Developer Sterling Bay wants to tear down a low-rise former office building on Chicago's North Side and replace it with 609 apartments, even as the firm scrambles for investors to rescue the neighboring $6 billion Lincoln Yards project.
Sterling Bay is seeking zoning approval to redevelop the roughly 2.2-acre site at 1840 N. Marcey St. with a 27-story, 315-unit tower and a 16-story, 294-unit building next to it, according to plans filed with the city. The proposal is scheduled to be formally introduced to Chicago’s City Council within the week.
The developer acquired the site for $17 million in 2019. The seller, logistics frm C.H. Robinson Worldwide, sold the single-story structure after moving into a new office building that Sterling Bay developed on what is now the northern edge of Lincoln Yards, one of the largest real estate projects ever undertaken in Chicago.
C.H. Robinson’s one-story former building is along the eastern edge of the 55-acre Lincoln Yards site, which runs along the Chicago River on the edge of the Lincoln Park and Bucktown residential neighborhoods. The structure at 1840 N. Marcey is just west of the Clybourn Avenue retail corridor.
The Marcey Street proposal follows two previous proposals in less than a year by Sterling Bay that already would bring hundreds of new apartments just outside the Lincoln Yards borders: a mass timber building at 2100 N. Southport Ave. and a traditional tower at 2031-2033 N. Kingsbury St.
Sterling Bay’s latest residential plan is being unveiled after the recent completion of the first building within Lincoln Yards, a life science building at 1229 W. Concord Place that has yet to sign any tenants, and in the wake of recent reports that the developer is trying to avert significant financial problems at Lincoln Yards.
The developer is pitching potential investors including the Chicago Teachers’ Pension Fund to invest billions of dollars in the project as existing investors and lenders including J.P. Morgan Asset Management and Lone Star Funds look to exit the project, Crain’s Chicago Business reported last month.
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 Chicago Mayor Lori Lightfoot for not supporting the project and causing slowdowns in permits and other approvals for aspects of the project including infrastructure improvements.
It is unclear how soon Sterling Bay plans to begin building any of the three proposed residential projects outside Lincoln Yards.
The firm did not immediately respond Friday to requests to comment from CoStar News.
Sterling Bay is best known for leading the redevelopment of the city’s former meatpacking district, Fulton Market, into one of the fastest-growing neighborhoods in the country.
The firm’s projects there included developing the global headquarters of McDonald’s and the Midwest headquarters of Google.