Month: June 2019

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Houses or horses? Gambling expansion may…

Written by The Real Deal

Gold Rush Gaming’s Rick Heidner and the former Tinley Park Mental Health Center village officials suddenly have a choice between houses and horses on the old Tinley Park Mental Health Center property. Long eyed as the site of a large new subdivision, the former mental health center is now in the running for a combination racetrack/casino that would be created under a massive statewide gambling expansion awaiting ’s signature, according to the Daily Southtown. The village had been negotiating for months with a venture known as Melody Square to put hundreds of homes on the property at 183rd Street and Harlem Avenue. But the new gambling legislation allows for the creation of a in the south suburbs, and Melody Square partner Rick Heidner is now looking to put in on the health center site. Melody Square, led by prolific homebuilder K. Hovnanian, had proposed a development with 435 single-family homes restricted to buyers 55 and older, 200 senior apartments and more residential units on the 280-acre property, according to the Southtown. But village officials said that plan now is on hold until the racino site-selection process is resolved. Heidner, who is pursuing the racino separately from his Melody Square partners, is an owner of video gambling terminal operator Gold Rush Gaming. — John O’Brien  

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Lighting up the Sunshine State: MedMen…

Written by The Real Deal

MedMen CEO Adam Bierman (Credit: Getty Images and iStock) MedMen Enterprises opened its first Florida dispensary in West Palm Beach as the cannabis company plans to light up the Sunshine State. Los Angeles-based is focusing on Florida, opening a 7,550-square-foot medical marijuana dispensary at 539 Clematis Street in downtown West Palm. The company is focusing its growth this year on Florida. Out of the 15 dispensaries it expects to open in 2019, 12 are in Florida, according to CNN. Florida started to allow for regulated medical marijuana sales in 2017, but the state recently loosened its medical marijuana laws to allow for the sale of smokable cannabis. A report released earlier this year showed that MedMen did not have “sufficient funds generated from operations” to cover its short- and long-term needs, and needed to find . But in March, it secured a $100 million loan from cannabis industry lender Gotham Green Partners to fund the new openings. MedMen, one of the bigger marijuana dispensary firms in the country, is one of 14 licensed operators in Florida and can open up to 35 dispensaries in the state, a cap that expires next April. The private equity-backed marijuana company the city of Miami Beach, alleging the municipality violated state law when the city commission adopted an ordinance in February that prohibits two or more dispensaries from being located within 1,200 feet of one another. MedMen executed a lease deal in Miami Beach based on assurances from city administrators that the property fell within an area zoned for medical marijuana dispensaries, the lawsuit states. — Katherine Kallergis

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Short move for “Big Jim:” Former…

Written by The Real Deal

57 East Delaware Place and former Gov. Jim Thompson (Credit: Getty Images) Former Gov. James “Big Jim” Thompson and his wife got a big payday on a condo they had been trying to sell on-and-off for three years. The state’s longest-serving chief executive, who was governor from 1977 to 1991, closed on a $1.5 million sale last week of their three-bedroom condo on the 34th floor of the Bristol building at 57 East Delaware Place, according to the Chicago Tribune. Jim and Jayne Thompson first listed the home in 2016 for just under $2 million, around the same time they paid almost $2.3 million for the 41st-floor condo at 55 East Erie Street in River North where they currently live. The couple made the move because they wanted an outdoor terrace and a fireplace, they told the Tribune at the time. The Thompsons took their 3,515-square-foot Gold Coast condo off the market later in 2016 before relisting it last year for nearly $1.9 million, then nudging down their asking price several times. The unit includes hardwood floors, floor-to-ceiling windows and a library with built-in mahogany bookshelves. Marlene St. George of Baird & Warner brokered the sale. The Bristol is about a block away from JDL Development’s condo tower, which continues to rack up sales above . — Alex Nitkin

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US landlords say Topshop owner is…

Written by The Real Deal

From left: Topshop and Topman stores at 478 Broadway, Arcadia Group CEO Philip Green, and Vornado CEO Steven Roth (Credit: Getty Images and Google Maps) An obscure UK process known as “company voluntary arrangement” is the heart of a legal dispute involving a group of U.S. landlords and UK-based Arcadia Group, which decided to fold its U.S. operations. Vornado, Brookfield and other landlords filed papers in bankruptcy court on June 4 in opposition to Arcadia’s decision to put subsidiary Arcadia USA, which operates 11 Topshop stores in the U.S., into receivership overseen by an administrator. The filing accuses Arcadia of “engaging in a the […] US landlords of their bargained-for contractual rights by manipulating and exploiting a private, little-used out-of-court process in the UK known as a company voluntary arrangement [or CVA],” the , noting that the court filings were first reported by The Sunday Times. Arcadia escaped collapse last week when its unsecured creditors – including landlords, suppliers, the UK tax authority and Arcadia’s pension scheme – voted to approve a CVA to restructure the company by reducing rents and closing some stores. A 75 percent supermajority was needed to approve the plan. The use of CVAs has proven controversial in the UK as well, and the decision faced opposition from British landlords such as Intu Properties, a shopping center real estate investment trust. Meanwhile, the U.S. landlords say they were “frozen out” of the proceedings, and that they are likely to be impacted negatively by the decision. Los Angeles-based Caruso said that it “is concerned that the group is engaging in a scheme to exploit areas of UK insolvency law that limit due process and disclosure to creditors.” Fast-fashion brand the U.S. market in 2009, and now has stores in New York, Miami, Los Angeles, Chicago, Las Vegas and Houston. Both New York stores, at 608 Fifth Avenue in Midtown and 478 Broadway in Soho, are owned by Vornado. — Kevin Sun

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“Full speed ahead:” City approves millions…

Written by The Real Deal

From left: McCaffery Interests CEO Dan McCaffery, renderings of the “Southbridge” campus, and Mayor Lori Lightfoot (Credit: Facebook) Updated, June 17, 2:53 p.m.: A long-promised redevelopment of the demolished Harold I. Ickes Homes took is finally set to become reality. The City Council last week approved nearly $22 million in public financing for the 11-acre mixed-income “Southbridge” campus planned by and nonprofit The Community Builders near 23rd and State streets on the Near South Side. The developers say the benefits will allow them to break ground by the end of the summer. The plan, which last year, would eventually build 877 rental and for-sale homes and 60,000 square feet of retail space on the former site of the Ickes public housing complex, which the city razed in 2010 as part of former Mayor Richard M. Daley’s citywide “Plan for Transformation.” During the first regular council meeting held since and a dozen new alderman took power, aldermen voted Wednesday to allocate $17 million in tax increment financing from the 24th/Michigan TIF district and a $4.8 million “multifamily loan” to the Southbridge development, according to Lightfoot’s office. Will Woodley, director of Chicago development for The Community Builders, called the vote a “big milestone” for the $97 million first phase of the development, which will include 206 apartments and 16,000 square feet of retail space spread across two buildings. The developer will set aside 68 units for CHA residents, with 112 market-rate apartments and another 26 units rented at affordable rates. “This allows us to move full speed ahead and close (on the property) so we can start construction in the next few months,” Woodley said. The financing will also pay for a project to fully connect Dearborn Street and 24th Street with the surrounding grid, he added. The final redevelopment is projected to include sports fields, a running track and pedestrian plazas. “We’re going to be moving aggressively over the next several years on future phases” of the complex, Woodley said. “But our main goal right now is to get that first phase started so we can establish Southbridge as a mixed-use destination that brings together the South Loop, Chinatown and Bronzeville.” The first phase is projected to be completed by early summer 2021, he added. Public financing galore The city-approved money would join a mishmash of other funding sources including a private mortgage, a $22 million loan from the Chicago Housing Authority and $40 million from the Illinois Housing Development Authority, according to Lightfoot’s office. Woodley did not say who is providing the private mortgage, or how much it was worth. He added that Goldman Sachs is an equity investor in the development, but declined to say the size of the investment bank’s stake. The development will absorb most of the roughly $18.1 million in total revenue the 24th/Michigan TIF had on hand as of last year. The district has collected property taxes to fund some $45 million in capital projects since it was commissioned in 1999, city and county records show. It is scheduled to expire in 2022. The Southbridge site is inside one of the city’s highest-profile , which offer tax breaks for equity investors who raise the taxable value of low-income census tracts. But the developers will not pursue Opportunity Fund investments for the site, Woodley said. Representatives of McCaffery did not immediately respond to requests for comment Monday.

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Up and out: Developers are eliminating…

Written by The Real Deal

HPP CEO Victor Coleman and a rendering of One Westside Los Angeles developers have been repurposing massive shopping malls to attract more , and one of the most prominent features of those properties to get the heave-ho are escalators. Brookfield has removed 24 escalators from the Fashion District’s as part of a creative office conversion of the 56-year-old building, according to the Los Angeles Times. “The idea of getting on escalators like you did in the 1950s and ‘60s is not happening,” Brookfield Office Properties’ Bert Dezzutii told the Times. “People desire to move around and be untethered.” Brookfield is replacing them with stairways that will lead to indoor bridges and decks. It is also trashing the glass curtain walls on the building to create open-air spaces. Hudson Pacific Properties and Macerich are doing the same at the former Westside Pavilion shopping mall, which the duo is into a massive office space for called One Westside. The new space takes advantage of the mall’s open layout and opens it up further with a glass façade and open office spaces. HPP CEO Victor Coleman believes large FAANG-type — Facebook, Apple, Amazon, Netflix and Google — will commit to their campuses for the long haul, occupying them in perpetuity like a university. — Dennis Lynch 

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Ernst & Young inks lease at…

Written by The Real Deal

EY Global Chairman and CEO Mark Weinberger, Andy Gloor, and the property Ernst & Young is establishing a foothold in Fulton Market, with plans to open an office next year in a -developed building. The global accounting giant signed a lease for 40,000 square feet on the ninth floor at 333 North Green Street, according to Crain’s. Sterling Bay is scheduled to finish the 19-story GR333N building this year. It’s part of a larger office complex the firm is developing on the former Coyne College campus and parking lot, which it bought in 2016 for . The 555,000-square-foot building is now 80 percent leased. Other tenants include ad agency WPP, which signed a 253,000-square-foot anchor lease and co-working firm Convene, which is taking . Ernst & Young, which now brands itself as EY, has its main Chicago office at 155 North Wacker Drive. Some of the 3,500 employees who work there will move to the Fulton Market space, according to Crain’s. — John O’Brien

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Chicago Cheat Sheet: Wood Partners looking…

Written by The Real Deal

Wood Partners Chairman and CEO Joseph Keough and Alta Roosevelt  South Loop apartments hit market Wood Partners is looking to sell a 496-unit rental tower in the South Loop. The Atlanta-based firm hired Chicago brokerage Moran to market the 34-story Alta Roosevelt at 801 South Financial Place. The building, which is listed without an asking price, is 98 percent leased. Dream makeover proposed for Guyon Hotel A redeveloped Guyon Hotel in West Garfield Park would include a jazz museum, radio station, music school, neighborhood cafe, and performance and events spaces if the winning proposal in a recent design competition becomes reality. Chicago architecture firm CallisonRTKL and nonprofit Preservation Chicago launched the competition to help spur redevelopment of the long-vacant 92-year-old building. But advocates said the effort to revive the building faces a $10 million funding shortfall. CTL Global leasing big Elmhurst industrial building A Chicago-based logistics and fulfillment company inked a lease for a big distribution facility in Elmhurst. CTL Global is renting the 248,000-square-foot building at 1000 North County Line Road owned by Black Creek Group, adding to its locations in Northlake, Bensenville and Elk Grove Village. Colliers represented Black Creek Group in the lease, while Cresa represented CTL. Suburban hotel owner fined for code violations The owner of a closed Rolling Meadows hotel has been fined for code violations in the building. Sam Patel of Woodfield Hotels LLC was cited 43 times for a range of violations associated with a $9 million renovation of the Holiday Inn at 3405 Algonquin Road, including letting workers stay in the hotel while it’s under construction. Patel’s lawyer said the code violations have been remedied. Brown & Joseph signs Itasca office lease An accounts receivable firm inked a 23,000-square-foot lease in the One Pierce Place office complex in Itasca. Brown & Joseph was represented in the lease negotiations by CBRE, while building owner Hamilton Partners’ Patrick McKillen represented his firm.

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Homebuilders’ outlook posts unexpected drop for…

Written by The Real Deal

(Credit: iStock) Confidence among the country’s homebuilders took an unexpected dip in June amid concerns over rising costs and trade issues. The National Association of Home Builders/Wells Fargo Housing Market Index fell two points to 64 for the first drop in 2019, according to Bloomberg. A score above 50 shows that more developers perceive sales as good, rather than bad. Lower mortgage rates have failed to boost confidence in the US housing market, as homes remain too expensive for most buyers. “Despite lower mortgage rates, home prices remain somewhat high relative to incomes, which is particularly challenging for entry-level buyers,” NAHB Chief Economist Robert Dietz told Bloomberg. “Builders continue to grapple with excessive regulations, a shortage of lots and lack of skilled labor that are hurting affordability and depressing supply.” A Bloomberg survey had initially predicted the housing sentiment index would rise from 66 to 67. It stands in stark contrast to a promising start to the year for the industry. After mortgage rates dropped to 13-month lows, shares of home-building companies were for their best quarter in seven years. At the time, major homebuilders Beazer Homes USA, BZH, Lennar, KB Home and D.R. Horton all recorded share price increases of about 20 percent. The recent figures suggest that the housing market is in fact not on the rise, as home-builders complained that increasing construction costs had contributed to higher property prices. [] — David Jeans

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Famous Hip-Hop Artist DJ Khaled’s Miami…

Written by The Eater Chicago

The Licking is packing the house in Austin The waits are long at the Licking, by hip-hop artist DJ Khaled that opened its first Chicago location over the weekend. The outpost debuted Saturday in Austin on the city’s West Side. Khaled opened his first restaurant in 2015 in his adopted hometown of Miami, serving “Miami-style” soul food including fried lobster, steaks, and tilapia. For Monday lunch, waits were as long as 45 minutes for a table for four in Chicago. When Khaled (whose given name is Khaled Mohamed Khaled) opened his first restaurant four years ago, he saw its impact on the community. His crew wants to give underserved African-American communities a quality spot to eat near their homes. For folks living in the Miami Gardens neighborhood, that meant opening a restaurant away from South Beach. Khaled and company have since opened four more locations, including one on South Beach. to franchise the restaurants and open “as many as possible.” At the same time, he also wanted to be patient and not rush toward expansion. View this post on Instagram A post shared by (@thelickingmiamigardens) on Jun 10, 2019 at 5:42pm PDT is using a similar recipe in Chicago that it used in Miami by bringing a family-friendly option to the West Side. Marketing director Benda World chatted . “I feel it’s needed, Hyde Park has a bunch of offerings, and so does the South Side,” World said. “So we want to bring jobs and create those things for that sector that didn’t have it.” Besides the fried or grilled lobster — of which a dinner with two sides costs $22.99 — the restaurant serves a red velvet cake that Khaled lovingly called “a problem.” World also suggested customers try the red velvet chicken and waffles. The also include a “famous mystery drink,” four flavors of lemonade, chicken wings, and alfredo pastas. The Miami restaurant was originally known as Finga Licking, but the name was changed. Mega chain KFC . The restaurant was so busy on Monday that a host couldn’t answer questions on the phone. She was too busy seating people and telling them about the long waits. Chicago has soul food restaurants, as the Tribune is exploring different soul food and other . But the owners behind the Licking feel their restaurant is unlike anything Chicago’s seen before, and they hope to serve locals and attract visitors to the West Side. , 5045 W. Madison Street, hours not posted yet.