CHICAGOBUSINESS.COM I AUGUST 14, 2023
Sterling Bay seeks a thaw at City Hall
Melody Winston, senior executive at Living Fresh Market
After a frosty relationship with Lightfoot, the firm hopes Johnson will help reignite Lincoln Yards
GEOFFREY BLACK
By Justin Laurence
A TOUGH MARKET FOR
SUPERMARKETS On the South and West sides, retail grocers struggle to make a profit while neighborhoods struggle to attract palatable options I PAGE 13
As it works to jump-start the stalled $6 billion Lincoln Yards project, developer Sterling Bay is hoping newly elected Mayor Brandon Johnson will be more accommodating than his predecessor was. Stronger support from the fifth floor of City Hall could be the difference-maker in Sterling Bay’s efforts to finance critical infrastructure improvements for the ambitious redevelopment of 53 acres along the Chicago River between Lincoln Park and Bucktown. In 2019, the developer agreed to front the costs of nearly half a billion dollars in essential infrastructure work to improve the site and link it to surrounding neighborhoods. Those costs would be repaid from a $1.3 billion tax-increment financing district approved after a contentious City Hall fight just a month before former Mayor Lori Lightfoot took office. In a statement, Sterling Bay says it “took on the responsibility of the municipality by both fi-
nancing and building” the infrastructure because the city, under former mayors Rahm Emanuel and Lightfoot, was “unwilling” to build it itself. “Developers almost never fund construction of infrastructure out of pocket,” the statement adds. Yet four years later, Sterling Bay has been unable to raise the upfront capital to fund the roadwork. As a result, it’s behind the estimated schedule for the improvements outlined in a redevelopment agreement, or RDA, with the city. Projections in the RDA called for Sterling Bay to complete work on a bridge connecting the northern and southern portions of the site and several key streets throughout the development by the end of 2022. The extension of The 606 trail and a complicated realignment of Elston Avenue were meant to begin last year. While some prep work and studies have been conducted, construction of those critical projects has not begun. See STERLING BAY on Page 22
Cost of cash is extra painful for privately held banks By Steve Daniels
Banks’ cost of cash has risen so dramatically in the past year that many are seeing the money they earn on loans and other assets drop despite substantial loan growth. The issue is particularly acute for privately held community banks, even the largest ones in the market, which generate income almost entirely by collecting deposits and making loans.
Exacerbating the issue for them is their shortage of capitalraising alternatives, unlike their publicly traded peers. Even the age-old answer to such quandaries — selling to a bigger rival — is off the table for many because their investment portfolios are littered with unrealized losses on long-term bonds they bought when interest rates were low. Selling would mean having to account for those losses, which would meaningfully
lower any takeout price. Dealmaking in the Chicago market — and most other markets — has been practically nonexistent this year. Highland Park-based First Bank Chicago is a case in point. With $2.2 billion in assets, it’s one of the area’s largest privately held banks. In the first six months of 2023, its interest expense — mainly interest paid on deposits See BANKS on Page 21
With $2.2 billion in assets, Highland Park-based First Bank Chicago is one of the area’s largest privately held banks. I GOOGLE
VOL. 46, NO. 32 l COPYRIGHT 2023 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED
GREG HINZ The upcoming race to replace Kim Foxx will be a referendum on her legacy.
REAL ESTATE A colorful Victorian in Elgin is for sale for only the second time in 134 years.
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