River City unit owners not complying with deconversion sale process, new lawsuits say

The suits are the latest legal salvo in a condo deconversion deal besieged by drama

Oct.October 15, 2018 02:30 PM

An aerial view of the River City at 800 South Wells Street (Credit: iStock)

The River City condo association lobbed the latest legal volley in the drama-filled deconversion of the South Loop building, accusing owners of multiple units of failing to comply with the sale process.

The association filed suits against at least 19 unit owners in the building, accusing them of failing to turn over documents needed to close on the sale. The unit owners’ reluctance to comply puts the deal in jeopardy as a Nov. 28 closing date looms, according to the lawsuits.

It is the latest legal controversy surrounding a deal that at one point was poised to be the biggest deconversion in city history.

Condo owners voted in June to approve the sale of the building for $90.5 million to Marc Realty Capital, but a lawsuit filed by unit owners in early October threatened to scuttle the deal.

The lawsuit accused the condo board of stuffing the ballot box to reach the state’s required 75 percent approval threshold to force a bulk sale of a condo building, and it also accused the board of helping Marc Realty make side deals with some owners to get their approval for the sale. The unit owners are seeking a temporary restraining order to halt the sale.

Now the condo board is asking a Cook County judge to require owners to comply with the sale process.

After the vote was held to approve the sale, the condo association began the process of obtaining the necessary documents to close on the deal. All unit owners were required to hand over a document verifying they had returned security deposits to renters, but a handful of them have refused, according to the lawsuits. In at least one case, a unit owner is accused of failing to turn over closing documents.

Failure to comply with the sale process has put the lives of other River City residents in “limbo” as they wait to see what happens with the deal, the lawsuits claim. The condo board is asking a judge to require the owners to comply with the sale and is also asking the courts to declare that each owner being sued is the true titled owner of its respective unit.

Lawyers for the condo board and the group of unit owners who sued the board did not immediately respond to requests for comment.

Marc Realty has sought to buy the River City complex since early 2016. The firm and condo owners initially agreed to a $100 million sale, but Marc Realty and partner Wolcott Group in May 2018 dropped their offer to $89 million, saying they discover costly needed repairs.

Owners rejected that price, and Marc Realty came back with a revised offer of $90.5 million that was approved this summer.

The River City deal highlights the complexities and emotions that can gum up condo deconversion deals, which have been all the rage in Chicago thanks to city’s hot rental market.

Related Articles

Alderman Brendan Reilly (Credit: iStock)

The Chicago condo deconversion craze is dying

Homewood Suites by Hilton Chicago at 1101 South Wabash Avenue, Best Western Grant Park Hotel at 1100 South Michigan Avenue and Warren de Haan, head of originations at Acore Capital

Two South Loop hotels get refinanced for $147M amid strong market

PepsiCo CEO Ramon Laguarta and WeWork CEO Adam Neumann with the Old Post Office (Credit: Getty Images)

Space race: WeWork, PepsiCo may take a combined 320K sf at 601W Companies’ Old Post Office

The top five most active multifamily general contracting firms were approved to build 3.7 million square feet of residential development over the last year.

These are the top multifamily general contractors in Chicago

Old Post Office and office brokers Allen Rogoway, David Burden and Lisa Davidson (Credit: Wikipedia)

Difference maker: Uber’s monster lease at 601 W Companies’ Old Post Office could transform local office market

City to redevelop land near 95th Red Line Station, Chicago’s slumping housing market gets slight reprieve: Daily digest

John Buck and Morgan Stanley want big payday for “Big Red,” former city development chief joins Clayco: Daily digest

500 Fulton Market apartment units planned, local construction industry struggles to find workers: Daily digest