A prominent downtown Oak Park office building is in foreclosure, and its manager says that the departure of a local newspaper chain was the turning point that put it down that path.
The lender is looking to foreclose on a $4.8 million mortgage taken out to purchase the Oak Leaves Building, 1140 Lake St., five years ago. The property’s owner has failed to make payments since December, and $4.5 million remains to be paid on the loan, according to the complaint, filed Aug. 30 in the Cook County Circuit Court.
The five-story art deco structure is home to a Sprint franchise and Penzeys Spices on the ground floor, and formerly housed the offices of Pioneer Press’ west group, which includes the Oak Leaves and Forest Leaves. The building is owned by a limited liability corporation called 1140 W. Lake Street, for which the manager is listed as developer Seymour Taxman.
Reached Friday, Taxman said the departure of Pioneer Press, which took up 20 percent of the building’s rentable space, in October 2009 was a pivotal moment in the property going into foreclosure.
“The building was operating fairly well up until the Oak Leaves terminated their lease early, under the bankruptcy of the Sun-Times,” he said. “The termination of that lease was the turning point, negatively, on that building.”
The owners had been working to restructure the $4.8 million loan for months, according to Taxman, and the foreclosure lawsuit came as a shock.
“Apparently, during the course of that negotiation, the lender’s agent elected to file a foreclosure action,” Taxman said. “It certainly was a surprise to me when I saw the complaint on my desk.”
Taxman insisted that his Skokie-based Taxman Corp. — which was behind other local projects, such as the Shops of Downtown Oak Park, which includes Old Navy and Gap — does not own 1140 Lake St., and was only managing the property. Taxman said he, personally, owned a “minority interest” in the corporation, but he declined to say whether he still does. Taxman would not identify the majority owner of the LLC. The most recent property tax bill — paid on March 2, totaling $188,323 for the first installment in 2009 — was sent to the Taxman Corp., according to the Cook County Treasurer’s office.
Pioneer Press vacated the building in October 2009, moving down the street to significantly smaller quarters at 1010 Lake St. The new spot “has more windows and better fits our technological needs,” according to an item in the Oct. 22, 2009, Oak Leaves.
The building was purchased by 1140 W. Lake Street LLC in March 2005 for $5.75 million, according to county records. The venture took out a $4.8 million loan from a subsidiary of Miami Beach-based LNR Partners Inc. in order to make the purchase. At the time, the Taxman Corp. president told Wednesday Journal that the purchase was an “investment opportunity,” as the property was full of tenants.
“We think it was a well-situated piece of property and it was well-leased,” former Taxman President Tim Hague said in 2005. “We look forward to owning and operating the building.”
Five years later, about 50 percent of the building’s 65,000 square feet is empty, according to a source in the local real estate industry.
David Lynch, the attorney representing the lender in the foreclosure complaint, declined to comment. McCollom Realty in Oak Park started acting as the leasing agent for 1140 Lake St. back in July, according to a report in the Oak Leaves. A call to Terry McCollom last week was not returned.