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CHICAGO (CBS) — The massive Addison Park on Clark hotel-residential-retail development in Wrigleyville got the green light from the City Council last year, despite heated opposition from many neighbors.
But now, the tough economy appears to be taking its toll on the project.
Crain’s Chicago Real Estate Daily reports Bank of America has filed a foreclosure lawsuit against the development venture that owns the site, alleging that it owes $8.9 million after defaulting on loans.
The venture, led by developer Steven Schultz, was also sued for foreclosure in March 2009, but the complaint was withdrawn after the developer modified its loan, Crain’s reported.
Schultz acknowledged he owes the money, but tells Crain’s he has never missed an interest payment. He tells Crain’s he will be “taking Bank of America out” of the project in a month.
But there are other problems with the development. No hotel has signed up as a tenant yet, and the developer is not close to securing a construction loan, Crain’s reported.
The developer for the project says he is trying to line up another lender to salvage the proposed development, which would eliminate most of the buildings on the east side of the 3500 block of North Clark Street and the south side of Addison Street across from Wrigley Field.
The complex, which was approved by the City Council in July 2010, was intended to include an eight-story, 137-room Hyatt hotel, 135 residential units, and 145,000 square feet of retail space, which might include of a Best Buy, a Dominick’s, an Apple Store and a CVS Pharmacy. There would also be 399 parking spaces.
Many neighbors were in an uproar about the development after it was announced, given that it would require a number of popular restaurants and bars, and the iO improv comedy theater and school, to clear out.
The Addison Park on Clark development will clear away iO at 3541 N. Clark St.; the Salt & Pepper Diner, 3537 N. Clark St.; the Goose Island Wrigleyville Brewpub, 3535 N. Clark St.; Mullen’s Bar and Grill, 3527 N. Clark St; the Red Ivy Sports Lounge, 3519 N. Clark St.; The Curse bar at 3517 N. Clark St.; and Pauly’s Pizza Ria, 3515 N. Clark St.
Also displaced would be several businesses on Addison Street, although the Luis Auto Repair Shop and the Sports World Cubs apparel store will remain.
iO co-owner Charna Halpern and her colleagues were at the forefront of the fight against the project last year, which they said represented the suburbanization of a vibrant nightlife district.
Tens of thousands of people joined a Facebook group, “People against the Malling of Wrigleyville,” founded by iO instructor Tara DeFrancisco.
But by July of last year, Halpern told the Onion A.V. Club she planned to move iO to another neighborhood.
Only one business on the condemned strip of Clark Street has closed since plans for the Addison Park on Clark were approved. The former Bar Louie at 3545 N. Clark St. closed late last year, and signboards for the new development are now posted on its windows.
Schultz quietly spent 13 years buying up the buildings along Clark Street that he now plans to have demolished, as well as the buildings on Addison Street east to Sheffield Avenue, Crain’s reported.