(Mark Your Calendars: RealShare HOTELS 2011, September 15 in New York City)
LINCOLNWOOD, IL-First Midwest Bank has hired Podolsky Northstar CORFAC International to find a buyer for the infamous Purple Hotel, after the lender filed a foreclosure on the building. Owner Village Resorts Inc. also did not complete a court-ordered property cleanup deadline of Aug. 1, allowing the village to begin a process toward demolition.
The bank hired Podolsky to sell the mortgage notes on the 293-room hotel, amounting to more than $4 million. The former Hyatt, built in 1960, had hosted singers and actors, but is now most known because of its stark purple color and also as the site of the alleged mob killing of former Teamster Allen Dorfman.
In February, a judge ordered Village Resorts to improve the property after the village cited the site with 31 building violations, and gave a deadline of Aug. 1. The corrections were not made. The village has not yet started the building removal process, however.
Randy Podolsky, managing principal of his firm, tells GlobeSt.com that the property at the corner of Lincoln and Touhy avenues is worth more without the building. “We think the underlying value is in the location and the land, there’s good demand for this site,” he says. The village has established a TIF district to aid in redevelopment of the five-acre property.
A buyer of the notes could continue the foreclosure process, or the owner could even work to buy back the property. The notes have to be sold within the next 45 days, Podolsky says.
He says he’s seeing more and more foreclosure activity, as banks move to clear properties off balance sheets. “It’s going to get much stronger, you’ll see more coming out in the next six months,” Podolsky says.
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