CHICAGO (CBS) — A Los Angeles firm has bought the struggling Block 37 shopping mall downtown, according to a published report.
The real estate firm CIM Group confirmed to Crain’s Chicago Business’ Alby Gallun that it had purchased the 305,000 square-foot mall at 108 N. State St. for an undisclosed sum.
CIM told Crain’s it plans to lease the rest of the building to national and local retailers. Currently, the mall is only 30 percent leased.
The mall was turned over to Bank of America in a court-ordered auction last year, after developer Joseph Freed and Associates defaulted on a $205 million loan from the bank.
Bank of America filed a foreclosure lawsuit against Freed shortly before the mall opened, claiming the developer had been in default since March 2008 or earlier, and that the project had exceeded planned costs by $34 million.
Freed had fought against the lenders, arguing that the banks had reneged on a promise to restructure the loan and refused to approve a reworked lease with a movie theater that never ended up moving in. Freed also tried to argue that the recession had made it impossible for the developer to move ahead.
The sparsely populated shopping center is now anchored by an assortment of fashionable retailers including Puma, Steve Madden, Anthropologie, Sephora and a Disney Store.
But critics have bemoaned the amount of empty space in the mall, as well as a planned Chicago Transit Authority “superstation” with express train service to O’Hare and Midway international airport that has never been built.
The 22 W. Washington St. building, which houses CBS 2 and Morningstar, is also on Block 37. But it is not part of the Freed development that has been purchased by CIM.