Andy Gloor’s Sterling Bay won’t be receiving the extra funding it sought from the Chicago Teachers’ Pension Fund, which would’ve helped kickstart the firm’s $6 billion Lincoln Yards megadevelopment.
In response to Sterling Bay’s proposal, suggesting a more than $300 million investment, the pension fund announced that it has “declined to take further action” in backing the 53-acre project between Lincoln Park and Bucktown, Crain’s reported.
“We are grateful for the chance to thoroughly evaluate this proposal,” CTPF board President Jeffery Blackwell told the outlet. “However, after careful deliberation, it became evident that the investment did not align seamlessly with the goals of our fund.”
The rejection arrives as Sterling Bay faces financial challenges for the stalled development. The company is actively seeking a new capital partner as its primary backers, JPMorgan Asset Management and Lone Star Funds, look to sell their stakes in the project at a discount due to mounting impatience with the development’s progress.
A Sterling Bay spokesperson said the firm is holding conversations with various interested parties for investment, financing and leasing at Lincoln Yards, emphasizing the firm’s commitment to the project’s advancement.
The firm had also pursued $25 million in new equity from existing investors to support the development.
For the teachers pension fund, its decision to pass on the Lincoln Yards investment also reinforces the stances many of its members have taken against the project since it began making its way through city government’s various approval channels years ago. The pension fund’s members were specifically opposed to the city creating the $1.3 billion tax-increment financing district meant to reimburse the developer for its work on new infrastructure required for Lincoln Yards.
But Sterling Bay has also been trying to rework that agreement and find a new financial partner to help it take on the costs up front before the city repays the firm.
Gloor previously blamed former Mayor Lori Lightfoot’s administration and the city’s sluggish approval process on a deal the company struck with another financial partner for impeding the infrastructure work. But Lightfoot refuted these claims, asserting that the developer had presented the city with a pre-negotiated deal that required governmental review.
— Quinn Donoghue
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