Attempts to Save Block 37 from Chicago Foreclosures for Sale

by Peter Vernon on cities

An intervention has been made to save a retail development project from Chicago foreclosures for sale. The city of Chicago in Illinois has decided to intervene to save the Block 37 retail development project from foreclosure attempts of the Bank of America Corp.

In its Cook County Circuit Court filings, the city explained that according to the redevelopment agreement it signed with the development company, Joseph Freed and Associates LLC, it has the legal right to decide on what will happen to the retail project. The city sold the property to the developer in 2005.

According to industry experts, the goal of the local government is to make sure that the retail development project will be completed and for the public Pedway to push through with its scheduled opening next month.

Early last month, a group of lenders led by Bank of America filed foreclosure proceedings against the retail project. According to court filings, the group of lenders lost confidence on the retail developer, adding that the latter do not have the financial capacity anymore to finish the project. The bank made a move to place the project on Chicago foreclosures for sale to boost its case for a court-appointed receiver.

Bank of America argued that it would take as much as $42.6 million to complete the retail project, which is more than the total loan of Joseph Freed. When the bank filed a foreclosure case against the project last October 19, the estimated cost of completing the project was $34 million.

In its filings, the bank stated that lenders recognize that it would take a considerable investment to complete, open and lease the development project. It added that unlike the developer, the lenders have the financial capacity to complete the project.

Furthermore, the filings also detailed Bank of America’s dispute with the developer over a lease agreement with Muvico, an upscale movie theater. According to the bank, it continues to fund the construction of the movie theater.

In the court filings, the total cost of the development project is projected to hit around $341 million and by 2103, the annual net operating revenue will reach nearly $16.6 million provided that the development has stabilized.

Bank of America argued that it has the right to foreclose as well as request for a court-appointed receiver.