JDL CEO Jim Letchinger Talks Plans For Foundry Park Megadevelopment

Five months ago, Foundry Park wasn't even a twinkle in JDL Development CEO Jim Letchinger's eye. 

The site, the northern portion of Sterling Bay’s former Lincoln Yards tract, was with the bank after that megadevelopment fell apart.

Now it is slated to be one of the city’s biggest and most anticipated projects, a $1B development with thousands of residential units and commercial, office and hotel space.

“It’s a 3,000-unit development that is going to be planned and approved in probably less than three to five months, which is amazing, and it is a very different plan than was there before,” Letchinger said at Bisnow’s Chicago State of the Market event. 

Letchinger said JDL only started working on the project in May and went to the city for the first time for a general conversation in July. He said the firm will submit the planned development for the site this week and credited the speed of the process to the city’s quick work. 

Part of the reason the deal closed quickly is that JDL started working on the development proposal with capital partner Kayne Anderson Real Estate in tow, Letchinger said. Usually, Letchinger comes to the closing table and hopes capital will show up, but this is the first deal he has done where the capital was along for the ride from the start.

JDL purchased the tract earlier in October from Bank OZK for about $84M after it had a rumored deal in the works for months. 

“This was a rare opportunity to actually buy what I consider one of the most incredible locations in the city at actually a pretty good price because it did go back to the bank,” Letchinger said.

The firm hopes to break ground on the first phase of the project, which is about 1.6M SF, as early as this time next year, Letchinger said. The developer needs to secure city approval for an amendment to the existing planned development on the site to begin construction. 

While there are tax increment financing funds available for the infrastructure work and parks, JDL won’t take public money to build its housing, Letchinger said.

Letchinger said the development will meet the city’s 20% affordable ordinance, but the way it will hit that target will vary. Some units will be on-site, and there will be a portion of the obligation met through payment to the city’s affordable housing program.  

“We're not asking for any assistance, any waiver,” Letchinger said. “I actually like paying into the program, because that money is needed to solve other problems.”

Letchinger said the biggest challenges for the project are the uncertain market conditions throughout the multiyear development process and longstanding hurdles in attracting capital to Chicago. He said Kayne is committed to building the first phase of the project with JDL, and his firm hopes to prove Kayne wants to keep going. 

There are 19 single-family lots on the site, and Letchinger said JDL is still working through how those will come to fruition. It may construct a home as a proof of concept and then decide whether to build the rest itself or sell the plots.

The northern and southern portions of the former Lincoln Yards lands are “really separate” entities, Letchinger said. Sterling Bay still owns the southern tract. At one point, JDL thought it needed the southern parcel to move forward on the deal, so the company pursued it.

But after the city didn’t have any issue separating the parcels and letting JDL move forward with just one, it moved its focus to the northern plot. That said, Letchinger left the door open to a possible deal in the future.

“If it becomes available, it’s something we'll look at,” he said. “We've got plenty here.”