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Skender Shuts Down Its Modular Factory On Chicago's Southwest Side

Bisnow's Chicago Construction & Development event on May 30, 2019, at Skender's modular housing manufacturing plant.

Hopes were high on May 28, 2019, when newly elected Chicago Mayor Lori Lightfoot helped cut the ribbon at Skender Manufacturing's modular plant on the city's Southwest Side. Company officials said their system would help revolutionize home construction, and soon steel frame units containing kitchens, bathrooms, sitting rooms and bedrooms started rolling off the assembly line, ready to be quickly assembled into homes.

But the company, a spinoff of Chicago-based general contractor Skender, was forced to shut down after hitting roadblocks, including the coronavirus pandemic, that dried up the financing needed to keep the factory humming, according to a report Thursday in Crain's Chicago Business.

“Really what it came down to was raising capital,” Skender Manufacturing CEO Mark Skender told Crain's. “Obviously, it was a tough decision, but I still believe in the business model. This is what the housing industry needs.”

By bringing most building activities into the factory rather than a traditional construction site, Skender officials said in 2019 they could cut costs by 15% and shorten construction time by 40%. 

Sterling Bay, the developer of the $6B Lincoln Yards project on Chicago's North Side, agreed last year to use the factory for 10 three-flats. Skender also caught the attention of city planners, who said modular construction could help ease Chicago's affordable crisis.

"The new Skender advanced manufacturing facility is a win-win for Chicago, generating job growth on the Southwest side while advancing a creative solution to address the affordable housing shortage,” Lightfoot said at the factory's opening.