Loop condo board election devolves to mudslinging amid Strategic’s stalled buyout

Deconversion attempt marks second purchase the firm has dragged out in a matter of months

Loop Condo Board Election Gets Ugly as Klor’s Buyout Stalls
200 North Dearborn (Google Maps, Getty)

Battle tactics such as name-calling typically reserved to election campaigns for public office has seeped into a Chicago condo board contest, as homeowners grapple with a contentious bulk sale of their building to the city’s biggest deconversion player.

The $96 million potential sale of the 310-unit building at 200 North Dearborn Street has been stalled for more than a year, and residents are stuck in oblivion.

The uncertainty of their future is fueling Lord of the Flies-style infighting among five owners running for two spots on the five-seat condo association’s board of directors. Two of the candidates are incumbents.

Plus, the condo board this summer filed lawsuits against holdout unit owners who have so far allegedly refused to sign closing documents despite a vote approving the deal. The cases are moving through Cook County court.

The saga is the latest fallout from buyer Strategic Properties of North America’s recently bungled attempts to take over individually owned condos to turn them into apartments all owned by the company, which has pulled off numerous bulk sales of other Chicago condo buildings in recent years.

In June, however, the condo board of a separate building in River North called Ontario Place backed out of a bulk buyout with Strategic, which is led by Yitzy Klor and Saul Kupperwasser. The firm had been trying to close the $190 million purchase for years. When it fell through, one condo owner at the time called the process “hell for the past three years.”

Strategic — which has offices in Skokie and Lakewood, New Jersey — didn’t respond to requests for comment, and neither did an attorney representing the men and the firm.

At 200 North Dearborn, a supermajority of condo owners voted in July 2022 to sell the building and all its units to Strategic Properties.

Buyers in the so-called deconversion deals must contend with hyperlocal political fights to get enough condo owners on board with a buyout offer. Owners who hold a cumulative 85 percent of a building’s value must vote in favor of a bulk sale for one to go through, at which point unit owners against selling their homes can no longer stop the sale.

Since the Dearborn Street deal gained approval from that threshold of owners, it has been mired in delays. And residents, both those who voted in favor of the sale and against it, are frustrated with their potential buyer, the law firm representing their board and now each other.

Condo owner Alonya Udartseva said at this point, she doesn’t care if the sale goes through or not. But she wants the board to either back out or put pressure on the buyer to close the deal because the pending sale prohibits her from selling her condo individually.

“Something needs to happen. I cannot be in limbo anymore,” Udartseva said.

Sign Up for the undefined Newsletter

If new board members are elected, they could change course on the deal.

Five owners are running for the two spots on the condo board that are up for election. In recent posts in the condo’s private Facebook group, a couple candidates made their pitch for moving the sale forward. Others propose finding ways to back out altogether.

It’s a lot of pressure on a body typically tasked with more basic responsibilities, such as budgeting for basic building maintenance, said David Bloomberg, a Chicago-based attorney who has represented condo boards in similar transactions. It doesn’t help that hundreds of condo owners are unlikely to agree on the same path forward, he added.

“The boards have way too much control over this process,” he said. “And there is way too much room for buyers to come in and use shark tactics on them to sell.”

He’s been pushing for the state legislature to pass laws that would require more transparency from potential buyers.

Seventeen months of waiting for definitive action on the sale has sown distrust among unit owners both with the buyer and between fellow condo owners. Some of those who were never in favor of selling the building in the first place are lobbing insults at those who initially voted yes, even if they’ve since expressed regret.

“There are no friendships in the building. Nobody knows each other,” Udartseva said. “A lot of units are investment properties, a lot of units are not occupied by the owners and we don’t have any social gatherings. … It’s tricky to really get to know the candidates.”

One candidate for the board, Jon Taylor, said he wants to get elected to move the process forward by, for instance, imposing deadlines the buyers must meet to close, or by backing out of the sale altogether. Once a vocal supporter of Strategic’s offer, Taylor has faced ire from fellow condo owners who have opposed the sale from the beginning.

A lack of consistent communication from the buyers and the board has led condo owners to be distrustful of everyone involved, he said.

“The more silence there is, the more you let your imagination run wild and it’s causing suspicion.  Then you get infighting, conspiracy theories and frustration,” Taylor said. “It can be nasty at times.”

As the condo board sued two owners for refusing to sell their units earlier this year, some other owners blamed the holdouts for delaying the sale. Other owners questioned if one of the holdouts was defying Strategic or secretly working with the buyer to divert attention from the fact that the firm might be struggling to secure financing. Another called the comment speculation.

One defendant declined to comment and the other couldn’t be reached.

When the board hosts its election Dec. 13, condo owners will find out if accusations from the past few months will cost any candidates a spot on the board. And Strategic may have a tougher path forward to avoid a second failed conversion in less than a year.