Lawsuit leaves $184 million Loop office-to-resi conversion in limbo

Cook County Judge James Hanlon is rejecting a joint venture of Marc Calabria and Chicago-based Primera Group’s attempts to throw out a lawsuit that accuses them of effectively stealing a development plan.

The lawsuit concerns a $184 million office-to-residential conversion plan at 105 West Adams Street. Chicago-based Celadon Partners and Blackwood Group, who were short-listed by city officials to be one of the few development teams eligible to win taxpayer subsidies for an office-to-residential conversion of the Art Deco building, according to Crain’s. Celadon and Blackwood seek $15 million in damages, and are still considering pursuing the 400-apartment LaSalle Street Reimagined-affiliated redevelopment.

The Celadon and Blackwood venture tapped Primera principal Gabriel Martinez to buy the property on behalf of the pair, and hold it for them while they went about the process to gain city approvals. Celadon and Blackwood allege that Martinez violated a written agreement by recruiting Calabria to help buy the building and redevelop it themselves. Last year, the Chicago City Council approved almost $68 million in tax-increment financing for the redevelopment proposal.

Hanlon stated that Celadon and Blackwood raised valid issues in the fields of fraudulent misrepresentation and breach of agreement. Claims of tortious interference with business expectancy and unjust enrichment were dismissed without prejudice, and the plaintiffs’ attorneys will have time to file an amended complaint.

The ongoing legal proceedings leave the office-to-residential conversion in limbo at a time when the Loop is undergoing a needed restoration. Pandemic era hybrid schedules have gutted the value and tenants list at some of Downtown Chicago’s most important buildings. Efforts from developers are focused on pivoting vacant office space to either residences, hotels or retail space, or upgrading their amenities to entice high-profile tenants. Other buildings in the area are being sold at steep discounts, up to 75 percent in several cases.

— Hunter Cooke