Smart money is finding its way to smart growth; investors are finding that once distressed urban areas offer considerable upside in a largely tapped out real estate market. Some have raised concerns that once the tide turns, the new investors will turn out to be just another set of absentee landlords.

1. Big money finds Bronzeville. Central Station’s corporate developers, Forest City Fogelson, have purchased eight acres (about two blocks) from Mercy Hospital for a $150 million market-rate development called Eastgate Village: “on the east side of the hospital campus, located between 25th and 26th streets, and from Michigan Avenue to King Drive. The estimated 550 townhomes, duplexes, senior living units and condominiums will be priced from $185,000 to $450,000.”

Loft conversions first moved south to Cermak maybe 3-4 years ago, as converters ran out of buildings closer to the Loop. A few small developments have taken place south of the McCormick Place/I-55 blockade that separates Bronzeville from the Near South; this is by far the biggest non-HOPE VI development on the mid-south side since the days of urban renewal.

2. Magic Johnson is investing in a 216-unit conversion of the 1929 Williamsburg Savings Bank. Brooklyn’s tallest building has long stood alone over Fort Greene and offers both commanding views of Manhattan and great subway access within the building; it’s also around the corner from BAM.

Canyon-Johnson Urban Funds hopes to deliver $1.5 billion in investments in 25 cities by year’s end. Additional financing comes from Citibank Community Development.

“H. Thomas O�Hara has been tapped as the architect. He has been instructed to maintain the landmark property�s exterior fa�ade, interior bank vaults as well as its famous clock tower perched atop the building, according to a spokesman for CJU. K. Robert Turner is a managing partner of Canyon-Urban Johnson Funds, an equity investment fund that is devoted to revitalizing apartment buildings and mixed-use projects in inner cities. He is a partner with Johnson.”

Odd that Magic Johnson seems to have succeeded in raising a higher profile nationally than, say, Andrew Cuomo or Henry Cisneros.

3. Phil Angelides leverages yet more funds for smart growth, in cooperation with foundations and private investors. From GlobeSt:

“Phoenix Realty Group and the San Diego Capital Collaborative have launched a new venture called the San Diego Smart Growth Fund with a $90 million investment that they plan to leverage into $500 million in market rate housing and commercial development. The $90 million includes $60 million from CalPERS, the California Public Employees Retirement System.

“The partners describe the new fund as an effort to revitalize urban centers and to create affordable housing for middle-income residents. It will provide funding to build approximately 2,000 market-rate housing units throughout San Diego County as well as neighborhood retail centers that would serve the housing.”

“The Smart Growth fund will be capitalized only with private sector capital, and will operate in accordance with market disciplines to produce an equity return from mid to high teens.”