Chicago developer wants to buy unincorporated Suburban Estates, Apartments for $30M, annex land into DeKalb

DeKALB – A Chicago developer wants to purchase and rehabilitate two privately-owned rental complexes, around 530 units, in unincorporated DeKalb County, and city of DeKalb officials say the properties could be annexed into city limits to better maintain quality of living for tenants.

Clear Investment Group LLC – which purchased three major rental complexes on DeKalb’s north side within the past year, formerly known as Hunter Ridgebrook, Lincoln Tower and Lincoln Tri-Frat now called The Terraces at DeKalb – has made a bid for Suburban Apartments on North Annie Glidden Road and Suburban Estates on Twombly Road. According to city of DeKalb documents released ahead of Monday’s DeKalb City Council meeting, the developer would purchase, repair, rehabilitate and maintain tenants in both complexes as new owners for $30 million.

Amy Rubenstein with Clear Investment did not immediately respond to request for comment.

City officials said Thursday the hope is to also annex the 80-acre property – which also includes a solar energy garden – into the city of DeKalb. Though the properties fall along the northern border of city limits, jurisdiction since the properties were built in 1967 and rented primarily by Northern Illinois University students and faculty initially has fallen to DeKalb County government. Now, the rental facilities are home to mostly single family tenants. According to the DeKalb County Housing Authority, Section 8 housing vouchers are also offered for units at Suburban Apartments.

Over the years, the property has fallen into disarray, city and county officials said, citing crime and inadequate housing quality as a reason for wanting the change in ownership. Better enforcement of existing city code meant to maintain a certain level of housing quality is another trigger for the potential city annexation, documents show.

“We’re very excited about moving forward with this potential developer that will purchase the property, update the properties and provide decent, affordable housing that is a place the people that live there could be proud of,” DeKalb Mayor Cohen Barnes said.

What lies ahead is an intergovernmental agreement proposal, which would see DeKalb city and DeKalb County governments working together, pending the ownership change, to annex the space and change over police jurisdiction of the properties. Under the proposed agreement, Clear Investment would take ownership of the private properties as early as Oct. 2, or no later than March 1, 2023. Rehabilitation would need to be completed within 18 months of Clear Investment obtaining permits from the city, documents show.

“This is just another great example of government entities working together for the greater good of the residents of our county,” Barnes said.

The properties would also undergo water and sewer maintenance, rehabilitating it from a well water system and bringing it onto the city’s water mains. The sewers are already operated through the Kishwaukee Water Reclamation District.

Much like the ownership change for The Terraces at DeKalb – spurred by what city officials said was consistent crime in the area which led to regular police calls – a buyer for Suburban Apartments and Suburban Estates could bring needed security for residents of the area, city officials said.

City Manager Bill Nicklas said the city wants to better serve the residents by incorporating the properties into city jurisdiction.

“We also want to address crime which is an issue,” Nicklas said Thursday. “The county sheriff’s department and city police department make regular visits every week to the complexes there. And we want to do the right thing in terms of the security of the people who come to town to put down roots and raise families. There’s also some bad actors who are not there for the same purposes.”

Under the proposed agreement, the properties would be annexed into the city. The DeKalb County Sheriff’s Office, however, would maintain primary policing jurisdiction over the area at the sole expense of the county for two years from the date of annexation, or three years from the date of the developer’s closing, whichever comes first. After that time, police jurisdiction would be handed over to DeKalb police.

DeKalb County Sheriff Andy Sullivan said countywide policing agencies, including nearby NIU police, work collaboratively anyway.

“We’re there every day,” Sullivan said Thursday when asked how often police get called to the unincorporated area. “Whether we’re serving papers or there on a call, unlocking someone’s car or responding to a domestic situation. Sometimes it’s more than once a day, sometimes it’s only once a day, so it just varies.”

He said NIU and DeKalb police frequently respond in tandem, calling it a “great working relationship.”

“I don’t know that it will address the frequency of calls,” Sullivan said about a potential property ownership change. “But I’m excited for the new developer to potentially purchase the property. I think it’s going to benefit the residents there. The main reason we’re doing it is we don’t have code enforcement at the county level that the city has. I think it’s going to beneficial to the residents in the future and beyond. I think it’s going to be a win-win.”

Under Clear Investment’s ownership, the Suburban properties would be upgraded with security cameras which would provide a live feed in all public and common areas to DeKalb and county law enforcement agencies. Private security would be on site “as needed” and regular security walk-throughs by city and county police agencies would occur, according to the proposal.

A win-win is what DeKalb County Administrator Brian Gregory called annexing the 80 acres into the city of DeKalb, in a memo sent to the DeKalb County Board Thursday.

As part of the proposed plan, the city of DeKalb would take the rental properties off its aging well water services and connect the complexes to the city of DeKalb’s existing water mains, something county officials said wouldn’t happen under the properties’ current ownership.

In what Nicklas called “an act of good faith,” the county government will pitch in financially to help with water upgrades. The DeKalb County Board is expected to vote at its meeting in August whether to approve placing $862,500 in an escrow fund to be used for installation and connection of water main at the Suburban properties. The funds would come from the county’s chunk of federal dollars from the American Rescue Plan Act, according to county documents.

Suburban Estates and Apartments were constructed in 1967, and the complexes grew into 24 buildings and 532 units, according to county documents. The properties have existed under various owners over the years. Recently, the DeKalb County Board approved a solar energy garden for the 80-acre site.

Existing tenant concerns and water quality issues have also sparked concern by county officials, Gregory wrote, which he said are better addressed through annexation.

“Both the county and city frequently receive phone calls with concerns related to property maintenance within individual units and the common areas,” Gregory wrote in his Thursday memo to the county board.

“Broken windows, broken pipes, water quality and pressure, heating and cooling issues, insects, and mold have all been among the issues raised by the tenants over the past five years,” Gregory wrote. “As the jurisdiction having authority, the County, which has limited code enforcement abilities under Illinois law, is significantly hampered in the tools it can apply to addressing complaints and proactively requiring improvements.”

The apartments are served by two private wells for water supply and fire suppression.

“The private system has been described as having bad odors, being yellow colored, and having low pressures by current tenants when calling for assistance,” Gregory wrote.

Gregory said a former fire official raised concerns about the low water pressure also, saying that if there was ever a fire at the property the department would have to bypass the current system and cross to nearby properties to bring in water. Because the city of DeKalb is a home rule – a state legal designation for municipalities with populations more than 25,000 – code enforcement and tenant concerns could be better addressed in city limits.

“From a conventional planning standpoint, a development like this would no longer be recommended outside of municipal limits,” Gregory wrote.

Code enforcement issues was one of the aspects that fueled the city to come to an agreement with Evanston-based Hunter Properties the former owners of Lincoln Tower and other properties purchased by Clear Investment. The city also purchased Hunter Hillcrest Shopping Center from the former landlord, which was at the center of years of legal disputes over hundreds of code violations the city had enacted on Hunter.

Nicklas said city and county officials began discussing the future of the Suburban properties in earnest in early spring.

“We were thinking it could be goof if we could get new ownership that would be more attentive to the tenant’s needs,” Nicklas said. “And [Clear Investment] were interested.”