Musa Tadros has agreed to sell a South Side shopping center out of bankruptcy after the property was damaged by riots that occurred in the wake of protests of the George Floyd killing.
A Tadros-led venture, Crown Commercial Real Estate and Development, settled with its lender over a $23 million loan in default that was tied to Chatham Village Square, located at 8500-8700 South Cottage Grove Avenue, by paying $20.5 million in sale proceeds to a servicer representing investors that own the debt, Crain’s reported.
The venture faced a foreclosure suit near the end of 2021, prompting it to file for bankruptcy protection five months later. Cook County Judge Janet Baer is set to rule in the bankruptcy case on May 31.
Tadros’ venture “has endured and overcome the unique challenges presented by COVID-19 and the stay-home orders and the unrest following the George Floyd protests, which sparked instances of full-blown riots which included significant damage to property, looting and in some instances the burning of buildings,” the filing said.
Chatham Village Square opened about a year later, after repairs were made. Tadros and the lender, a Bank of America trust for investors that own commercial mortgage-backed securities, then argued over $3 million in insurance proceeds for the property, the outlet reported.
After the sale, Tadros and the servicer representing the trust would be able to pay back most of the $23.3 million owed to the investors who own the debt.
Elsewhere in the South Side retail market, a landlord tied to Brazilian businessman Michael Klein is experiencing distress on a property called The Yards Plaza. The 261,000-square-foot shopping center in the Back of the Yards neighborhood property was hit with a foreclosure suit filed in December 2021 after racking up $25 million in debt, and a second lawsuit filed by Wilmington Trust as a guarantor of the loan claims Klein and his companies didn’t disclose the fact the retail asset was built on a landfill in 1990 and is experiencing related structural issues, including the building physically sinking.
— Quinn Donoghue
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