In yet another chapter in the black hole otherwise known as Block 37, that's what some people are saying about Bank of America, who got its wish today in the appointment of CB Richard Ellis as receiver over the retail portion of the property from Joseph Freed & Associates, LLC.
As Eddie Baeb and Tom Corfman point out, and rightly in my opinion based on what little I know, "While the bank is within its rights to demand a receiver, the move may prove shortsighted, costing the bank more money over the long run and hurting the project's chances of success." Mike Reschke and David Stone, who both know their way around dirt, agree. The project is (does that means was?) about to open, so it'll be interesting to see how seamless the transition should be.
On the legal side, this was largely a slam dunk for B of A, the successor to LaSalle Bank, which underwrote the original deal. Some would say this is what happens when an out of town bank comes in and takes over from a trusted local player (most of whose senior management has moved on, with a huge number of them at The PrivateBank). Others would say that this is simply a sign of the times. The architects, contractors and others should have no problem passing on to the bank and CBRE; after all, that is why the construction plans and contracts are all collaterally assigned to the lender as part of the construction loan. But legal does not always mean practical, so whether or not there will be further delays is a question as yet unanswered. All I know is this: there will be some really, REALLY angry tenants if next Friday rolls along and we're not welcoming holiday shoppers.
And all that said, let me play devil's advocate, especially since I respect a lot of people at B of A and their lawyers (see below). It could be that things got so bad in the relationship between the parties that the bank had to do something drastic. (And I say all this with the greatest possible respect to my friends and former colleagues who represented the bank, by the way.) So, now we have a new game in town -- let's see where CBRE takes this baby.
And have a good weekend, everyone!
UPDATE: according to this Tribune story, some stores and the Pedway are set to open this weekend. And Freed retains control over the weekend, with the order for the receiver issuing Monday. Doesn't this remind you of a book or a movie?