Thursday, October 27, 2011

Sold! Investors Buy Old Land Where X/O was Supposed to Go

It's been awhile since we've heard about the controversial X/O building that was supposed to be built on Prairie Avenue, but yesterday we read an article in Crains about new owners buying this land:

A joint venture between Golub & Co. and Sandz Development Co. has taken over the site of a controversial South Loop condominium project that never got built, a property likely to sit fallow for a while longer as the developers figure out what to do with it.

The venture took title to the parcel at 1712 S. Prairie Ave. last week, more than two years after the condo project’s developers were hit with a $20.2-million foreclosure suit, county records show. The developers, Keith Giles and Jerry Karlik, relinquished the site through a so-called deed-in-lieu of foreclosure.

“Basically, it’s a long-term land play,” says Golub Executive Vice-president Lee Golub.

Condos are no longer an option amid an overbuilt South Loop market, but many downtown developers have turned to apartments amid rising apartment occupancies and rents. The venture could also just wait for South Loop land values to rise and then sell the parcel to a developer.
Nothing to get that excited about. From the sounds of it, this could be an investment for the future.

(Hat tip: Curbed Chicago!)


Anonymous said...

good! now tear down that old broke down dump of a building and turn it into a grass lot in the meantime

Anonymous said...

Ditto on anonymous at 7:42. We live very close and it would be great to see a grass lot there until it is developed. Right now the empty building has a security car sitting there since an incident in the spring when police officers and dogs were searching the building not to mention the fact that a few A/C units have gone missing from the roof and the sidewalk around there is dimly lit and creepy.

Banker said...

Great, Great news! This is what happens when you let a 5th rate developer possibly front money from the 'how you doin' crowd and choose a crappy contextual building design and claim it as 'avant-garde'.

If Central Station is having difficulty selling a quality tower like One-Museum Park Tower 2, if this project ever got started, how long before this project was going to stop construction or take the cheap and crappy route like the CMK developments on 1720 & 1640 Michigan? Frankly, the oppositional impact to this project may have saved these knuckle-heads over $150MM, when they would have defaulted during construction, instead of the $20MM of land and probably $5MM in upfront costs.

Looks like PNC Bank wanted to clean-up some of the turd loans & foreclosure assets they got stuck with in their National City Bank takeover. Couple that with the city filing various violations on the property, parties in Cook County's assessor's office about to jack-up the property's assessed value, and this one has "walks like a duck" written all over it. it 'quacks' like a well orchestrated four-corner siege around a wounded target, using resources on all sides squeezing them into surrender.

The developer overpaid by a lot in a rush to get the property, at something like $25MM. Based on costs to carry, deal with city, site prep, etc. This property was worth at best $7-$8MM in current state, tops.

People could see through this developer's schtick and lack of experience. Let's hope this ends their development career in the South Loop.

It's interesting that the same developer is "representing" the owner in a bank short sale for property down the street.

My associates legal advisor is representing clients who were interested in the in the 1943 Prairie property, in research of liens, warranty deeds, and sale history for the property, and in trying to engage in the dialogue for putting in an a short sale offer, guess who's name kept being brought up? None other than Mayor Daley-friend/ Family-Secrets-Trial-honoree, Tommy DiPiazza. Yet, they have yet to find any quit-claim deeds, or warranty deed indicating the change or sale from the listed alleged owner, some patsy put up at head of the LLC.

Anonymous said...

this is a good to finally hear - good riddance to the idiots forcing the neighborhood to accept this loser project. with golub and sandz it will be interesting to see if this is an opportunity purchase or something they intend to develop. sands has also done work with Belgravia.

with a real developer, if lucian lagrange had come up with a more higher quality, classical high end building like elysian or like the 840 lake shore drive the project would have succeeded and been embraced.

the central station isolated tall thin tower, perched all by itself is to isolating and so Houston-suburban.
A a unique block-face sidewalk fronting project like the 3 buildings that make up "The Residences on Lake Shore Park" on Pearson St (by NW hospital and the contemporary art museum) would be ideal. A developer could actually get much more density in the site with even 20-30 stories.

or take the lower mansard design of the elysian hotel that actually gives something back to the street scape and energy. none of the museum park buildings do that, except perhaps the twin red-stripe buildings. it always feels active in the front of those buildings.

Steve said...

Too bad Jerry Karlik and Keith Giles managed to slip out from under the burden of their slimy, plan-gone-wrong without being crushed. I read in Crain’s that they had personally guaranteed the loans they ended up defaulting on for the land yet were able to get out relatively unscathed when they defaulted. TO BAD. That wouldn't happen to you or I though. We live Prairie District Lofts which they converted from rental to condo and know firsthand what sleezeballs they are–literally, every chance they get! It’s pathological I think! So glad they will not be involved in whatever happens on that land going forward.

Anonymous said...

"with a real developer, if lucian lagrange had come up with a more higher quality, classical high end building like elysian or like the 840 lake shore drive the project would have succeeded and been embraced."

Lagrange is hated by just about any architect, and for good reason... His outdated designs don't belong in a new and modern hood like ours and the early Museum Park towers are bad enough already. Developers here should innovate and push the envelope. (i agree however x/o sucks)

Steve said...

I hate Giles so much I just think he is the silliest dang fool around. Also I heard that he is a total fuddy duddy and never slim slams his pajama grams ( if ya know what I mean).

Anonymous said...

I am sure you are a smart lad, but this has to be one of the silliest things ever posted:

"Lagrange is hated by just about any architect, and for good reason... His outdated designs don't belong in a new and modern hood like ours and the early Museum Park towers are bad enough already. Developers here should innovate and push the envelope."

Who really cares what other architects think? What does that have to do with the quality of the property, value, or impact on the neighborhood? What does architecture style have to do with density? Architects are some of the most egocentric douches out there.

The reality of finances, real estate value, and quality of impact to the neighborhood is that the his POMO work, when coupled with a legitimate developer, is selling and retaining value at far better than any of this cheap modern crap.

Any of these projects are still doing well in a tough real estate market:
Park Tower
65 East Goethe
840 North Lake Shore Drive
535 West End Avenue
Elysian Hotel & Residences
Lincoln Park 2520
Ritz-Carlton Residences
10 East Delaware

People are so tired of hearing the
"modern architecture build everything high-rise 1% dweebs", (ironically many of who are out protesting as part of Occupy Chicago/New York/Mom's Basement)
cry about the need for modern glass everything. Look at the buildings with the sales or foreclosure problem - Lexington, OMP-T2 (quality building - bad sales), CMK Michigan Ave. The CMK work is garbage that lowers the standard.

If developers build more modest, quality, high-end stuff, it will sell. Marketing affordable highrises to first-time buyers is part of the problem - inevitably it has to be done cheaply - cheap glass, cheap finishes, cheap clad, cheap entry, cheap streel level design, cheap ammenaties, cheap parking structure, and cheap buyers who are most impacted when another cheap buyer next door forecloses and screws it up for everyone else in the building.

Anonymous said...

Wow! I was just thinking that this parking lot will be the final connector that needs to be filled on this street. Golub planning apartment tower:

Cheap land for sale said...

Glad to hear that they are finally doing something about this. We need more green spaces!