CHICAGO—The City of Chicago's 2013 transit-oriented development ordinance has accomplished its goal of kicking off the construction of many new residential buildings on once-vacant or under-utilized land. But one of the city's most active TOD developers tells GlobeSt.com that from now on, it's going to be tougher to take advantage of the law.

"We tied up a lot of our assets a year and a half ago to acquire transit-oriented sites," says John McLinden of Centrum Partners. "We got way out in front," and the Chicago-based company now has has more than half a dozen TOD projects in its pipeline, including ones in Wicker Park, Lakeview and Old Irving Park. "But because the market has improved, you will now be paying some pretty hefty prices for any half-acre or acre located next to a train station. There are obviously a lot of great neighborhoods, and there is tremendous demand, but I can tell you that finding a site where you can do something of scale is difficult these days."

The ordinance reduced the amount of parking that developers had to provide for new residential buildings constructed next to transit stations. Previously, builders had to include a parking space for each unit, but "the market demand for parking spaces is somewhat less," McLinden adds, usually about 30 to 40 spaces for every 100 units, at least for developments in walkable neighborhoods. Therefore, the law allowed greater density and let developers use the extra space for amenities including retail. "The Chicago market was heating up anyway, and it was particularly strong in the neighborhoods that have great transit hubs."

In 2014, Centrum acquired a ¼-acre site from KF Lakeview, LLC at 3400 N. Lincoln Ave. in Lakeview, last used as a construction staging area, and broke ground earlier this year on Centrum Lakeview, a five-story, 36-unit residential apartment building. Located adjacent to the "L" Brown Line stop at Paulina, the 40,000 square foot building will also have a 6,000 square foot retail space along Lincoln Ave.

And the company recently broke ground on Centrum Wicker Park, another TOD project at 1650-54 W. Division St. next to the Blue Line stop in Wicker Park. Like its other projects, the six-story, 60-unit building will include a host of amenities. Residents will have access to a fitness room, rooftop deck, party room/lounge area, secure bike storage and 30 below grade parking spots. Centrum expects to deliver the units by next summer.

Furthermore, 12,000 square feet of ground floor retail space will anchor the new development. Bow Truss, a specialty coffee roaster, has already signed on for 1,000 square feet. "We consider the retail to be another amenity," McLinden says.

"A lot of people love these neighborhoods because they already have great restaurants, boutiques and street life," he adds, but it's also true that building dense TOD projects will encourage even more retailers to open up. "All these things fuel one another; you will see more retail because people are spending money in the neighborhood."

Centrum has also just unveiled the plans for its latest TOD project, Centrum 606, a 95-unit residential apartment at 1767 N. Milwaukee Ave. adjacent to The 606 trail in Bucktown, and retail will also play a key role. The company purchased the land from Aldi in June and plans to tear down the existing grocery store. "They will be gone for a year and then come back as the anchor tenant on the ground floor," says McLinden. "It was part of the deal from the beginning. It is a very profitable store for them, and for us having a grocery store on the first floor is a great benefit. At the end of the day it will be a great mixed-use project."

Under the original TOD ordinance, this project would not have qualified for incentives from the city because it is too far from a train station. But two months ago the city council approved an expansion, and developments like this one, just a five-minute walk to the Blue Line, now meet the definition of a transit-oriented development.

"The price of land is going up and that will make it challenging to put deals together," McLinden says, but the looser definition should give developers some encouragement. "In the end, consumers are driving this, and there is still a very strong attraction to these neighborhoods."