Prairie Blocks bankruptcy case to be tossed, for now
Judge preparing to dismiss case on technicality, but implores developers to try again soon
04/12/2012 5:29 PM
A massive hotel and retail development near McCormick Place in the South Loop is likely to lose a battle in bankruptcy court on a technicality, but plans look good for developers to take a second shot.
The Prairie Blocks development, between Cermak Road, 21st Street, Calumet Avenue and Prairie Avenue, has been embroiled in court hearings between the property’s developers and its lenders since 2010. The developers, led by wife and husband team Pam Gleichman and Karl Norberg, filed for bankruptcy to keep lender CenterPoint Properties from foreclosing on the development’s proposed site.
Gleichman and Norberg’s development group for the property, Olde Prairie Block Owner LLC, presented its fifth proposal to emerge from bankruptcy less than two weeks ago on March 31, after federal court judge Jack B. Schmetterer said the fourth plan didn’t adequately respect CenterPoint.
The most recent plan offered CenterPoint more cash up front than they’d been offered in previous plans — $20 million of the roughly $67 million CenterPoint says they’re owed. The rest would come soon after, partly from selling off pieces of the property to developers who would work to develop within the Prairie Blocks framework.
In Thursday morning’s hearing, Schmetterer said that he felt the new plan shows that investors are finally willing to put money into the important site, and has great promise for succeeding.
However, he said he was going to dismiss the case because at 23 months, it had gone on for too long — something that could set the case up to be overturned in appeals court, based off legal precedent.
Nevertheless, he told Gleichman and Norberg’s team they should refile the case, effectively restarting the clock. With their strong new plan, he said, they should have a good chance to move forward and emerge from bankruptcy successfully.
“I was persuaded and I remain persuaded that this is a very valuable property,” Schmetterer said at Thursday morning’s hearing. “This fifth plan proves that the financial market is serious about this site.”
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