An unidentified lender from Bahrain has joined an ongoing legal battle over a site in Chicago’s River North.
New York developer Symmetry Property Development planned to build a 60-story condominium and hotel tower on the lot at the corner of Wabash Avenue and Superior Street, Crain’s Chicago Business reported. Almost 90 Chinese investors put up nearly $50 million to finance the project after it was first proposed in 2017.
The Chicago City Council never approved the development, however, and by November 2018, one of the investors filed a securities fraud lawsuit against Symmetry. The suit stemmed from concerns that the project would never actually break ground as Alderman Brendan Reilly, who represents the 42nd ward, made it clear that he would not support the development even if it was scaled down.
Symmetry finally agreed to return the money to the investors in November 2020, but they have still not received a single penny in return. The company’s attorney, Daniel Hildebrand of Greenberg Traurig, told U.S. Judge Charles Kocoras that a new $200 million loan from a Middle Eastern lender could finance the development as well as pay off the investors.
The money from the mysterious Bahraini lender has yet to make it to the U.S., however. According to Hildebrand, the deal is being held up by anti-money laundering requirements and other red tape.
Doug Litowitz, an attorney representing the Chinese investors, said Symmetry was required to pay the investors back by May 7. “[Symmetry] has said that the money is in their possession but has been tied up in a foreign country for 6 months,” Litowitz wrote in an email. “As a former hedge fund lawyer, I have never seen such a delay in a wire transfer.”
Litowitz is also skeptical that the loan is even real at this point as it would be very unusual for a developer to get such a large construction loan for a project that hasn’t been approved by the city.
Seeing as aldermen in Chicago have veto power over developments in their wards, the project is unlikely to get approval. Reilly used that veto power when the project was first proposed in 2017 and turned down a revised plan in 2019 as well.
“It’s a total mess,” Reilly said in 2019. “There is no real proposal, there are no next steps and there are no approvals pending for the foreseeable future.”
[Crain’s] — Victoria Pruitt