LINCOLNWOOD, IL-By May, the entire mess with the vacant Purple Hotel here could be cleared up for good through an auction of the 8.5-acre site. Or, the village will tear it down before the process.
The distress issue on this property has been dragging on for the past few years, as owner Village Resorts Inc., owned by the Bae family, defaulted on the property after purchasing it about six years ago. North Capital Group purchased the $4 million note on the part of the property that held the 52-year-old, 293-room hotel. Foster Bank bought the notes on two adjacent parcels. The lenders were going to force the Baes out, but the family filed bankruptcy.
Oh, and the village wants the property redeveloped. Yesterday. Though Lincolnwood has formed a TIF district for the property, it also has hired a demolition company to tear the hotel down due to village-claimed property hazards. The village has put the demolition on hold, though North Capital is due to explain a development proposal to the Board of Trustees on April 2.
At the same time, all sides have come to a court agreement to hire Sheldon Good & Co. to auction the entire property, not split up, on May 11. The auction will be held at the Westin Chicago River North.
Mark Troen, COO with Sheldon Good, tells GlobeSt.com that an auction should clear up the entire mess. A buyer will bid and take over the property, the lenders will be paid from the auction, and the Bae family will be out of the picture. It’s expected that North Capital, which has proposed a mixed-use development on the site, will try to be the winning bidder. The buyer will then work out the site problems with the village – if the village decides to wait until the auction is held.
Troen says the auction process is a much faster way to get a property clear of problems than conventional methods. “We can get it done in seven-to-eight weeks,” he says. “This is being done nationwide for troubled properties. You’ve got a trillion dollars of CMBS out there, and large private equity groups are buying up notes for cents on the dollar, then holding auctions to sell it for more.”
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