Final Countdown For Block 37
By Marcus Gilmer in News on Nov 15, 2009 5:30PM
Thanksgiving is almost here and with that comes the hoped-for opening date for the beleaguered Block 37 project downtown. And two events this week might go a long way towards determining if the project will manage to open on time as scheduled. First, on Thursday, the project will get the final inspection from the city that would give it the okay to proceed with its opening. But Friday sees the hearing where Bank of America, the main lender on a construction loan, will ask a judge to take control of the project away from developer Joseph Freed and Associates LLC and hand it over to a receiver. According to the Tribune:
Bank of America officials won't comment beyond the lawsuit, which essentially says Freed spent too much money. The bank, lead lender on a $205 million construction loan, asserts that Freed is at least $42.6 million over budget and has remained "silent as to how it will fund completion" of the project, according to court filings. Larry Freed declined to comment on the lawsuit, but in court filings Joseph Freed and Associates said it believed there was an understanding with the banks from the day it took over the project that more funding would be required.Freed is the third developer in as many decades to try to make something of the vacant Loop lot across from Macy's. The star-crossed project, a victim of overambitious efforts, a previous real estate crash and State Street's less-than-glamorous image, would be a coup to pull off. It's unclear how much of a financial bet Freed is making on Block 37, but losing the project would be a blow to the firm's reputation.
The opening of the underground pedway, connecting City Hall with Macy's, hinges on the opening of the entire project. And given how badly Mayor Daley wants that pedway open by the time winter fully sets in, it'll be interesting to see how involved the city gets.