Block 37 Gets Served With Foreclosure Suit
By Marcus Gilmer in News on Oct 20, 2009 5:40PM
The roller coaster that is the prolonged Block 37 project took a big dip today with the announcement that it's been hit with a foreclosure lawsuit. The suit comes from a group of lenders, headed up by Bank of America. Block 37 developer Joseph Freed & Associates LLC said in a statement, the lawsuit was “a serious breach of trust with the people of the city of Chicago...The suit lacks merit and Joseph Freed & Associates LLC will fight it vigorously."
The lawsuit said Freed, company President Laurence Freed and a related partnership owe $128.5 million on notes worth an original $205 million on the property. Block 37 is the part of the Loop between the Daley Center and Macy's State Street store.The suit charged that the loans have been in technical default since last March because of $34 million in cost overruns on construction at Block 37.
A spokeswoman for Bank of America said, "We always work with our clients to help them resolve their financial issues and have done so in this case. We have been working with the developer for over a year to help them resolve their financial issues...We believe this is the best outcome for all involved, the banks, the tenants and the community."