Time’s up for Ganesan Visvabharthy’s development firm in Villa Park.
The Burr Ridge-based developer’s firm Hawthorne World received permission from Villa Park officials three years ago to build a 348-unit apartment complex set to cost at least $120 million, but it’s now on track to lose the land to its lender, according to court records.
Miami-based bridge lender Vaster sued in August seeking to foreclose on the $3 million mortgage tied to Hawthorne’s vacant land next to the Metra passenger rail tracks in Villa Park, a western suburb of Chicago, public records show.
The suit also reveals that contractors have filed more than $400,000-worth of mechanic’s liens alleging they’ve gone unpaid for pre-construction work on the property.
Villa Park officials are hopeful the lender’s attempt to seize the property draws in a new development effort, as they’ve grown frustrated with the lack of progress on the site.
“We aren’t happy with the way things have been going,” Village Administrator Matt Harline said.
The dispute broke out over the $3 million loan Vaster issued to Visvabharthy’s company after the developer stopped paying interest on the debt last December, and it hasn’t paid down any of the principal, either, the suit claims. The developer has been seeking financing for years, after initially obtaining a commitment of $100 million from a bank only to have the bank withdraw its plans to fund the project, according to public records and Harline.
At a May meeting with village trustees, Visvabharthy insisted he would fix the issues and move forward with the project, which calls for a six-story building and more than 15,000 square feet of retail space.
“I’m not a quitter, and I will not quit,” said the 75-year-old Visvabharthy, whose firm specializes in environmentally friendly “net-zero” development.
Its signature project has been the acquisition and conversion of the century-old former Standard Oil headquarters at 910 South Michigan Avenue in Chicago from office space into condos, a $75 million project.
Visvabharthy didn’t return requests for comment and neither did an attorney for Vaster.
The project has been controversial among village residents, some of whom regret the local government decision to allow the demolition of a small retail strip center to make way for the project.
It flamed out despite suburban Chicago’s strong multifamily market, with large apartment complex sales in recent months outperforming such deals in the city’s urban core, where sellers have more frequently taken losses. Suburban Chicago was tied with Miami as the U.S. market with the greatest demand from renters in a September study by RentCafe.
Another multifamily player, Osso Capital, is moving ahead with a Villa Park project in another area of town that will consist of 238 apartments, and it’s expected to finalize a development agreement with the village before the end of the year, Harline said. Osso is building the project, called The Union, adjacent to the Ovaltine Court apartment complex, which it bought last year for $73 million.
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