The Real Deal Chicago

River City deconversion saga comes to an end as deal officially closes

Marc Realty and Wolcott Group plan extensive renovations to the South Loop complex now that the condos-to-apartments switch is complete
By Joe Ward | December 21, 2018 05:36PM

From left: Andrew Goodman, Jonathan Gordon, Ari Golson, and David Ruttenberg

The sale of the River City condominium complex to Marc Realty Capital and The Wolcott Group officially closed Friday afternoon, ending a years-long effort to orchestrate the biggest condo deconversion in the city’s history.

After years of negotiations and legal wrangling, the deal to sell and convert River City’s 449 units was finally reached in late November.

Marc Realty and Wolcott Group agreed to pay $90.5 million for the complex, making it the largest deconversion in city history after ESG Kullen backed out of its $112 million deal to buy 1400 North Lake Shore Drive earlier in December.

With the deal officially closed, the buyers are now turning to readying the building for its first tenants.

The new ownership group plans a full renovation of the building’s lobby and will add a new fitness center, co-working spaces, a dog run and gathering spaces, the companies said in a press release. The apartments will be modernized, and the group will renovate the more than 250,000 square feet of office and retail space in River City, 800 South Wells Street.

Renovations will begin early next year, with new residents moving in as early as March, the firms said.

“River City is an iconic building from visionary architect Bertrand Goldberg that offers residents a unique combination of city and river views,” Ari Golson, principal at The Wolcott Group, said in a statement. “We look forward to updating and modernizing the building while respecting the architect’s original vision for a live, work and play environment.”

The new River City apartment complex sits in a South Loop neighborhood that has seen a surge in multifamily development, including the neighboring Cooper at Southbank, a luxury rental building from Lendlese.

“This is an incredible opportunity to maximize the space to create experiences and daily conveniences for both the renters and the South Loop Community,” David Ruttenberg, partner at Marc Realty and managing partner at Ruttenberg Gordon Investments, said in a statement.

Marc Realty and The Wolcott Group have worked to acquire River City since early 2016.

In December 2016, condo owners in the building voted to approve a sale at $100 million. But in May 2018, Marc Realty and Wolcott lowered their offer to $89 million, saying they discovered costly repairs were needed. Owners rejected that offer, and the investors came back with a $90.5 million bid that was accepted in August.

Soon after the sale was approved through a vote by condo owners, lawsuits began threatening to put the deal on ice. On Oct. 3, a group of 20 condo owners sued the River City condo board, accusing it of stuffing the ballot box to win approval for the deal. In a separate legal action, the board filed lawsuits against unit owners who were not complying with the sale process by failing to turn over paperwork.

A judge later dismissed the claim that the vote was held improperly, and a court-ordered audit showed the tally was correct, said attorney Kelly Elmore, who represented the condo board. The suit against the unit owners was dropped after they began turning over the needed paperwork.

With the legal complaints settled, the two sides worked to close the deal by mid-December.

Marc Realty and Wolcott Group are partnering on the deal with Ruttenberg Gordon Investments and funds managed by Elliott Management Corporation. Luxury Living Chicago Realty will handle leasing of the complex.