Developer Sterling Bay is turning over a portion of its $6 billion Lincoln Yards project to one of its lenders, further stalling the megadevelopment that’s struggled to build momentum since its 2019 approval.Sterling Bay CEO Andy Gloor told investors in a letter last week that it would transfer th e northern end of the 53-acre Lincoln Yards project to Bank OZK, based in Little Rock, Arkansas.The lender said in a statement that the deal is taking place after the bank last year placed Sterling Bay's loan on non-accrual status and two write-down notices in anticipation of the successful recapitalization of the project. A write-down refers to an asset's value diminishing. Sterling Bay declined to comment outside of what was stated in its investor letter. The company wouldn't share details on how the land transfer with Bank OZK will impact the future of Lincoln Yards, except that its vision for the site "remains strong." Gloor said in his letter to investors on Friday: "While this is an unfortunate pause in the development, all parties involved remain committed to the transformative vision of Lincoln Yards. Like cities across the country, the Chicago commercial real estate market is facing unprecedented pressures that are preventing the financing of projects at every scale and inhibiting the economic opportunities these projects bring."Details of the letter were first reported by Crain’s Chicago Business on Friday.Lincoln Yards — billed as a connector of Bucktown, Lincoln Park and Wicker Park — was approved under former Mayor Rahm Emanuel in March 2019. But the COVID-19 pandemic upended the real estate market, and it took until 2021 for Sterling Bay to break ground on the first Lincoln Yards building. But the $200 million life sciences building called Ally, at 1229 W. Concord Place, is currently vacant, according to Crain's. Related Lincoln Yards opens gateway for Chicago’s growth A spokeswoman for Bank OZK said the loan for Sterling Bay's project was classified “for some time” — meaning it was deemed as a high-risk loan that could default and result in losses. “As appropriate, we will commence efforts to patiently market this property to a new sponsor with sufficient capital and development expertise to achieve its significant potential,” Bank OZK’s Chief Communications Officer Michelle Rossow said in a statement to the Sun-Times.Gloor said in his letter, “There remains great interest in Lincoln Yards, and we will continue to work with our partners to recapitalize the project and navigate the current industry headwinds. Right now, that timeline requires patience and resolve, both of which we firmly have.”Meanwhile, Sterling Bay is marching ahead with other projects, including one near Lincoln Yards at 1840 N. Marcey St. The Marcey project would bring more than 100 units of affordable housing to Lincoln Park. The two-building project would have 615 total units and include retail and green space.The developer is attempting to trigger a provision in the city’s Connected Communities Ordinance to give its 1804 N Marcey project automatic approval by the zoning committee and move it to a full City Council vote. The project was previously rejected by the city’s Zoning Committee and missed a full City Council vote in December.Earlier this month, Sterling Bay won approval from the city's Plan Commission for a 573-unit residential tower at 350 N. Morgan St. The developer previously planned to develop a creative office building at the site, but market conditions and a growing population in the West Loop led to a switch to residential. Related Developer Sterling Bay lands initial approvals for Fulton Market apartment tower ...read more read less