Riverside village trustees on June 7 voted to delay a decision on rezoning commercial property on Ogden Avenue that would allow its owner to convert a moribund medical office building into 12 condominiums.
Trustees voted 4 to 1 to postpone the matter until Aug. 16 in order for the owner to either try to sell the office building at 7234 Ogden Ave. or explore other options for commercial development.
“Where I’m struggling, is that I don’t think conversion to 12 condos is the highest and best use for that property,” said Trustee Michael Sedivy. “It prohibits what is really one of the premier locations for commercial redevelopment in our village.”
In 2009, the Riverside Village Board changed the zoning of 7234 Ogden Ave. to B1-C, which is strictly a commercial designation that does not allow ground-floor residential uses.
The property’s owner, Dr. Tahir Sheikh, seeks to rezone the property to B1-TC, a hybrid designation that allows both commercial and residential uses, such as condos. Sheikh has owned the property since 1983 and for 30 years the office building was fully occupied by doctors and the American Heart Association.
In recent years, as healthcare companies have changed the way their doctors deliver primary care services, medical office buildings like Sheikh’s have foundered. The building has just one tenant remaining.
Sheikh stated that the large medical office building next door to the east at 3722 Harlem Avenue, now owned by Loyola University Health Systems, was 40 percent vacant.
“There is no demand for medical offices,” Sheikh told trustees. “The hospitals that are successful have their own branded buildings with their own doctors. … All I know is that the office market is not going to come back.”
Sheikh argued that the residential market in Riverside is strong and that he believed he could sell the new condos for about $160,000 apiece. His daughter would be one of the condo owners, he said.
But with the future of medical offices in doubt and with two of those buildings adjacent to each other at Harlem and Ogden, Riverside officials wondered whether rezoning 7234 Ogden Ave. was wise, since both parcels might be combined to create a larger commercial development in the future.
Asked if he’d considered redeveloping the property for some other strictly commercial purpose, Sheikh said he hadn’t, but he added that the relatively narrow, deep lot wasn’t conducive to that kind of redevelopment.
Sheikh also said he’s tried desperately to sell the property, even putting it up for auction. The auction didn’t attract a single bid, he said. He said he has used three different real estate firms to market the building, with no success.
He has succeeded in getting the real estate taxes reduced on the property, from $156,000 a year to $42,000, based on its long-term vacancy rate. But Sheikh says the property still loses between $110,000 and $120,000 per year.
“Just imagine being in my shoes,” Sheikh said, “if half of your salary goes away every year for this building. I will try anything possible on the earth to change that. And believe me, I have.”
Sedivy said that the $42,000 Sheikh now pays in taxes would roughly match the property taxes 12 condominiums would bring the village, further bolstering, in his mind, the argument against rezoning.
“What we’ve done with residential on Harlem and Ogden has really landlocked us and puts us in a situation where we’re over-reliant on [residential] real estate taxes,” Sedivy said. “Based solely on that, I cannot support rezoning the property and allowing any use that’s not in the best interest of the village.”
Trustee Doug Pollock also said he wanted to explore options for redeveloping the property before moving ahead with rezoning, especially in light of the vacancy rate at the former MacNeal Professional Building.
“If it’s 40 percent vacant and dropping and the ownership is looking to sell, then there’s an opportunity for a larger redevelopment here,” Pollock said. “It may not be possible and we may come back and say, given the circumstances, that rezoning’s appropriate, but until we really dig into that I think we need to take a step back and see if there’s an opportunity here to do something that would benefit the property owner as well as the village as a whole.”
While he said he sympathized with Sheikh’s plight, Village President Ben Sells also agreed that action that would limit future redevelopment of Harlem and Ogden and should be delayed until other options were explored.
When the village in 2009 decided to zone Sheikh’s building as commercial, they did so intentionally, Sells said.
“We have to take into consideration the greater good of the village as a whole,” Sells said. “In 2009, a prior board specifically made this decision to zone this commercial, and I suspect for exactly the reasons that [village trustees] are articulating.”
It’s not exactly clear how options for redevelopment of Sheikh’s property will be studied, although Sheikh stated he would seek again begin actively marketing the property for sale.
Sells indicated that Sheikh and village staff might work together to explore options, which can be discussed when the village board again considers the matter on Aug. 16.