The first phase of Lincoln Yards development is coming to an end


The best place to see Chicago from above is from the observation decks of what some still call the Sears and Hancock Buildings, but the most informative place for a view of the city is much closer to the action.

Last week, I was on the North Side, six flights up, at the invitation of developer Sterling Bay, who is completing the first building of his multi-year, likely multi-decade, development of Lincoln Yards.

Developer and contractor Power Construction was showcasing a commercial building it plans to complete early next year. This isn’t your typical desktop project. Called Ally, it’s for life science companies and will be the first new building at Lincoln Yards, Sterling Bay’s $6 billion proposal for land along the North Arm of the Chicago River.

High up in the Ally frame, you can look south and see the downtown towers heading towards you but away before Goose Island. To the north along the lake the towers rise again. All around you, in the foreground, are affluent residential areas as well as low-rise industrial buildings slated to become hip waterfront properties.

It is in this corridor northwest of downtown that the commercial city of Chicago will experience its next growth spurt, like it or not.

“We are filling the void,” said Suzet McKinney, manager of Sterling Bay, admiring the view. Its specialty is the commercialization of buildings for the life sciences. This concerns health and medical research companies, often start-ups, which have obtained an increasing share of venture capital. Sterling Bay follows that money by building housing to suit their needs.

“I think Chicago has all the key attributes to make it a growing and thriving life sciences market, except for ample lab space,” she said. At 328,000 square feet, Ally is also designed to appeal to today’s employees.

A rendering of the life sciences building called Ally, which is due to open early next year.

Each floor has an open-air terrace, in keeping with the demand for outdoor workspaces that the pandemic has intensified. With no neighboring skyscrapers, copious amounts of morning sunlight will pour onto the terraces. The building will have a landscaped plaza down to the river.

During our visit, Dan Fitzpatrick, Executive Superintendent of Power Construction, and Jessica Diffendal, Project Manager, explained that the building is extremely robust to eliminate vibrations that laboratories cannot tolerate. Ceilings are higher than most commercial offices, and the building’s electrical, plumbing, and HVAC systems are designed for heavy loads.

Adam Chodos, vice president of development services at Sterling Bay, said the labs also needed increased ventilation. Specifications for the $200 million building promise up to 12 air exchanges per hour, several times the rate of typical offices.

Ally, at 1229 W. Concord Place, occupies the southern end of the 53-acre Lincoln Yards site. McKinney said Sterling Bay was negotiating with several tenants but could not announce any yet. The developer has successfully filled a building in Lincoln Park with life science companies.

Construction costs for this type of building are 30% to 40% higher than other commercial structures, said Mark Burkemper, senior managing director at Chicago-based investor Harrison Street, a partner in Sterling Bay.

He said Harrison Street is bullish on life sciences because the technology has put the country at “the very beginning of a biotech revolution.” Chicago, he said, has attracted startups in the industry to locate here because of a lower cost of living than on the coast.

The construction of Ally also involves public improvements. It will be served by an extension of Concord Place, and long-term plans call for Sterling Bay to be reimbursed by the city for the bridges over Concord, Armitage Avenue and Throop Street.

This falls within Lincoln Yard’s $1.3 billion maximum allocation from tax increase funding, a huge and controversial set aside of public money that is hard for many people to grasp. The money is intended to improve access to Lincoln Yards, which needs to happen if it is to stop being an industrial area with few visitors.

Traffic on the main streets along the property is already bad during rush hour. McKinney said Sterling Bay is working with the city on redesigning the bottleneck where Armitage, Ashland and Elston avenues meet.

The next phase after Ally is next, what Sterling Bay calls The Steelyard. Planned for the next four years, it includes an office building – possibly for life sciences – a residential complex, a waterfront park, and a retail and entertainment center.

It will demonstrate whether Lincoln Yards can draw crowds while promising profound change and opportunity.

From this vantage point on the sixth floor, one can see The Hideout, a self-proclaimed “ordinary men” bar and music venue in a century-old house. The owners of the bar objected to elements of Lincoln Yards for fear of competition.

Now that development is underway, owners might change their minds. At first glance, Sterling Bay is building them a gold mine right outside their doorstep.

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