After a lawsuit is threatened, River City deal on again
December 7, 2018

Amenities at the Riverline project are expected to make River City more attractive to renters. The River City condo conversion is a $90.5 million deal.

After a lawsuit threatened to halt deconverting River City condominiums to apartments, the property sale of $90.5 million is on again and slated for Dec. 17, said Kelly Elmore, attorney for the River City Condo Association.

The Cook County Circuit Court on Nov. 16 ruled against a suit challenging whether the sale agreement had reached the required threshold of at least 75% of condo owners in favor of the sale by Aug. 28. A group of condo owners had filed the suit, which questioned the validity of proxy votes.

Elmore said that, while the River City deconversion process has taken longer than most, it is not unusual for such negotiations to hit snags. Her firm, Chicago-based KSN, specializes in deconversions and deals with a variety of issues that do not necessarily squash a deal.

“We see this often, usually involving code violations,” Elmore said.

Negotiations with Marc Realty and partner Wolcott Group for the 448-units at 800 S. Wells St. began three years ago, with offers beginning at $81.47 million and $92.2 million. While neither offer garnered the 75% approval as required by Illinois law, a $100 million offer won approval, although the buyer then terminated it due to concerns over the building’s condition.

Elmore noted that termination also was not unusual, based on her experience.

On Aug. 28, 77.9% of owners agreed to sell for $90.5 million. The buyer could sweeten the offer by an additional $1 million if all owners produce their units’ closing documents before closing.

Deconversions have become popular in a rental-dominant market, according to real estate experts. They point to the building’s South Loop proximity to downtown as well as the anticipated Riverline project, featuring new building construction and riverfront amenities.

“River City is an iconic building,” said Josh Ellis, a board member of the Greater South Loop Association. “Its transition is natural in the grand scheme of things. The Riverline will involve the construction of multiple buildings, and it will be a mix of condos, apartments, and townhomes.”

He added that the diverse range of River City residential units for singles, couples, and families provides “a lot of options.”                

—Rick Romano