Overseas investors who funneled $50 million into a federal visas program used by a developer that owns a River North property are seething.
A group of Chinese nationals want Symmetry Property Development affiliates held in contempt of court after it agreed to a $28 million settlement to repay them and hasn’t done so despite its associates recently receiving large sums of money, according to court records.
The investors raised money through the federal EB-5 visa program, and then filed a class-action lawsuit against LLCs controlled by the firm, which is tied to Jeffrey Laytin and Jason Ding.
Back in 2017, Symmetry tried to sway Chicago officials to allow for a 60-story housing and hotel project at the northeast corner of Wabash and Superior streets. But they never received 42nd Ward Alderman Brendan Reilley’s blessing and lost momentum, and in 2021 agreed to return at least some money to investors who wanted to exit the project with a $28 million settlement.
Now, Ding and Laytin are trying to navigate their way out of bankruptcy court with a claim they can get a $45 million loan from a lender called Corban Capital to help pay off their debts and pursue a new Chicago development project on property adjacent to their original target, which is now within the recently redrawn Second Ward overseen by Alderman Brian Hopkins.
However, the Chinese investors have concerns about that plan, as do creditors, who are jousting over the firm’s disputed claim that the property is worth $58 million and able to safely secure yet another eight-figure loan despite currently being in foreclosure for a previous debt.
An entanglement of globe-spanning court cases involving Ding and Laytin illustrates the pitfalls of the visas-for-cash program created by Congress in 1992 that allows foreign nationals visas when they invest in certain U.S. business developments. It also exposes a string of maneuvers the real estate prospectors have made in a bid to hold onto assets, including cash raised from investors who are being strung along in developments that appear doomed.
The Chinese investors were already told once of Symmetry’s grand plans to repay them by securing $250 million in financing from an obscure Bahraini outfit, only to learn that offer Ding and Laytin were exploring turned out to be a sham that exhibited red flags, which should have been more thoroughly vetted by the men and their attorney, according to a judge and a Dubai investigator hired as a special master to probe the developer’s claims in the lawsuit.
Further, Hopkins hasn’t been approached by the developers, their attorney told The Real Deal.
“Throughout the Chicago project, Symmetry has been and will continue to work with the alderman and the city of Chicago to obtain approval of the final development plan,” a statement from the firm said. “Currently, Symmetry, however, does not plan to approach the alderman or the city for the final development plan until the bankruptcy matter and court judgments are resolved.”
Hopkins’ office didn’t return requests for comment. Ding, in a deposition last month, said his firm will have an easier path getting his reimagined proposal through the proper city channels, if it can find a way to reorganize in bankruptcy and pursue construction.
Symmetry entities that own the potential development site at Wabash and Superior — where a city landmarks panel labeled row houses on the property historical buildings, blocking any projects that would require their demolition — filed for bankruptcy in late May. The bankruptcy protection was sought a day before the site was scheduled to be sold via auction out of a lender’s foreclosure lawsuit.
The bankruptcy filing scuttled the foreclosure sale, and the landowners have since told the bankruptcy court they plan to resolve the matter by refinancing with Corban, court records show. The lender is also purportedly set to issue a separate, $37 million loan for a Hawaii development that Symmetry similarly raised tens of millions of dollars for from EB-5 but has so far failed to start building.
Meanwhile, the Chinese investors are accusing Ding and Laytin of ignoring a federal civil court’s order to have LLCs they control stop making “distributions” to the men, including from an account tied to a Gary, Indiana industrial property that’s also currently in foreclosure and in the control of a court-appointed receiver.
The Chinese investors discovered that from June 2022 to July 2023, payments totaling more than $1 million flowed between accounts controlled by Ding and Laytin that a judge demanded to stop making distributions to the men, their attorneys said in court filings. So the investors asked to hold a hearing on why Ding, Laytin and their attorney Daniel Hildebrand, along with another man, Peter Shirk, should not be held in contempt of court. They also raised concerns about monthly payments of $2,800 to Ding’s daughter Isabella as well as payments totaling nearly $39,000 made to Ding, Laytin and Shirk in July.
In a Friday response, Hildebrand wrote that the payments the investors cited didn’t violate the judge’s order because they weren’t “distributions” to Laytin or Ding. Instead, the payments were meant to be loans, advances or otherwise cover other business expenses, including Hildebrand’s legal fees.
Back in bankruptcy court, lenders who have a total of $43 million in judgments against the River North property are moving to have its appraisals at $58 million by professionals hired by Symmetry excluded from consideration by the court. Instead, the lenders — one of which is tied to Madison Realty Capital and had its takeover of the property through foreclosure canceled by the developer’s bankruptcy this summer — say it’s worth no more than $12.6 million.
An attorney for the Symmetry entity in the bankruptcy case declined to comment.
The lenders in court filings this month said they “contend that the Debtor’s chapter 11 case was filed in ‘bad faith,’ because … the pre-petition conduct of the Debtor has been improper, in that the Debtor failed to pay real estate taxes, failed to pay insurance, and a receiver was appointed; (and) the petition effectively allows the Debtor to evade court orders, because a foreclosure judgment and sale was to occur the day after the bankruptcy filing.”
Symmetry’s purported next lender Corban Capital, though, is willing to save the project and get the Madison affiliate paid off by extending $45 million in new credit secured by the property.
Like the Chicago project, Corban Capital is also ready to shell out $37 million to help revive a resort development in Hawaii that entities led by Ding and Laytin raised $24 million for through EB-5. But the developers have since faced a court case and arbitration with the investors after not getting started on that project, either.
“Symmetry worked with Corban Capital to arrange the financing for its last two loans for the Chicago property, as well as a loan for Symmetry’s project in Hawaii,” Symmetry said through its attorney. “Corban knows the project history well.”
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