Nightclub bosses spar over Chicago real estate portfolio

Nick Karounos wants to make clear that he’s the frontman among his band of Chicago festival influencers-turned-real estate investors.

The co-owner of some of the most popular nightclubs and live-event venues in the Windy City sued fellow entertainment scene kingpin Lucas King, one of Karounos’ partners in properties such as the club PRYSM near Goose Island and Concord Music Hall in Logan Square.

Karounos alleges that King has failed to keep up with the additional investment required to hold onto the stake each has had in a property at 1719 South Clinton Street, a six-story office building in the East Pilsen area that holds a recording studio and other businesses, along with 15,000 square feet that’s vacant and being marketed for lease.

The suit, filed last month in Cook County court, shows the co-owners of the clubs had a falling out at other properties they owned and operated together in recent years. In addition to jointly owning the real estate where PRYSM is located at 1543 North Kingsbury Street, they also operated The Mid dance music venue in Fulton Market together before it closed in 2019. That property was redeveloped into the 18-story 800 Fulton office building by Thor Equities.

Their disputes started in 2019 and remained out of the press as they restructured the ownership interests in several properties they owned together through swaps of their equity that occurred privately, according to Karounos’ court filing.

Since those exchanges, however, the “animosity between King and Karounos increased and ultimately resulted in multiple lawsuits between King and Karounos regarding the management and operations” of their businesses, the lawsuit said.

Neither King nor his attorneys responded to requests for comment, nor did Karounos and his attorney. A person who fields inquiries for PRYSM replied via text message to a request for comment from the men, who each had a stake in the club asset, that King is not an owner of PRYSM, despite his name appearing on the most recent mortgage recorded on the property.

Indeed, there’s a yearslong trail of litigation in Cook County court involving the two men suing each other over the various ownership interests in several properties across the city, including the Concord Music Hall in Logan Square at 2051 North Milwaukee Avenue and the former nightclub called Koncrete at 1675 North Elston Avenue. The latter was shut down in 2015 after a fight that started in the venue and ended with a  21-year-old woman being killed by gunfire as the brawl spilled outside the building.

Karounos has accused King of declining to participate in business activities since 2019. He’s asking a judge to remove King as a member of the LLC that controls the Clinton Street property.

King, however, is pursuing his own legal case against Karounos. King last year filed a lawsuit against Karounos over the lease that a company Karounos controls and uses to rent the Concord Music Hall property in Logan Square from the property’s ownership entity, which is controlled jointly by King and Karounos.

King alleges his partner at that property delayed obtaining a liquor license for nearly a year starting in 2019 so Karounos wouldn’t have to start paying the more than $15,000 monthly rent   right away.

King claims Karounos and another investor in the property tried to improperly remove King from the Logan Square landlord entity and “[froze] King out of the company’s day-to-day affairs,” the lawsuit said.

Karounos has responded to King’s suit and denied wrongdoing in the most serious claims made against him. Their dispute over the former Koncrete property in Bucktown is being hashed out in arbitration currently, public records show. 

The other cases remain pending in Cook County court.