Joy Jordan fights Fulton Market landlord’s lawsuit over broken $170M deal
Dispute centers on $13M sale of development site poised to hold 17-story office tower
Joy Jordan is firing back at Fulton Market landlord Grey Bemis-Kelley. And she’s offering a glimpse into how the first-time developer’s plan to erect a $170 million office project during a rough stretch for the asset class went sideways.
In a dispute over a $13 million contract to buy the development site at 415-417 North Sangamon Street from a venture led by Bemis-Kelley, Jordan’s firm Fortem Voluntas is now blaming the seller for project delays that led to losing an equity partner and a construction lender.
In response to Bemis-Kelly’s suit filed in July that accused Fortem of failing to close and refusing to release $500,000 as a penalty, Fortem said the seller didn’t disclose a key fact about one of the two existing buildings on the site: that the city had designated it as a “character building.” That means the building is “difficult to impossible” to demolish without strong justification, Fortem Voluntas said in court filings. The designation led to Jordan being asked to restore or adaptively reuse the structures instead of knocking them down to build on fully vacant land.
“If Fortem had been informed of the Character Building status before or shortly after executing the contract, it would have either not entered into the contract or would have exercised its right to terminate the contract during the due diligence period,” Jordan’s firm said in a court filing.
The filing said the seller never disclosed such designation, despite being obligated to and despite the fact that its offerings and marketing materials on the site pitched it as a demolition.
Jordan’s firm’s countersuit also noted that the buyer selected the site over another potential property on the belief that the structures could be torn down. The seller was also required to turn over various city permits and documents that would have shown the building had the designation, but it did not, the filing also alleged.
Fortem said it had no trouble getting investors on board, but as delays dragged on, the market tightened and its construction lender, which isn’t named in the filing, eventually withdrew from the deal.
The original Bemis-Kelley suit alleges that it struck a purchase agreement with Fortem in March 2022, and modified it three times to extend the purchasing date and reduce the price, though Jordan’s firm never closed the deal. It is seeking $500,000 in earnest money that Fortem put in a title company since the deal fell through.
“Fortem Voluntas owes the money and its position is meritless,” a statement provided by the seller, said. The statement didn’t touch on the facts of the filing but did note that it has several motions pending against Fortem in the case.
Attorneys for Fortem didn’t respond to a request for comment.
After signing the initial contract, Fortem then found out independently about the character building designation and then had its initial plans for a new construction project rejected by Chicago’s Department of Planning and Development.
The developer went back to the department after revising its plans to include the building, and the approval process took an additional six months beyond Jordan’s original estimation.
The filing also claims that the seller extended leases for commercial tenants in the buildings, causing additional delays for the start of construction and violating the contract with Fortem.
The legal fight is being hashed out at a perilous time for office development and commercial lending in Chicago, where remote work has limited new office leases and some downtown towers sit half-vacant or worse, leading to record-low office vacancy of around 24 percent, according to brokerage data.
In its countersuit against Bemis-Kelley’s entity, Jordan’s Fortem is not only asking for the court to deny the seller’s request for its escrow money, but is also seeking unspecified damages and attorney’s fees.