Six buildings in various states of disrepair in the Harrison Street Arts District are making their way through foreclosure and being actively marketed to prospective tenants.
The buildings, owned by Chris Kleronomos, have been appointed to a receiver and "there is activity afoot" in the marketing of the properties, Village Attorney Paul Stephanides said at a village board meeting Tuesday.
Several of the buildings have been sitting vacant for decades, and in 2011 the façade of one of the properties, 201 Harrison St., collapsed onto the sidewalk.
Stephanides said it could take 3-6 months before the buildings — which run between 146 and 219 Harrison and 900 to 910 S. Taylor Ave. — go through the foreclosure process.
Laura Maychruk, owner of Buzz Café and head of the Oak Park Arts District, called on trustees and the village and its business development entity, Oak Park Economic Development Corp., to do what it can to speed the process and get viable businesses into the area.
In October, the village's legal department produced a report on the six properties in foreclosure, noting that North Community Bank is the receiver. But calls to North Community Bank receiver Dan Harrington have not been returned.
The memo noted that in October, "the bank was in negotiations with a potential buyer of the note [for the properties], but following due diligence, the proposed buyer has not moved to purchase these properties."
"It is still possible that this or another group of investors may seek to buy the note from the bank and negotiate the transfer of these properties with Kleronomos," the memo states. "Absent a transaction, the properties will proceed through the foreclosure process. The bank's attorney predicts that the foreclosure cases will be complete in late summer 2014, at which time Kleronomos will lose title to these properties."
It also states that the receiver could enter into leases for the properties but would have to be confirmed by the judge hearing the foreclosure case.
"Any leases will survive the foreclosure such that the next property owner will be bound by the terms of the lease," the memo states.
Stephanides told trustees that the buildings could either be sold or leased and that both options are being explored.
Trustee Adam Salzman asked whether the village had any "legal leverage" to speed the process or "put additional pressure on the property owner."
Stephanides said the legal department has held meetings with Harrington to make him aware of code violations and how it would affect the marketing of the property.
Village Manager Cara Pavlicek said the village already has cited Kleronomos with various building code violations, but there is only so much the village can do through its vacant-building ordinance.
"We certainly haven't withheld enforcement actions with code violations," she said, the village already has cited Kleronomos for not shoveling snow from sidewalks in front of the buildings.
Pavlicek said the vacant-building ordinance, which sets standards for upkeep of empty buildings, needs to be strengthened.
"Some communities have greater teeth in vacant-building ordinances than we have, and we at least want to tee up the policy considerations for the board to say what level of aggressiveness are you comfortable with in that area," she said.
Salzman said updating the ordinance should be put "on the front burner."
"Since 2011, there has been a fair amount of attention given and paid to the arts district, and I don't think there's anybody on the board who would say they are not 100 percent supportive of the arts district," Salzman said. "I think the quagmire is these vacant properties, and if we had some more tools at our disposal to nudge them out of there, that would be tremendously helpful."
In addition to the building on South Taylor, the Kleronomos properties in foreclosure on Harrison are at 146-148, 200-210, 201-211, 213-215 and 217-219.
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