The City Council approved a major financing package on April 16 for the next phase of the Lathrop Homes redevelopment, clearing the way for construction to begin on the long-vacant southern portion of the site.
The approval is important because it addresses years of delays caused by financial and planning hurdles. The new phase, known as Phase 1C, aims to provide much-needed housing and revitalize an area that has been empty and deteriorating for years.
Phase 1C will include 309 mixed-income units across seven rehabilitated buildings and a new five-story structure south of Diversey Parkway. The project also plans to restore Lathrop’s historic powerhouse building. Construction is expected to start after a financial closing this summer, with completion targeted for the third quarter of 2028.
Nivea Sandoval, a longtime resident, said during public comment Monday: “This has been so long. We need those houses.”
The financing plan combines city-issued multifamily housing revenue bonds up to $100 million and a $40 million tax increment financing agreement from the Diversey/Chicago River TIF district. There is also a $41 million interest-free loan from the Chicago Housing Authority (CHA) over 43 years, plus several streams of tax credit financing.
Alderman Scott Waguespack said: “It’s been a long saga, with a lot of iterations to get here. But this is important for the community, including residents who were moved more than a decade ago and will now have the chance to come back and make this their home again.”
Related Midwest and Bickerdike Redevelopment Corporation are leading development efforts after being selected by CHA in 2010. Bank of America will provide construction loans while Citibank serves as permanent lender; LR Contracting is general contractor.
About eighty percent of units will be reserved for CHA or other income-restricted residents at various income levels between thirty percent and eighty percent area median income; sixty-one apartments will be market rate. Three deteriorated buildings are set for demolition while others are rehabilitated or replaced with new construction.
Lathrop Homes was built in 1938 as public housing but much was emptied beginning in early 2000s under CHA’s Plan for Transformation. While nearly five hundred units have been completed north of Diversey since 2019, most southern buildings have remained vacant amid concerns about crime and decay.
Alderman Bill Conway questioned why earlier phases took so long: “We in this city need to figure out how to build housing faster than that.” CHA officials attributed delays mainly to complex financing requirements amid rising costs.
Once finished, Phase 1C brings total new or rehabbed units at Lathrop close to eight hundred—part of broader efforts creating mixed-income communities along Chicago River—but some advocates remain concerned about fewer deeply affordable homes compared with decades past.
Annette Griffin summed up many residents’ feelings: “People need houses,” she said Monday. “It’s been too long. Let’s get this done.”
