Lenders are seizing the site of a failed River North high-rise project, adding another twist to a years-long saga that’s resulted in foreclosure and litigation.
A joint venture of New York-based Madison Realty Capital and Arena Investors will take control of the property at 42 and 44-46 East Superior Street, following a sheriff’s sale in which no bidder met the $7.5 million minimum, Crain’s reported.
The legal battle dates back to over three years ago, when lenders initiated foreclosure proceedings, alleging that the would-be developers — New York attorney Jeffrey Laytin and Chicago investor Jason Wei Ding — defaulted on a $22 million loan.
Layton and Ding wanted to build a 60-story condominium and hotel tower, but it never got off the ground due to numerous obstacles. Alderman Brendan Reilly opposed the project, and landmark status was given to the roughly 150-year old buildings, saving them from demolition.
Furthermore, a federal securities fraud lawsuit brought by 90 Chinese investors under the EB-5 program added to the developers’ woes. While about 50 of those investors reached a $27.5 million settlement agreement in 2020, Laytin and Ding haven’t paid it, and they deny any wrongdoing.
Two ventures associated with the property filed for bankruptcy last May, prolonging foreclosure, the outlet said.
Even though the buildings have a landmark designation, preservationists and tenants are still working to ensure that they remain intact. Bryan Sord, owner of the Sunny Side Up restaurant, at 42 East Superior, is exploring ways to buy the building from the lenders so that the restaurant can continue operating as normal.
“It’s time to really look at how we can engage these buildings once again,” Ward Miller, executive director of Preservation Chicago, told the outlet.