A Spanish housing developer and partner are buying the massive South Works steel mill property on Chicago’s south lakefront, where the venture plans one of the biggest residential developments in the city’s history, with as many as 12,000 homes.
A joint venture between Barcelona Housing Systems and WELink has emerged as the winning bidder for the long-vacant site, which spans 430 acres from 79th Street to the Calumet River, according to people familiar with the property.
The venture agreed to buy the land from U.S. Steel, which put the parcel up for sale last summer after pulling the plug on a development proposal there conceived by Chicago developer McCaffery Interests.
The firms plan to develop the site in four phases of 3,000 homes each, according to the Barcelona Housing Systems website. The companies have developed a type of modular housing that’s inexpensive and affordable, a potential plus on Chicago’s South Side, where incomes are lower than they are in other parts of the city.
Yet a project of that size likely will cost billions of dollars and take many years, if not decades, to complete. And Barcelona Housing Systems and WELink will face numerous political and financial obstacles as they move ahead with such a large development.
McCaffery Interests split with U.S. Steel after working on its plan—which called for more than 13,000 homes, 17.5 million square feet of commercial space and a 1,500-slip marina—for nearly 12 years. It didn’t develop a single building.
U.S. Steel picked the Barcelona Housing Systems venture after whittling down its pool of bidders to a short list that included two other parties: Chinese developer Country Garden and a Chicago development group, according to people familiar with the process.
A sale price could not be determined. One person said the Pittsburgh-based steelmaker was seeking $55 million to $80 million for the property.
A representative in Barcelona Housing Systems’ San Francisco office did not immediately return a call, nor did a U.S. Steel spokeswoman. An executive at Cushman & Wakefield, the brokerage selling the property, also did not return a call.
Barcelona Housing Systems and WELink, which has offices in Great Britain and Hong Kong, have teamed up on other projects and are backed by China National Building Material, a huge Chinese conglomerate. The firms recently formed a venture to build 25,000 solar-powered homes by 2022.
The Chicago project will follow a concept based on the city of Barcelona, according to the Barcelona Housing Systems website. The plan will allow “the land use to be optimized for infrastructure and improving the quality of life; it will allow residents to enjoy this new 21st Century urban planning concept, with extensive green spaces, sustainable internal mobility, high use of renewable energies, common social areas, digital urban and community processes, urban vegetable gardens, etc.,” the site says.