ground floor, with a main floor lobby leading into a billiard room fitted with 35 tables and an elaborate staircase leading to a lounge area abutted with 20 bowling alleys and room for 600 spectators.
It was last a bowling alley, Pioneer Lanes, under ownership of “entrepreneur and champion bowler Luis Gonzalez” before it was sold to the Hispanic Housing Development Corp., according to the building’s final landmark designation report from December.
The development corporation ran into problems renovating the project from the start, with the 2008 financial crisis hitting shortly after the purchase of the property, which the company initially intended to develop as affordable housing units for purchase. The project still wasn’t off the ground by the time the pandemic hit, which further delayed its progress, Roldan said.
With its hard-to-miss grandiose facade coupled with boarded-up storefront windows at the site that once housed Two Pals Lunch and the Arcade Barber Shop, the Pioneer Arcade continues to collect dust as its redevelopment fate remains in limbo.
Around the block, Roldan’s organization has developed a 72-unit senior affordable housing building on the southeast corner of Pulaski Road and North Avenue. The building was completed about a decade ago and is at 100% occupancy, with the waitlist closed in an effort to curb expectations that people could get a unit before a few years, Roldan said.
“Whenever we finish a project, we may have 100 units and 800 families apply,” Roldan said. “I think (the Pioneer Arcade redevelopment) is important to the community because of the substantial need.”
Henry Birdsong, a 67-year-old resident in the Pulaski and North building, said he sees this need firsthand.
“We have so many people out here on the streets because there is not enough affordable housing,” said Birdsong, who has lived in his apartment for about seven years and works as a security guard for a condominium. “A loss of this project would speak for itself: The community just doesn’t have the housing for seniors (who are) low-income. … We badly need a senior building.”
Chicago Tribune’s Marianne Mather contributed.
Correction: A previous version of this story included an incorrect amount for how much the Hispanic Housing Development Corp. sought in low-income housing tax credits for the Pioneer Arcade project. The error has been corrected.
