Felonious developer is ordered to pay Sullivan Center investors

A judge has ordered convicted developer Laurance Freed to pay his former investors $2 million as part of a 2016 sale of the Sullivan Center office and retail building in the Loop.

The three former executives of the now defunct Joseph Freed & Associates — Norris Eber, David Kirshenbaum and Al O’Donnell — were also investors, who along with Freed owned a minority stake in the massive Sullivan Center. They charged that Freed funneled the money from the sale for his own personal benefit, according to Crain’s. They sued him in 2017, and last week a Cook County judge ordered that he return the money, according to the report.

Last month, a federal judge reduced Freed’s 3-year prison sentence for fraud to probation — stemming from a separate 2016 conviction — and he was released. He was deemed to be at risk to Covid-19 infection, Crain’s reported.

In 2016, Madison Capital and private equity shop KKR paid $267 million for the Sullivan Center at 1 South State Street. The historic building, which has 833,000 square feet of office space, was the longtime flagship location of the Carson Pirie Scott department store. Freed redeveloped its lower floors, which now house a 124,000-square-foot Target location.

Two years ago, 601W Companies acquired the office portion for $178 million. Freed’s sister also sued him, in 2014, over the Sullivan Center, which was later settled.

He still faces another legal challenge, over his alleged mismanagement of a company that owns a stake in the Vic Theatre. Freed — who developed the downtown shopping mall Block 37 before losing it in foreclosure — is being sued by David Kirshenbaum, a partner in Freed Vic LLC, which owns a stake in the 1,000-seat Lakeview theater. Kirshenbaum is also a former exec at Joseph Freed & Associates. [Crain’s] — Alexi Friedman