A longtime Chicago construction executive is under contract to buy the southern portion of Lincoln Yards, the stalled megadevelopment on the city’s North Side, as another development team moves forward with plans for a huge, residential-focused project to the north.
John Novak said he has a contract to buy more than 18 acres of land along the Chicago River from Sterling Bay and J.P. Morgan Asset Management. An affiliate of his firm, Novak Construction, already has put down earnest money with plans to complete the purchase within about 10 days, Novak told CoStar News.
He declined to comment on the price.
It remains to be seen what Novak will do with the property, but the deal brings another new twist to a site where one of the most ambitious real estate projects ever drawn up in the city landed zoning approval in 2019.
Sterling Bay spent years, and hundreds of millions of dollars, assembling the land and securing zoning for 14.5 million square feet of mixed-use space in a project that had been expected to cost $6 billion to complete.
Aside from completing one life science research and office building at the south end of the site, the project has been stalled in recent years amid high construction and borrowing costs and challenges overcoming costly obligations to fund infrastructure improvements in the high-traffic area of the city.
Earlier this year, Sterling Bay and its development partner on the northern end of the site, Lone Star Funds, surrendered that land to lender Bank OZK.
Novak’s plans to buy the south end of the site, first reported by The Real Deal Chicago, are emerging just as two other firms — JDL Development and Kayne Anderson Real Estate — are requesting a zoning change for the larger northern piece.
More than 3,700 residences are proposed in that zoning application, including 400 that Sterling Bay would build on land it still owns along the far northern end of the site.
The northern portion of the site was sold by Bank OZK for almost $84 million.
JDL and Kayne Anderson also previously were in talks to buy the southern portion of Lincoln Yards, but they never completed a deal.
In an emailed statement, a Sterling Bay spokesperson neither confirmed nor denied a deal to sell the property to Novak.
“The Lincoln Yards South property remains a huge opportunity, and we are interested in seeing it succeed,” the statement said.
J.P. Morgan Asset Management declined to comment.
Largest project yet
Novak has owned a property near Lincoln Yards, the former Stanley’s Fresh Fruits & Vegetables site at 1548 to 1558 N. Elston Ave., since 2020. After buying the property, Novak demolished the longtime produce market building to clear the site for an eventual redevelopment.
Novak is mostly known as a contractor, but he also has developed projects such as Whole Foods and Target stores on the North Side. Novak Construction’s development arm also redeveloped a former Sears store in the Portage Park neighborhood into 206 apartments.
Taking over Lincoln Yards will be Novak’s largest development project to date.
Novak said he wants to talk with city officials as it formulates a long-term plan. He said it could be similar to what JDL and Kayne Anderson envision, with a mix of multifamily units, single-family homes and retail.
“We just think it’s a great piece of property in a wonderful city,” Novak said. “I just felt the timing was right to get involved in it. We’re going to do less than what Sterling Bay planned to, and we’d like it to be in sync with and complementary to what JDL is doing on the north side of the property.”