CHICAGOBUSINESS.COM | JUNE 12, 2023 | $3.50
Sterling Bay asks teachers to save Lincoln Yards
EQUITY I SOUTH SIDE ASPIRATIONS
PULLMAN’S PROGRESS HOLDS LESSONS Neighboring Far South Side communities are eager to replicate the historic area’s success. Can they pull it off? | PAGE 13
The North Side megaproject is just one financial pain point for the high-flying real estate developer
JOHN R. BOEHM
Kip Brown is among the Roseland residents wanting to see stepped-up investments in the Far South Side community.
Sterling Bay is trying to strike a deal with the Chicago Teachers’ Pension Fund to bail out Lincoln Yards, a move that could help jump-start the stalled North Side megadevelopment, inflict hefty losses on the original backers of the ambitious $6 billion project and offer the developer a lifeline amid a financial storm that threatens its control over major pieces of its high-profile local portfolio. With the real estate firm under growing pressure to raise money to recapitalize the 53-acre mixed-use campus planned along the Chicago River between Lincoln Park and Bucktown, the pension fund’s investment committee voted during a May 23 meeting to investigate an opportunity to become Sterling Bay’s primary financial partner on the development, according to a video of the public meeting and investor documents obtained by Crain’s. The pitch to the $12.1 billion
NATHAN MANDELL
BY DANNY ECKER
Sterling Bay CEO Andy Gloor speaks during a May 2 Crain’s Power Breakfast event. fund, as laid out during the meeting by Sterling Bay CEO Andy Gloor: Buy into Lincoln Yards at between $100 and $150 per square foot — potentially a more than $300 million commitment — to replace the project’s existing financial backers at steep discounts and help inject life into a stagnant development that could generate billions of dollars in new tax revenue for the city over the next couple of decades. The fundraising push comes as Sterling Bay grapples with See STERLING BAY on Page 22
McDonald’s franchisees push for more power A group representing about half of McDonald’s restaurant owners squares off over new performance standards, franchise renewals and spending mandates McDonald’s franchisees are making an unprecedented bid to alter the balance of power in their relationship with the Chicagobased hamburger giant. Leading the push is the National Owners Association, an independent franchisee advocacy group that launched about five years ago and represents roughly 1,000
of McDonald’s 2,000 franchisees. Advised by a well-known franchise lawyer, NOA is backing state legislation that gives franchisees more protection and is working to get the Federal Trade Commission to rewrite franchise rules in their favor. McDonald’s and its franchisees have always had their ups and downs, but experts say the latest faceoff goes deeper than familiar debates over new product of-
ferings and store upgrades. This time, franchisees are trying to gain more control in a partnership long dominated by the company. “It’s not just a menu or restaurant format topic,” said RJ Hottovy, head of analytical research at location analytics company Placer.ai. “This is a little bit more personal.”
BLOOMBERG
BY ALLY MAROTTI
See McDONALD’S on Page 20
VOL. 46, NO. 24 l COPYRIGHT 2023 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED
ONE CITY | 50 WARDS
THE TAKEAWAY
Ex-Chicago Inspector General Joe Ferguson explains the benefits of a city charter. PAGE 4
Marc Brooks on what sparked his entrepreneurial spirit. PAGE 6