A Chicago-based real estate firm with ownership and financialbacking on the East Coast is expected to take over a long-stalledhigh-rise project in the Lincoln Park area.
Sources said MB Real Estate will assume control of the formerColumbus Hospital property, 2520 N. Lakeview. Its three-acre size,rare in the tightly packed community, and its lakefront views havemade it a prime site for speculation in luxury housing. But the firmthat has controlled the property since 2001, American Invsco Corp.,has been unable to begin the project.
Chairman Nicholas Gouletas agreed to buy the site for $35 million,but couldn't generate enough condominium sales to finance even thedemolition of the old hospital.
Real estate executives with direct knowledge of the site said MBReal Estate will take over with funding from a unit of GeneralElectric. Terms could not be learned, but sources said GE would fundthe land acquisition and leave construction management and condosales to MB Real Estate.
Gouletas is not expected to keep a role in the deal. He did notreturn calls.
Besides falling behind in loan payments to LaSalle Bank, Gouletasalso owed at least $400,000 at one point to the project's architect,Lucien Lagrange, and the law firm that handled the zoning.
Two people said MB Real Estate and GE are within days of closingthe sale.
Peter Ricker, chairman of MB Real Estate, acknowledged discussionsabout the property in the past but said, "At the moment, I'm notdoing anything with it." He also said he's not involved with GE onany matter.
His firm is owned by brothers Edward and Howard Milstein, New Yorkreal estate investors who have done many housing deals. MB RealEstate is primarily an office building manager and investmentadviser.
Jerry Karr, a managing director at the GE unit, didn't returncalls.
As backed by the City Council in 2002, the project called forabout 325 units in three buildings facing Lakeview, the tallest being38 stories. Without changing the building size, Gouletas laterreduced the number of units to about 180, making them larger andproposing to charge rates that set new highs for the market of about$1,000 a square foot.
Sources said MB Real Estate will return to the original 325-unitplan, and might even seek to build more to cover a hefty purchaseprice and construction costs that grew steeper with increases forsteel, copper and other materials.
Gene Fisher of the Diversey Harbor Lakeview Association, said hisgroup would fight any effort to add units to the project. "The singlemost serious problem we see is its effect on traffic and congestion,because the place is already in gridlock," he said.
droeder@suntimes.com
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