Foundry Park, a developer’s $3 billion replacement for the failed Lincoln Yards mega-project on the North Side, moved closer to reality Tuesday over the objections of a powerful union.
The City Council’s Finance Committee signed off on Mayor Brandon Johnson’s plan for a $201.6 million tax increment financing (TIF) subsidy that would pave the way for JDL Development to start construction of Phase One of the scaled-down project “before the end of the year.”
It passed by voice vote, without a roll call.
Before the vote, representatives for Unite Here Local 1 urged the Finance Committee to withhold the city subsidy until there’s a guarantee of union jobs at a 200,000 square foot hotel planned for the site.
Foundry Park developer Jim Letchinger told the Finance Committee he’s a “strong believer in Chicago unions” and has had conversations with Unite Here. But, Letchinger said he “can’t make any commitments” because he is not a hotel operator and hasn’t chosen one yet.
“Once we get it financed, discussions can take place,” Letchinger said.
Downtown Ald. Brendan Reilly (42nd) told the developer: “This is a union town. It is very important to myself and others that we do right by folks who work in these properties.”
Letchinger said he has “zero doubt” about his ability to deliver “everything that I’ve promised” with the help of the subsidy.
“We are promising to build parks, to build a riverwalk, to improve the existing roadwork. We have a pedestrian and bike bridge to connect the 606 if and when it arrives at our site. That’s what we’ve committed to do. That’s what we’re going to do,” Letchinger told the Sun-Times Tuesday.
“The more we build, the more money will be available for other [infrastructure] projects. If we don’t start building anything, there’s no money.”
In 2018, then-Mayor Rahm Emanuel proposed a $1.3 billion subsidy for the North Side mega-project known as Lincoln Yards that became a political lightning rod for the Chicago Teachers Union, and a symbol of Emanuel’s pro-business priorities.
The massive subsidy pledge was not enough to save Lincoln Yards. The mega-project on prime industrial land along the Chicago River collapsed under pressure from rising interest rates and slow demand exacerbated by the pandemic.
The $201.6 million TIF subsidy approved Tuesday pales by comparison to the assistance Emanuel promised to Lincoln Yards. It will support just over 25% of the $800 million worth of roads, bridges, utilities and mass transit improvements Ald. Brian Hopkins (2nd) has said were mandated as part of the Lincoln Yards plan.
Hopkins helped muscle the Lincoln Yards subsidy through the City Council before losing the project to Ald. Scott Waguespack (32nd) in the new ward map.
Letchinger has acknowledged there is “other infrastructure that the neighborhood would like to see done that is not possible right now.” That includes another bridge crossing over the Chicago River and a realignment of Elston Avenue, which Letchinger called a “massive undertaking” complicated by cost and property control that no private developer can accomplish.
The same goes for the 606 extension, which is “up to the county and the city,” the developer said.
“If they are able to extend it to our property, we will then take it across the river and continue it in front of our property. But they have to get it over to us first,” Letchinger said.
Waguespack said much of the reduced subsidy will be used to redesign and rebuild local streets like Southport and Cortland that, for decades, were closed to accommodate companies like Finkl Steel.
“There were no modern sewer systems. There were no modern roads. So we have to reopen everything, rebuild everything, put in lighting and remove a lot of rail,” Waguespack said. “The public gets streets and roads that are actually passable. If you go through there now, it’s all ground-down rail and you can’t really get through there without almost like a four-wheel drive” vehicle.
There will be “at least half a dozen pocket parks” and walkways that Waguespack said will pave the way for “the whole riverfront to become a 60-foot riverfront setback.
“In the Lincoln Yards plan, they kept it at 30 feet” of riverfront space, he said. “We doubled it so there are kayak launches and areas where people can relax along the river.”
Letchinger’s plan for roughly 34 vacant acres of the site calls for up to 3,737 residences, 20% of them designated as affordable to comply with the city’s set-aside rules.
The new design includes low- to mid-rise buildings, some for offices, grouped near open space and riverfront access. Buildings would get ground-floor retail, and one is slated as a boutique hotel.
Waguespack embraced the project’s lower density and dramatically reduced subsidy.
“This will get the project built, and it’s not focused on mega-projects that I don’t think many believed would come to fruition,” Waguespack said.
Lincoln Yards developer Sterling Bay “wanted a massive Elston-Armitage intersection with a new bridge over Ashland Avenue,” but Waguespack said “a lot of what they were saying with the new Metra station was never going to come to fruition. The TIF would have never been able to pay for it.”
Waguespack said the $201.6 million subsidy will cover “basic infrastructure” and “no private costs.”
“Under the Sterling Bay deal, they could get reimbursed for all of their legal costs and marketing and they wanted that money in the millions. That’s not happening in this,” he said.