Michael Reschke’s Prime Group paid about $23 million to settle a dispute with the lender over the LaSalle Street office block the Chicago developer is converting to residential use.
Lender Midland National Life Insurance had sought to foreclose on the five-story block of offices above the JW Marriott Hotel at 208 South LaSalle Street, claiming Reschke still owed a balance of more than $49 million including fees on the $47.5 million mortgage on the property.
“Obviously we consented to it and wrote a check,” Reschke said of the settlement amount. “Am I happy? No, I’m not happy, but it was a mutually agreed settlement, yes.”
Midland did not respond to a request for comment.
The property was sold through a bidding process that drew multiple interested buyers. A court-appointed receiver, Millennium Properties’ Daniel Hyman, handled the sales process.
The sale ends a two-year negotiation period between Reschke and the lender and clears the path for the developer to proceed with converting the property to residential use.
The $130 million plan, which calls for turning the 222,000-square-foot office space into 280 apartments, with 84 units designated as affordable, was selected by the city as one of three redevelopment proposals to receive tax increment financing assistance, as was another project Prime Group is involved with at 11 West Monroe Street.
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Reschke has been bullish on the Loop. In July he told The Real Deal that he believes downtown property values are at a record-low point in the city’s history.
The resolution is the latest example of Reschke’s penchant for navigating risk and has maintained his properties through challenging financial and legal situations. The veteran developer blew up his own $70 million purchase of the Thompson Center last year so Google could instead buy it and pay for him to redevelop it.