DNAinfo.com: Milshire Hotel eyed by Fishman, but SRO ordinance could give non-profit edge

By Darryl Holliday

LOGAN SQUARE — As the city moves to keep single room occupancy housing available to low-income residents, a nonprofit group is going up against a prominent Logan Square landlord in a bid to buy the embattled Milshire Hotel.

Low-income residents of the Milshire, 2525 N. Milwaukee Ave., were asked to leave in late May when the SRO’s owner Art Fischoff announced he was selling the bed bug-infested building in a booming part of the neighborhood.

The city confirmed that Logan Square realty group M. Fishman & Company has moved to purchase the Milshire. But a new proposed ordinance could give a nonprofit group interested in the property an edge over high-profile landlord Mark Fishman.

According to Michael Banghart, executive director of Renaissance Social Services Incorporated, his group’s plan will exceed the ordinance’s mandatory inclusion of 20 percent low-income housing by 5 percent. The ordinance would also give Renaissance six months to prepare a proposal before any sale.

“Logan Square is an incredible neighborhood that has become more popular and is becoming less affordable in which to live,” Banghart said. “If we price [low-income people] out of the neighborhood then the community deteriorates.”

But Banghart knows what he’s up against — aside from bed bug and roach infestations, the building needs a major overhaul.

“Renaissance specializes in helping this population get their lives back … [but] with the uncertainty of the sale it is impossible to proceed with getting together the financing needed,” Banghart said. “Some of the timeline is hard to tell without having seen the whole structure.”

Fishman, however, has overhauled rundown neighborhood buildings in the past. He owns at least 20 commercial and residential buildings in the neighbohood and completed a $5.6 million renovation of the Logan Theater — with the help of about $1 million in Tax Increment Financing.

Fishman hasn’t announced any plans for the Milshire and would not return multiple calls for comment, but after an investigation into recent changes at the SRO, city lawyers wrote: “it appears, upon information and belief, that there is a contract to sell the property [to M. Fishman & Company].”

Former Milshire Tenants Union lawyer Mark Swartz, who helped residents get a $4,000 settlement when they were booted from their units in the spring, said he hopes the SRO can remain affordable, but acknowledged it will be tough for anyone to get it up and running.

“What I would prefer would be that the building remain affordable rental housing,” Swartz said. “The appeal of a nonprofit is that it could provide housing for some of the same types of low income and underserved individuals that currently live in the Milshire.”

Banghart estimated the nonprofit organization could have the hotel rehabbed and back open in about 18 months under good circumstances. While there has been no update on Fishman’s interest in the building since the new SRO ordinance was announced this week, other city developers say the ordinance could set a “dangerous precedent” for developers.

Jay Michael, whose company owns the Flats Chicago brand that has renovated several SROs and residential hotels on the North Side in recent years, said this is about more than real estate.

He doubts non profits and goodwill developers would be able to fill the gap if private industry backs away from SROs, many of which are distressed buildings needing millions of dollars worth of renovations.

“I question this as a Chicagoan, and as an American,” said Michael. “Are we going to set a precedent for a government using private business to solve big public problems?”