Sterling Bay is pursuing as many as seven South Side projects in partnership with a local developer known for building a Whole Foods market in the heart of Englewood.
The prolific developer behind the 55-acre Lincoln Yards mega-project formed a joint venture with Leon Walker of DL3 Realty that has “about seven deals on the table down there,” Sterling Bay managing partner Keating Crown said during an event at the Illinois Institute of Technology on Tuesday.
“We’ll be part of the funding and part of the planning with [Walker], and then he’ll go and execute,” Crown said. “So we’re pretty close to announcing what the first couple of those deals will look like.”
Sterling Bay last month announced it would partner with DL3 to develop a five-acre lot at the corner of 67th Street and Wentworth Avenue in Englewood. Sterling Bay bought the land from the city’s Fleet and Facilities Management Department in 2017 as part of its $105 million deal to pick up an 18-acre portion of the future Lincoln Yards site.
Walker told The Real Deal earlier this month the venture is still studying the Englewood site to “see what’s appropriate there.”
“We want to see a mix of uses,” Walker said. “There are many things that have been talked about, but nothing has gelled yet.”
In addition to developing the Whole Foods and surrounding retail at 63rd and Halsted streets, DL3 recently helped build a new Jewel-Osco grocery store and plans to demolish and redevelop the Washington Park Bank building in Woodlawn. Walker also said this month his firm is under contract to buy and re-tool two recently-closed Target stores in Chatham and Morgan Park.
Also during the event Tuesday, hosted by the Ed Kaplan Family Institute at IIT, Crown and city planning department Commissioner David Reifman reflected on the years-long planning and approval process that culminated this month with the City Council’s vote to give up to $2.4 billion in tax increment financing to Lincoln Yards and Related Midwest’s The 78 mega-project.
Crown said the marathon zoning process was “pretty rough,” but he ticked off a list of neighborhood benefits he said have been “lost in the messaging over the past few months.” Those include 11 acres of planned green space, new traffic signals and a publicly-accessible riverwalk, all of which Sterling Bay plans to fund with $300 million off its own balance sheet.
Under a redevelopment agreement with the city, the firm also will be reimbursed with interest from the new Cortland/Chicago River TIF district for at least $490 million it spends on other infrastructure projects, including building three new bridges and reconfiguring the intersection of Elston, Armitage and Ashland avenues.
Last week, a coalition of labor and education groups filed a lawsuit calling the new TIF district “racially and ethnically discriminatory” because it siphons taxpayer dollars into a fund to build up an already wealthy part of the city.
Reifman, who oversaw creation of the new TIFs, said Tuesday capturing taxpayer dollars to add a new Red Line station near The 78 would pay off several times over.
“We have now connected the entire city to the site from Howard Street to potentially 130th street” if a long-promised south extension of the Red Line ever takes shape, Reifman said. “We’ve probably increased the development capacity of that site from, say, $1 billion or $1.5 billion to $6 or $7 billion, all through a transportation improvement.”