Sterling Bay has turned to the Chicago Teachers’ Pension Fund to help speed up Lincoln Yards at a critical juncture for a major development, a deal that could hurt the project’s initial investors if reached.
Progress on the $6 billion mixed-use project has been slow since it was approved in 2019. Now, the developer is seeking funding from the CTPF’s investment committee to launch Lincoln Yards, which could cost the original investors behind the audacious 53-acre, 14.5-acre site. – million square foot development, Crain’s Report.
Sterling Bay CEO Andy Gloor recently submitted a proposal to the council, suggesting an investment of $100 to $150 per square foot, totaling more than $300 million. That would replace current financial backers at a discount and revitalize projects that could generate billions in tax revenue for the city.
The developer hopes to consolidate ownership of the Lincoln Yards site, find a new capital partner and settle a $126 million mortgage associated with much of the property. While Sterling Bay is looking for new capital partners, it is also seeking additional funding from existing investors. The company aims to raise $25 million in new equity capital through “affiliate funds” from existing investors.
It would be a surprising collaboration if the CTFP ends up being a major financial partner, given the Chicago Teachers’ Union (whose members have been among Lincoln Square’s most vocal opponents) has a lot of influence over the CTFP.
In Gloor’s pitch, he said, “This is an incredible, generational opportunity to invest in the city,” calling it “the most significant deal we’ve ever done with Stirling Bay.” Media reports said.
Sterling Bay faces other financial pressures in its portfolio, including loan issues that could force the sale of Groupon’s headquarters building and the Prudential Plaza complex. But the financial pressure on Lincoln Yards as it prepares to transform the north side in the coming years marks the developer’s biggest challenge yet.
The involvement and support of new mayor Brandon Johnson—a former Chicago Public Schools teacher and CTU paid organizer—also remains to be seen, further clouding the future of the project.
— Quinn Donoghue
