City approves Sterling Bay’s $6B Lincoln Yards plan to transform riverfront

The developer is still awaiting approval for a $1.3B TIF district to pay for infrastructure improvements in the riverfront megadevelopment

Mar.March 13, 2019 01:59 PM

Sterling Bay’s Andy Gloor and Mayor Rahm Emanuel with a rendering of Lincoln Yards (Credit: Getty Images and Skender Construction)

UPDATED: The City Council closed the books Wednesday on eight months of fierce debate, public protests and internal negotiations by giving Sterling Bay the final go-ahead for its $6 billion plan to extend the city’s skyline along the North Branch of the Chicago River.

Aldermen voted 33-15 to ratify the developer’s two-part master plan for the 54-acre Lincoln Yards site, officially allowing the construction of 14.5 million square feet of office, retail and residential space on the longtime industrial riverfront property.

Council members spent nearly two hours sparring over the proposal, with more than a half-dozen alderman demanding more affordable housing or other public benefits from the developer before the city allowed the project to move forward. The 15 dissenters were a rarity for the council, where many votes are unanimous.

Alderman Harry Osterman (48th), who represents the Edgewater neighborhood on the North Side, called on his colleagues to delay approval for the development he called “Schaumburg Yards,” saying the plan for 600-foot-tall buildings were reminiscent of the northwest suburb.

“This is the rich getting richer, the North Side getting norther,” Osterman said. “I have no doubt that if this deal fails today, we will be back here with Sterling Bay in two months with a better deal.”

That prompted a heated response from Alderman Tom Tunney (44th), an ally of Mayor Rahm Emanuel who won re-election in his North Side ward last month. Tunney said he was “insulted” by Osterman’s nickname for the project, saying Hudson Yards in New York would be a better point of comparison.

“Go look at New York, go look at the incentives they had to [give to] get Hudson Yards,” Tunney said. “We need to compete with New York and Houston, we need to be world-class city. And if Sterling Bay is going to bring us halfway there, God bless.”

When Emanuel stepped to the microphone after the vote, he said Lincoln Yards would come with more public benefits than Related’s 26-acre Manhattan megaproject. He cited Chicago’s density bonus program, which requires developers to fund business improvements on the South and West sides in exchange for taller building allowances.

“Hudson Yards did not produce $92 million dollars … that would go to the hard parts of New York to create businesses, coffee shops, restaurants,” Emanuel said.

Sterling Bay is still awaiting council approval for a new $1.3 billion tax increment financing district, which would repay the firm for public infrastructure projects it builds around the site, something the developer and the project’s backers — most notably Emanuel and Alderman Brian Hopkins (2nd), — want to push through the finish line before a new mayor takes over in May.

In a statement, Sterling Bay spokesperson Sarah Hamilton thanked Hopkins, Emanuel and the council, saying the developer is “excited to get to work on this once-in-a-lifetime project that will bring thousands of jobs and economic opportunity to our city. This is the start of a 10-year project and we will continue to work collaboratively to transform the former industrial site into a vibrant riverfront community and a highly desirable place for all Chicagoans to live, work and play.”

The sweeping project dates to late 2016, when Sterling Bay bought the 22-acre site of A. Finkl Steel & Sons on the east bank of the river. Months later, it paid the city $105 million for the 13-acre former home of the Fleet and Facilities Management department on the river’s west bank.

Neighbors panned the massive scale of the project when it was first made public in July. Hopkins, whose support for the project was pivotal to its passage because of the unwritten rule of “aldermanic privilege” that gives council members near-unilateral power over development in their wards, held up the approval process while Sterling Bay tried to win over community groups.

The project since has undergone a series of changes, all while Sterling Bay continued to pick up smaller nearby properties to pad its footprint in the area.

In November, Sterling Bay went public with a second version of the plan that trimmed down maximum building heights and boosted the amount of open space from 13 to 21 acres. And in January, Hopkins rejected plans for a 20,000 seat soccer stadium and “entertainment district” in the development.

When Sterling Bay agreed to the change, Hopkins threw his official support behind the plan, and it was approved by the Chicago Plan Commission days later.

The plan hit another roadblock about a week after that, when Alderman Danny Solis (25th) resigned as chairman of the council’s zoning committee after being ensnared in a corruption scandal.

Alderman James Cappleman (46th) took over the position and said he would delay the plan’s committee hearing until Sterling Bay boosted the number of affordable units in the plan. Cappleman scheduled a special committee meeting last week to hear the plan, and Sterling Bay agreed to double the number of affordable units planned for the site from 300 to 600, out of a total of 6,000.

Cappleman voted “no” on the proposal last week, saying he needed more time to review the last-minute changes. But his apparent resistance was not enough to stop a majority of committee members from sending the plan to the full council for a vote.

Next month, the council will have another chance to approve the 168-acre TIF district around the Lincoln Yards site. That plan was advanced last month by the Community Development Commission, whose members were appointed by Emanuel.

Emanuel and city planning department commissioner David Reifman both aggressively have defended tax increment financing, calling it a key plank in Emanuel’s long-standing effort to attract corporate relocations.

Cook County Board president Toni Preckwinkle and attorney Lori Lightfoot, who will face off in the runoff election for mayor next month, both called on aldermen to delay the approval process until one of them takes Emanuel’s chair in May.

Related Articles

Liberty Mutual at 27201 Bella Vista in Warrenville (Google Maps)

Chicago’s Q3 suburban office market hits highest vacancy in decade

Chicago’s Q3 suburban office market hits highest vacancy in decade
Sterling Bay CEO Andy Gloor and 1515 West Webster Avenue (Google Maps)

Sterling Bay will sell Lincoln Yards office building for over $100M

Sterling Bay will sell Lincoln Yards office building for over $100M
Mayor Lori Lightfoot (Getty, iStock)

Lightfoot to propose $94M property tax hike

Lightfoot to propose $94M property tax hike
110 N Carpenter Street in Fulton Market (Photo via Sterling Bay)

Sterling Bay, JPMorgan near deal to sell McDonald’s HQ for $430M

Sterling Bay, JPMorgan near deal to sell McDonald’s HQ for $430M
Brian Whiting, CEO of Telos Group, and the Old Post Office (Credit: Google Maps)

Lonely at the top: 601W Cos. opens Old Post Office rooftop park in WFH world

Lonely at the top: 601W Cos. opens Old Post Office rooftop park in WFH world CEO Alex Vetter and the building (Credit: Google Maps) wants to shrink its space at West Loop HQ wants to shrink its space at West Loop HQ
Thor Equities’ Joseph Sitt and Palmer House Hilton at 17 East Monroe Street (Google Maps)

Thor’s Palmer House hit with $300M+ foreclosure suit

Thor’s Palmer House hit with $300M+ foreclosure suit
Sterling Bay CEO Andy Gloor and a rendering of facility (Sterling Bay/Gensler)

Sterling Bay plans 320K sf research lab at Lincoln Yards

Sterling Bay plans 320K sf research lab at Lincoln Yards

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.