XO is in foreclosure

Bank is seeking $20.2 million

10/07/2009 10:00 PM

By MICAH MAIDENBERG
Editor

5 Comments - Add Your Comment


X/O building
Lucien LaGrange

X/O’s glassy twin 45- and 33-story towers were meant to host 479 units on the northwest corner of Prairie and 18th. First pitched in the summer of 2006, the buildings would lure buyers entranced by the prospect of living in what backers called a design triumph (and critics labeled an out-of-character outrage).

“World-renowned architect Lucien Lagranges’ unparalleled structure — towers bending as if dancing in the sky — is exactly what the South Loop needs,” reads a Web site marketing the project. “A modern landmark.”

But, last summer, Lagrange was seeking more than $500,000 for his services from the corporation established to build the project, 1712 S. Prairie LLC, according to a lien on record at the Cook County Recorder of Deed’s office.

A further indication of the development’s troubles came Sept. 22, when Cleveland-based National City Bank filed a mortgage foreclosure lawsuit against 1712 S. Prairie LLC, which is owned by Keith Giles and Jerry Karlik, as well as the developers personally. Each is named as a guarantor of the loan. The bank is seeking immediate payment of $20.2 million.

Calls placed to Giles were not returned.

The pitch for X/O generated a contentious debate in the South Loop about the project’s height and scale, its architectural style and the process by which it was approved.

Though X/O is in foreclosure and the housing market remains adrift, Chicago Journal interviews suggest that fault lines over such issues remain, waiting activation should future spurts of building fill in the South Loop’s vacant parcels.

In the spring of 2006, Giles first floated the twin tower idea, according to the Chicago Journal archive. The Greater South Loop Association lent its backing, though support wasn’t unanimous, even then.

Mark Kieras, who lives around the corner to the site, opposed the project on stylistic grounds. Other GSLA members spoke in favor of the building’s dramatic angles and plans for townhomes fronting the towers, according to the Journal archive.

Dennis Beninato, now the president of GSLA, recalled there being only one objection to X/O at his organization’s initial meeting, justifying his group’s support. He acknowledged the opposition, however, but said it came after the developer had already gone through the city’s land-use planning process.

“After we had done our community meeting, there were a couple other community meetings that took place after the PD had already passed,” he said, referring to the planned development for X/O that the city council had passed (such ordinances govern all large-scale projects in Chicago). “At that point in time, people were upset.”

Beninato blamed the backlash to X/O on a broader issue simmering in the neighborhood.

“There was a brewing resentment over development in the South Loop,” he said, with rising concerns over builder quality, traffic and parking.

By June 2006, a meeting about the project at Glessner House demonstrated opposition within the neighborhood, with the Journal estimating around two-thirds of the 100 or so people attending the session raising their hands when asked if they were against the project. By the following January, those critiques had coalesced, as the Prairie District Neighborhood Alliance, which had formed, in part, to oppose X/O.

Feldstein, president of the PDNA, disputed the idea that the project was ever supported by residents.

“The reason why X/O became such a contested development was they, as developers, tried to claim they had community support. And they never had community support,” Feldstein said. “They were lying.”

“Even though I would never wish ill on anybody, it’s a huge victory for the community,” Feldstein said of the foreclosure, citing X/O’s height and style.

Ald. Robert Fioretti (2nd), who had ousted incumbent Madeline Haithcock that year in a hard-fought aldermanic campaign, took up PDNA’s cause.

In 2007, Fioretti tried to “downzone” the X/O site, capping the towers’ heights at 225 feet. “We’re just bringing it back down to the height of the buildings in the surrounding area,” Fioretti told Chicago Journal in July 2007. “It’s the preservation of the architectural style here.”

That move inspired the development team to sue Fioretti in Nov. 2007. Giles called the new height limits “a clear abuse of aldermanic power and very damaging to a project like ours,” and the alderman eventually withdrew the height restriction.

With the prospect of X/O bringing hundreds of new units to one corner of the Prairie District, density became a common theme during debate about the project. How much is the right amount continues to be discussed. Beninato said the South Loop needs more.

“There still needs to be more density to support quality of life,” he said, including new retailers and neighborhood commercial corridors. “We still don’t have that density.”

Feldstein, however, pointed to Wicker Park and Bucktown’s retail strips, dotted with a mixture of restaurants, independent boutiques and national chains, as a model for the South Loop.

The neighborhood needs pedestrian-oriented projects that encourage walking, not more towers and vehicular access, she said. Too many projects during the boom years weren’t planned well: “They just threw up units.”

“Density is not the only answer. It’s a piece of the puzzle. But based on the density we already have, we should already be a Wicker Park and Bucktown,” she said. “It hasn’t happened.”

Contact: mmaidenberg@chicagojournal.com



5 Comments - Add Your Comment




By southlooper from South Loop
Posted: 10/09/2009 9:34 AM

Bottom line is... XO was the WRONG development for that location!! Based on what I hear there certainly seems to be a growing appreciation for all the PDNA is doing to make our community a fun and better place to live. Thank you PDNA!



By been here for years from South Loop
Posted: 10/08/2009 4:59 PM

Fact Check is 100% correct! This is a major concern...developers claiming community "support" when all they have done is hosted a meeting. Giles was/is a master at this. They say every dog has his day. Just to be clear, Giles is the dog in this situation and the foreclosure is the day. Keith Giles has been able to bully his way in the South Loop for years and usually gets his way thanks to his boys in the Mayor's office. You lose this time, Keith. Score one for the community.



By Fact Check II from Near South Side
Posted: 10/08/2009 12:59 PM

Jack care to clarify? 1. Don't confuse undeveloped lots with lack of density. The population data refutes your claim. However, many of the highrises built have zero street interaction or add energy. Sadly, all the energy is being provided by the Townhomes fronting the streets (except for Dearborn Park). Central Station highrises offer zero street level interaction as configured. Urban high rise isolation 2. Where is the public transportation you tout? Roosevelt road? Oh boy!



By jack from south loop
Posted: 10/08/2009 12:05 PM

Tina appears to be misinformed regarding density. The South Loop is no where near the density of Wicker Park or Bucktown due to the nature of the housing. Both those neighborhoods are full of a building type that can not be built with today's zoning and codes. The only way for the South Loop to acheive similar density is to build taller - which, being adjacent to the lakefront and so much public transportation infrastructure, is wholly appropriate.



By Fact Check Time from Near South Side
Posted: 10/08/2009 11:49 AM

Where is Mr. Beninato getting his info? There was huge opposition before the PD approval. In addition to the obvious questions as to the developer ability to complete this project (proven) was the Kangaroo Court Community review process. Ask Mr. Beninato why the GSLA hosted, what turned out to be a faux community input meeting in late March 2006 , with people unaware the GSLA Board had already issued glowing letter of support on Feb 16, 2006, six weeks earlier. Who does the GSLA represent?