Copley Memorial Hospital in Aurora, IL
By Mark Fogarty
6 min read
Rehab of Old Hospital to Revive Illinois Neighborhood
An abandoned hospital campus is set to bring new life to a suburban Chicago neighborhood through an ambitious rehab that is to build housing, health care, social services and educational office space through financing using both Historic Tax Credits (HTC) and New Markets Tax Credits (NMTC) equity.
The Avalon Heights development in Aurora, IL is big in every way. It features multiple old hospital buildings that have been crumbling since being abandoned in 1995.
It also has a multi-acre campus with park space, a total development cost of around $106 million, and many, many financing sources.
The capital stack includes the city of Aurora, which has contributed $12 million in order to get rid of an eyesore and bring significant development to the city’s Bardwell neighborhood, including a 99-unit senior facility (consisting of independent living, assisted living and memory care) and 53 units of housing for adults with cognitive and developmental disabilities.
“The city really invested in making sure this project moved forward,” says Kathleen Galvan, senior project manager for Washington, DC-based National Trust Community Investment Corp., which syndicated some $15 million in Federal Historic Tax Credit equity for the project to investor East West Bank.
The project is located in a highly distressed neighborhood. “Repurposing these abandoned buildings definitely is going to be a cornerstone for the city’s economic development plan,” Galvan says.
Galvan notes the five-building project is a complicated combination of mixed uses. “It works together so well. I’m really glad the developer stuck with it as it got more and more complicated,” she says. “It really will serve the community very well.”
She says the developers “did a great job” designing the campus, carefully choosing the mix of tenants, including health care services that will be conveniently close to the residents.
Health services will include an urgent care clinic, primary care, an old-school-style “apothecary” pharmacy, laboratory and physical therapy space and imaging equipment. Hundreds of permanent and temporary jobs will be created by the build, which has just started (one building is complete or nearly so) and will continue into 2022.
“With COVID and everything else, there’s been a lot of additional complexity with the project,” Galvan says.
Two of the original hospital buildings, the powerhouse and a building dating to the 1980s, have been demolished. Five others remain: the original 1888 hospital, and additions built in 1916, 1932, 1947 and 1970.
There’s no doubt the nine-acre Copley Memorial Hospital site (originally it was called Aurora City Hospital) qualifies for the National Register of Historic Places (the National Park Service certified the site in 2019). It dates back to 1888 and according to a blog on the site of the project’s architect, Kluber Architects and Engineers, it began as a modest 25-bed hospital.
A Major Expansion
According to Kelsey Skager, Kluber’s marketing coordinator, “In 1931, the hospital expanded and cost around $235,000 to build. Local politician and Aurora resident Ira Clifton Copley made a hefty financial contribution to the hospital expansion. The property was renamed in her honor as Copley Memorial Hospital (sometimes it is called Old Copley Hospital).
“From 1931 to the 1970’s, several additions were added on to Copley Hospital. This expanded its local footprint significantly, with the campus eventually growing to 341,000 square feet and seven different buildings,” she writes.
“The first step in restoring Old Copley Hospital was to have it professionally cleaned and abated,” according to Skager.
“The property was severely damaged throughout the years due to mold, and it was also home to both asbestos and lead. The abatement and cleaning process took approximately nine months, and construction is now under way.”
Other interesting things in Skager’s account include the fact that an expensive piece of imaging equipment, an MRI machine, was left behind when the hospital was abandoned, and the local stories that the badly-deteriorated buildings have quite a reputation for spectral inhabitants.
Repurposing the neglected buildings “definitely is going to revitalize that area,” says Galvan.
The developer is Fox Valley Developers, an Aurora-based team headed by three sets of brothers—Jason and Paul Konrad, Russell and Ronald Woerman, and Michael and Dr. Stathis Poulakidas—that were not afraid to tackle what promised to be a complicated build and financing.
“The development team was very solutions-driven, always looking for a path forward,” says Galvan. “I was very impressed.” Michael Poulakidas says Fox Valley was a “single purpose entity,” though he says the brothers are open to doing another project in the future.
“We’ve been friends forever,” he says of the sets of brothers. “We grew up and went to high school in the same area.” They come from different professions, including construction, medicine and the law—and one of them, Paul Konrad, is the weatherman on Chicago’s WGN television station.
They wanted to bring their skills together on a worthwhile local project, he says. After a couple of tries, a new city administration liked their idea of middle-level senior housing, he says. Then they added the other housing and the healthcare services afterward.
“It has a lot of moving parts,” Poulakidas acknowledges. “But it’s a really nice fit.”
Construction is being done by locally-based Konrad Construction, while MacRostie Historic Advisors of Washington, DC is the historical consultant.
PACE Funding
In addition to the State and Federal Historic Credits and New Markets Credits, and the city’s financing, Avalon Heights recently was awarded $3 million in C-PACE funding for energy-efficient upgrades (the acronym stands for Commercial Property Assessed Clean Energy) through the Illinois Energy Conservation Authority.
Other financing includes $34.5 million in first mortgage debt provided by a Boston-area bank, UC Funds and a bridge loan provided by Enhanced Capital to cover the Federal and State Historic Tax Credits. Fox Valley just recently closed on a New Markets Tax Credit deal as well, to provide $2.9 million in equity.
According to Fox Valley, a total of 99 senior residences are available: up to 60 for independent living, up to 22 for assisted living and up to 17 for memory care. Gardant Management Solutions will manage the senior units, which will take up three “blocks” of the old hospital.
Fifty-three one-bedroom apartments are available for adults with intellectual disabilities in the “Aurora Life” section, which will be located on the upper four floors of the 1970s East Wing building.
The first two floors of that building, measuring 42,000 square feet, will be for healthcare services, according to the developer.
The East Aurora School District also will have administrative offices on the campus, in a building that was once the Nurses’ Dormitory and is separate from the rest of the development.
Story Contacts:
Kathleen Galvan, Senior Project Manager, National Trust Community Investment Corp., Washington, DC, kgalvan@ntcic.com
Michael Poulakidas, Partner, Fox Valley Development, Aurora, IL, michael@mjplawoffice.com
Kelsey Skager, Marketing Coordinator , Kluber Architects and Engineers, Batavia, IL, Blog The History and Future of Old Copley Hospital in Aurora. kluberinc.com/old-copley-hospital-redevelopment-aurora-illinois/
