Sterling Bay, the developer behind dozens of projects in Chicago, launched a last-ditch effort earlier this month to secure City Council approval for a pair of apartment towers on the western edge of Lincoln Park, attempting an end-run around an alderman opposed to the project.
The company plans to try to bypass Ald. Scott Waguespack, 32nd, and take the project directly to the City Council, marking the first time a developer will use a 2022 zoning reform that ensures some builders get an up-or-down vote if local opposition delays approval.
It’s a challenge to Chicago’s long-standing custom of “aldermanic prerogative,” which typically gives local aldermen the final word on zoning decisions in their ward. The ad hoc tradition plays a powerful — yet controversial — role in determining which developments can proceed. Supporters of aldermanic prerogative say it ensures developers can’t ignore local concerns, while opponents say the custom can squelch needed development or even help maintain historic segregation.
The 2022 reform, known as the Connected Communities Ordinance, overhauled city zoning law and stands as one of former Mayor Lori Lightfoot’s legacies, and if Sterling Bay prevails it could put some limits on the tradition of aldermanic prerogative.
“We had seen too many examples of projects that never came to a vote,” said Marisa Novara, commissioner of Chicago’s Department of Housing for Lightfoot. “And to be clear, this doesn’t mean developments get automatic approvals; it just brings some democracy to the process by saying a vote is required.”
The $340 million Sterling Bay project was approved in June by the Plan Commission in an 11-1 vote over Waguespack’s objection. But it failed to win an endorsement from the Zoning Committee in December.
The project would involve constructing 16- and 21-story skyscrapers at 1840 N. Marcey St., near the CTA’s Red Line and sandwiched between the Bucktown neighborhood and the Clybourn Corridor retail district. The complex would have 615 apartments, 124 of which would be affordable.
“This has been a four-year endeavor, and we feel it’s time to move forward,” said Sterling Bay Managing Director Fred Krol, although the company would keep working with Waguespack to come up with a solution.
Waguespack did not return a call seeking comment, but in December released a statement pointing out that many members of local neighborhood organizations, including the Ranch Triangle Community Conservation Association, say the towers would be out of scale compared with the community’s mostly two- and three-story homes, and could cause more traffic headaches in an already congested area.
“Ranch Triangle Association supports residential development on that site, and we support affordable housing in our community because it’s great to have diversity,” said Erma Tranter, the association’s president. “We’re just asking Sterling Bay to reduce the height and density of the two towers.”
Many major developments require zoning changes, and Connected Communities reforms the way those changes are pursued. It expanded the definition of transit-oriented development, adjusted bike parking rules and established maximum parking for residential projects.
It also included a provision that allows developers proposing large amounts of affordable housing in high-cost, transit-rich areas such as Lincoln Park another way to secure approvals if they hit political roadblocks.
Ald. Walter Burnett, 27th, chair of the Zoning Committee, used a parliamentary maneuver in December to keep Sterling Bay’s proposal alive after members initially voted it down. Under Connected Communities, Sterling Bay needs to send an official notice to Burnett requesting another vote but can’t do so until April due to timelines specified in the ordinance. If a vote doesn’t occur in 60 days after that, the proposal is sent on to the full City Council.
Novara, now vice president of community impact at the Chicago Community Trust, said the 1840 N. Marcey St. project checks all the boxes for Connected Communities. If successful, Sterling Bay’s challenge could set a precedent, helping other developers build affordable units in neighborhoods low- to moderate-income residents might not otherwise be able to afford.
“Chicago is an extremely segregated city by race and income, and that’s why we should make decisions like this as a city,” Novara said.
Mayor Brandon Johnson downplayed the dispute with Waguespack, saying after the Plan Commission vote in June that “this is not some contentious, fake spat or rift between my presentation and others. This is about having a real conversation about how we have the vibrancy in this city so that we can recover.”
The last such high-profile clash between an administration and local alderman over a development occurred in 2021 when then-Mayor Lightfoot convinced City Council to approve a 297-unit project on the Far Northwest Side over the objection of Ald. Anthony Napolitano, 41st.
All developers using the Connected Communities ordinance must first hold at least one public meeting. Sterling Bay held its meeting Jan. 15 at 1840 N. Marcey St. in a vacant building that would be torn down to make way for the development.
More than 100 people showed up, and most of the crowd appeared to be in favor of the new development.
Krol gave credit to neighborhood groups such as Ranch Triangle for pushing the company to boost the percentage of affordable housing. Sterling Bay initially called for 15% of the units to be affordable, but by the time it went before the Plan Commission in June, the company had agreed to make 20% affordable.
Hitting the 20% benchmark means Sterling Bay could qualify for the state’s 2021 Affordable Illinois property tax reform, which secures deep assessment cuts and lower taxes for property owners if they keep units affordable.
In his December statement, Waguespack said that with city homeowners facing possible property tax increases, a tax cut for Sterling Bay might not be the best use of resources.
“This property tax break will reduce their property taxes by about $44.7 million that will be shifted to other property owners,” he said.
But Krol said at the meeting that without the proposed development, the property would generate $69 million in property taxes over 30 years, while a new 1840 N. Marcey St. would generate $248 million.
“I don’t know anyone in this room who would consider $248 million a giveaway,” he said.
Sterling Bay also agreed — in advance of the June Plan Commission — to slightly cut the height of both towers and reduce the number of parking spaces from 360 to 275, after negotiations with Waguespack and other neighbors.
But 275 is still far too many, Tranter said. Introducing hundreds of new cars will further choke Clybourn Avenue, already packed during rush hour, and nearby Cortland Street, often backed up for blocks throughout much of the day, she said.
“Marcey Street is only 21 feet wide, and traffic already gets pinched at the bridge over the river where it funnels down from two lanes to one,” Tranter said. “So, it’s not a sustainable development in any way.”
Luay Aboona, principal of KLOA, a traffic consultant advising Sterling Bay, said at the meeting the developer will include some minor upgrades to the neighborhood’s road infrastructure, such as improved sidewalks and crosswalks. But he added that what often clogs the surrounding streets are shoppers and drivers from outside the neighborhood.
“We understand the concerns, but (1840 N. Marcey’s) impact on Cortland will only be incremental,” he said. “It won’t be significant enough to make the roads worse than they are now.”
Krol also said significantly reducing the towers’ size wasn’t an option.
“We have looked at that and looked at that, and we simply can’t make the changes you’re talking about,” he said. “Ultimately, we have to convince a lender to finance the project, and we have to demonstrate that the project will be able to pay back a loan.”
Many attendees said the city needs more development to combat Chicago’s rising homelessness, and to raise the funds needed to sustain its falling credit rating.
“I’m grateful this project is moving forward,” said nearby resident Richard Day. “If we cannot build more housing in the city we’re screwed.”
Some speakers said the neighborhood was impossible to afford, especially for young residents. And the new ground-floor retail Sterling Bay wants to create at 1840 N. Marcey St. could give a much-needed jolt to the area’s stagnant shopping district.
“There have not been any changes during the last five years I’ve been living here,” said Joshua Chodor, a graduate student.
Others said Sterling Bay should build the proposed residential complex on its stalled $6 billion Lincoln Yards development site nearby along the North Branch of the Chicago River. The company unveiled Lincoln Yards six years ago, with plans for offices, retail, riverfront parks, massive improvements to the neighborhood’s transit infrastructure, entertainment venues and apartments, including skyscrapers of nearly 600 feet. But it has struggled to finance construction, leaving most of the land empty and the transit improvements undone.
Local resident Scott Nations said 1840 N. Marcey St. could be a buffer zone between the neighborhood and Lincoln Yards, with a smaller apartment complex instead of Lincoln Yards-sized buildings.
“This is out-of-scale with the two- and three-story buildings around it,” he said.
Krol said preparing the 53-acre Lincoln Yards for development is much trickier than 1840 N. Marcey St. The city did designate Lincoln Yards a tax increment financing district in 2019, but before the company can reap any benefits, it must spend hundreds of millions upfront to reconstruct the site’s infrastructure.
“The (1840) project is not being triggered by Lincoln Yards,” Krol said.
This isn’t the only apartment project Sterling Bay wants to build near Lincoln Yards. In May, the Plan Commission approved its plan for a 25-story, 355-unit building at 2033 N. Kingsbury St., two blocks north of the Marcey site in Ald. Brian Hopkins’ 2nd Ward. It was approved by City Council over the summer.
Tranter said conversations between the developer, neighborhood groups and Waguespack will continue.
“We want this project to be the best it can be, well thought out and sustainable,” she said.
