CHICAGO | Lincoln Yards

[k1052]

Originally Posted by r18tdi

There's no way in hell SB wants to relitigate their entitlements

No, I think they will. It will be a one at a time approach through instead of a mass request to flip most of the office to residential as their exhaust their existing entitlements for stuff they actually want to build.

[ardecila]

As I noted before they are already entitled for 6,500 units across both Lincoln Yards North and LY South. DPD will generally allow units to be shifted between sub-areas (but not between North and South, which are separate PDs) so long as the overall totals do not increase.

SB should have everything they need to start throwing up a bunch of residential buildings before they need to go back to City Council to re-negotiate the PD. Likely they will bide their time and try to push it through whenever the political winds are favorable, but that shouldn't hold up construction in the meantime. Hopefully they get several buildings up and running and people get used to taller buildings in this location, so the NIMBYism is a little less apocalyptic.

[k1052]

Originally Posted by ardecila

As I noted before they are already entitled for 6,500 units across both Lincoln Yards North and LY South. DPD will generally allow units to be shifted between sub-areas (but not between North and South, which are separate PDs) so long as the overall totals do not increase.

SB should have everything they need to start throwing up a bunch of residential buildings before they need to go back to City Council to re-negotiate the PD. Likely they will bide their time and try to push it through whenever the political winds are favorable, but that shouldn't hold up construction in the meantime. Hopefully they get several buildings up and running and people get used to taller buildings in this location, so the NIMBYism is a little less apocalyptic.

Yeah this is likely years away but they're going to go back. I kind of doubt they take a crack at redoing the whole PD at once since that's a pretty big target and only after a lot of construction is done so the neighborhood is basically numb to it.

[Randomguy34]

Originally Posted by ardecila

SB should have everything they need to start throwing up a bunch of residential buildings before they need to go back to City Council to re-negotiate the PD.

Sterling Bay might actually have some good odds to re-negotiate the PD. They've said Mayor Johnson is supportive of the development and willing to help them with any changes they need. More surprisingly, Carlos Ramirez Rosa seems to now be in favor of the development. Pretty significant considering he was a staunch opponent and is now the zoning chair.

“I support dense development, I support the creation of more housing,” he said. “So I support the building of Lincoln Yards. It’s going to create good union jobs, it’s going to create needed housing units.”

https://www.chicagobusiness.com/poli...ion-fund-pitch

[west-town-brad]

Especially if the Chicago Teachers Union (the shadow city govt) becomes a primary investor, I’d expect all of their backed politicians to be supportive now.

LY used to be a bad plan because of “billionaire developers” but now it’s good because of “union jobs and housing” when nothing at all has actually changed.

Originally Posted by Randomguy34

Sterling Bay might actually have some good odds to re-negotiate the PD. They've said Mayor Johnson is supportive of the development and willing to help them with any changes they need. More surprisingly, Carlos Ramirez Rosa seems to now be in favor of the development. Pretty significant considering he was a staunch opponent and is now the zoning chair.


https://www.chicagobusiness.com/poli...ion-fund-pitch

[ardecila]

Originally Posted by Randomguy34

Sterling Bay might actually have some good odds to re-negotiate the PD. They've said Mayor Johnson is supportive of the development and willing to help them with any changes they need. More surprisingly, Carlos Ramirez Rosa seems to now be in favor of the development. Pretty significant considering he was a staunch opponent and is now the zoning chair.

https://www.chicagobusiness.com/poli...ion-fund-pitch

Yeah, big reversals from Rosa and the CTU crowd lately. But Rosa claims he is still opposed to the TIF. The TIF is the only remotely feasible way to add the infrastructure that this site needs to densify. It's far from CTA rail lines, and the roads nearby are all 2-lane streets from the 1800s that don't even connect through.

If Rosa wants to add housing, and he doesn't want to spend city resources on infrastructure, then that new housing needs to be in existing neighborhoods near transit. Not industrial corridors. AKA - more TOD towers along Milwaukee Avenue.

[r18tdi]

https://www.costar.com/article/13631...wers-next-door

As it lines up nearby apartment projects, it’s unclear why Sterling Bay has yet to start building any of the 6,000 residential units it is approved to develop within Lincoln Yards. The planned development allows for up to 14.5 million square feet of new buildings on the once-industrial land, with towers rising as high as 595 feet.

It has been slowed by unexpected factors including the onset of COVID-19, rising interest rates and construction costs, a pullback by real estate investors and lenders and worries of a recession. CEO Andy Gloor also has blamed previous Mayor Lori Lightfoot for not supporting the project and causing slowdowns in permits and other approvals for aspects of the project including infrastructure improvements.

[twister244]

I'm just happy to see news from SB on this. Tells me SB really wants to move the needle forward on this. I would much prefer super dense as this is prime land on the river, close to the Metra, and could easily connect to CTA. It would be a wasted opportunity we allow the entire development to be a field of mid rises.

[west-town-brad]

Amazing how fast North Union project has moved compared to LY.

I guess the location really does matter in real estate.

[LouisVanDerWright]

Ironically one of my tenants is a major investor (probably THE major investor) in LY. He is NOT at all happy with Sterling Bay right now.

I would spill more beans, but I try not to pry or wiggle this loose tooth with him. He's a very private person.

Originally Posted by west-town-brad

Amazing how fast North Union project has moved compared to LY.

I guess the location really does matter in real estate.

I mean no, the issue is that LY not only has no infrastructure for this, but who knows what industrial cleanup is still needed after a century of intense industrial use as a steel mill. It's not easy to just start slapping up towers in the middle of an enormous brownfield site.

[SamInTheLoop]

^ There's gotta be big institutional money behind this, no? Or was there and they split? As mentioned, I've had the feeling there might be major capital partner issues going on. Something about Gloor's Razzie worthy schtick lately/ public B Johnson fluffing/turn to the Chicago Teachers Pension Fund.....it's all just a bit much. And, man, their parting ways with Citadel down in hype cycle land for new hq - ouch.

[lakeshoredrive]

I would love to see an IMAX theater built in this development lol. I think they should build a combination of mid rises and high rises residential buildings. Maybe a hotel or two. A large grocery store. And an active riverwalk! Just get rid of the office and lab components.

[VKChaz]

Originally Posted by lakeshoredrive

I would love to see an IMAX theater built in this development lol. I think they should build a combination of mid rises and high rises residential buildings. Maybe a hotel or two. A large grocery store. And an active riverwalk! Just get rid of the office and lab components.

I guess it depends what you mean by "active." But I would expect a more interesting riverwalk with a significant office component. Workers need places to have lunch, blow off steam and all tend to congregate around mid-day so the space needs enough volume to accommodate them. Residential riverwalks can get away with being blah, serving the needs of residents who want a place to walk their dogs.

[twister244]

I don’t have a a sub, but saw this on my feed today:
https://www.chicagobusiness.com/comm...-lincoln-yards

[west-town-brad]

Originally Posted by twister244

I don’t have a a sub, but saw this on my feed today:
https://www.chicagobusiness.com/comm...-lincoln-yards

the high level is that sterlingbay has to pay for $500 million in city infrastructure upfront for the project, and then would be paid back via some kind of tax charged over the coming years/decades

this arrangement is problematic to fund since (shocker) the developer does not have hundreds of millions sitting around to pay for it. this in spite of being a "billionaire developer" LOL

so they are trying to figure this somewhat unusual arrangement out with the city and Lightfoot was not too helpful in doing that. they hope Johnson will be more helpful and are trying to build that relationship with him and the new members of city council

[twister244]

Oh man - A big gap in funding. If only someone could step in to help facilitate justification for public funding for infrastructure ** cough ** new stadium ** cough **

[SamInTheLoop]

Well, rule #1 of real estate development is you build with other peoples' money.

It would be no surprise, if it is in fact the case, that big institutional and other private equity would be backing way off this.

And of course, on the debt side we know banks are taking several big steps back from development in general.

Sterling Bay did have a large (not saying LY specific, but more generally) capital partner in JP Morgan, not sure what the status is of that arrangement. My total guess would be they are not super-interested here.

[twister244]

Originally Posted by SamInTheLoop

Well, rule #1 of real estate development is you build with other peoples' money.

It would be no surprise, if it is in fact the case, that big institutional and other private equity would be backing way off this.

And of course, on the debt side we know banks are taking several big steps back from development in general.

Sterling Bay did have a large (not saying LY specific, but more generally) capital partner in JP Morgan, not sure what the status is of that arrangement. My total guess would be they are not super-interested here.

That's also a very good point. A few years ago, money was cheap, so risky bets were more likely to get off the ground. Those days are gone, and banks need assurances with anything new moving forward. Will be interesting to see how this unfolds over the coming weeks.

[west-town-brad]

I think they just need to revisit the upfront nature of the infrastructure and who pays for it and when.

the condo owners of Lakeshore East are still paying off the bonds that funded the infrastructure improvements that were required for that project via a specific annual tax on their units. that $60 million bond was issued by the city of chicago on behalf of the developer.

you need the city to go along with a plan like that...

[SamInTheLoop]

^ Agree that is A fundamental issue, but they apparently need lots of capital....this big pitch for CTU investment, exhibit 1 (one apparent reason admittedly of multiple for Gloor's gratuitous Johnson fluffing tour in the media).