Developers Could Recover Major Infrastructure Costs Through Future Tax Revenues
A major mixed-use development planned along Chicago’s North Side is moving closer to securing more than $200 million in public infrastructure funding, marking a significant milestone for one of the city’s largest real estate projects.
The development, now known as Foundry Park, is expected to transform a more than 30-acre site previously referred to as Lincoln Yards. The project’s developers, JDL Development and Kayne Anderson Real Estate, are seeking financial support through Chicago’s tax-increment financing (TIF) program to help cover the cost of essential public infrastructure improvements.
According to documents prepared for the Community Development Commission, the proposed funding arrangement would allow the developers to initially finance infrastructure construction themselves, including roads, parks, intersections, and public spaces. They would later be reimbursed through future tax revenues generated within the project area.
The commission is scheduled to review and potentially endorse the proposal, which would then require final approval from the Chicago City Council.
Foundry Park is expected to represent approximately $3 billion in total investment and will feature a diverse mix of residential, commercial, and recreational uses. Current plans include more than 3,000 housing units consisting of apartments, condominiums, townhomes, and single-family residences. The development is also set to include office buildings, retail space, a hotel, public parks, and an extension of Chicago’s Riverwalk.
Under the proposed agreement, JDL Development and Kayne Anderson would invest roughly $235 million in infrastructure improvements. In return, they could recover up to $201.6 million through TIF-generated revenues produced by future development within the district.
The Community Development Commission’s vote would authorize the city’s planning department to negotiate a formal redevelopment agreement with the development team.
The site has a long history of redevelopment efforts. Previously, Chicago-based Sterling Bay planned a much larger $6 billion project for the property. However, after completing only a single life sciences office building, the company faced financial challenges that intensified during the COVID-19 pandemic.
A significant hurdle for the earlier proposal was the enormous cost of required infrastructure improvements, including new roads, bridges, and upgrades to the heavily congested intersection of Elston, Ashland, and Armitage avenues.
Following Sterling Bay’s financial difficulties, the northern section of the property was acquired by lender Bank OZK and later sold to JDL Development and Kayne Anderson for nearly $84 million.
Meanwhile, the southern portion of the former Lincoln Yards site was purchased by Novak Construction for approximately $34 million. Although the company has expanded its land holdings in the surrounding area, it has not yet revealed future development plans.
Local officials remain divided on infrastructure priorities. Alderman Scott Waguespack has supported a revised and smaller-scale infrastructure plan, arguing that Foundry Park’s reduced size compared to the original Lincoln Yards proposal requires fewer public improvements.
However, Alderman Brian Hopkins has continued to emphasize the need for substantial transportation upgrades to address long-standing traffic issues in the area. He has repeatedly stated that improved roads and bridges were among the key public benefits that originally justified support for redevelopment of the site.
According to the commission report, roadway improvements account for the largest share of the proposed TIF funding, totaling nearly $71 million. Additional funds would be allocated for site preparation, multiple public parks, and an extension of the popular 606 elevated recreational trail into the development.
Updated project renderings also showcase several green spaces and public parks planned throughout the community.
If all required approvals are obtained, construction on the first phase of Foundry Park could begin before the end of the year.
Although zoning approval for the development was granted by the City Council earlier this year, a separate council vote will still be necessary before the proposed TIF reimbursement package can move forward.
Source: Original reporting by Ryan Ori, CoStar News.
