Congress Theater Owner Defaults On Loan
By Chuck Sudo in Arts & Entertainment on Nov 29, 2012 5:20PM
Photo credit: Gabriel X. Michael
When Congress Theater owner Eddie Carranza was asked in September how he was able to afford buying the Portage Theater when he can barely keep the Congress from crumbling around him he said:
“Have you ever heard of Bank Loans? Bank loans is where entrepreneurs go to borrow money to grow their businesses. Banks like what we do so they lend to us money. Bank loans have been going on for hundreds of years.”
Banks also like having those loans paid back, or else they’ll file lawsuits. In Carranza’s case: a foreclosure lawsuit. Foreclosure lawsuits are where banks go to get the return on their investments when entrepreneurs like Eddie Carranza fail to pay off their bank loans. Foreclosure lawsuits have also been around for hundreds of years.
WBEZ’s Jim DeRogatis has the (not unexpected) bombshell announcement.
Filed yesterday by the Chicago firm of Adelman & Gettleman on behalf of Delaware-based PNC Bank, the lawsuit claims that Carranza has defaulted on repayment of $4 million he borrowed in August 2007 and secured with a mortgage on the historic Congress Theater. The bank has been seeking repayment of the loan since August 2011.
In addition to payment of its legal fees, PNC Bank is seeking “an order for the appointment of a receiver, a judgment of foreclosure on the mortgage and sale of the subject property for payment of its lien and costs and such other and further relief as the court deems just.”
The City of Chicago was also named as a defendant in the suit; legal experts believe the city may have a lien on the property that PNC Bank would like terminated. Carranza’s attorney Thomas Raines told DeRogatis the lawsuit is about non-payment of insurance and not the loan itself, yet letter sent from PNC Bank to Carranza between August 2011 and September 2012 don’t mention insurance.
The news on the foreclosure lawsuit comes days after DeRogatis reported Carranza’s team has been dropping the names of chefs Graham Elliot and Brendan Sodikoff (Au Cheval, Gilt Bar, Doughnut Vault) in a bold redevelopment project surrounding the Portage Theater. Elliot told DeRogatis he had no plans on partnering with Carranza in the near future and wanted to focus on his own projects. That hasn’t stopped Carranza’s “new community liaison for The Portage Theater” Jennifer Dianovsky from touting major plans for the Six Corners movie house on Everyblock similar to the plans in place for development around the Congress, including plans for a brewpub that is no one in Chicago’s craft beer community had heard about before.
Carranza began eviction proceedings for the current Portage Management team for $103,000 in unpaid rents, filed a lawsuit Wednesday against online marketer Doejo and its owner Phil Tadros for breach of contract, and may be in discussions on a possible partnership with the Logan Theatre. Then there are the public nuisance/deleterious impact complaints against the Congress Carranza still has to testify before the city about.
It’s hard not to crack a smile at all this happening at once. But Carranza has shown the survival skills of a cockroach before. Maybe the foreclosure lawsuit is the trap banks need to not give him anymore loans.
Read the lawsuit here.