The downtown Oak Park building housing the FFC gym is facing foreclosure on its first three floors, the majority of which are leased by the health club. The first floor commercial space is currently unoccupied. The pending foreclosure status only pertains to the commercially zoned spaces, extending from 1114 to 1126 Lake St., and does not apply to the building’s resident-owned condominiums.
Financial services firm Wilmington Trust filed for foreclosure on the 63,317-square-foot commercial property in February, after building ownership defaulted on its mortgage. The property is owned by legal entity 1120 Retail LLC, which entered into the $12.8 million mortgage agreement in 2017.
The property will be going up for online auction next month. The bidding starts at $4.5 million. The auction begins Oct. 17 and lasts through Oct. 19.
While the auction listing refers to the property as “well-maintained,” its façade is in the process of being repaired. Steve Cutaia, the Village of Oak Park’s chief building official, told Wednesday Journal over the summer that the concrete panels that covered the building’s exterior are being replaced with a new material, similar looking to the original.
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“They were cracking,” Cutaia said of the concrete panels. “And the glue was kind of coming unglued.”
Much of the scaffolding has been removed, but the repair work has been prolonged due to a shipment of new materials arriving damaged. Construction crews await the delivery of new materials to finish the job.
N.A.I Farbman is serving as the property’s court-appointed receiver. Receivers are neutral, third-party custodians appointed to protect property under the control of someone being sued, according to the U.S. Securities and Exchange Commission. The SEC recommends appointing a receiver when it is feared a company or individual may dissipate or waste corporate property or assets. A representative from N.A.I Farbman said that the company is not involved in auctioning the property.
The legal entity currently in ownership of the property is managed by another legal entity, 1120 Retail Inc.; its president is listed as Antonio Vallado. Wednesday Journal has requested comment from Vallado. The Journal has also reached out to FFC management for comment on how the property’s legal status affects its leasing agreement.
The foreclosure filing is just one of many legal tussles involving the building. Since its 2006 construction, the building has been the object of a parade of lawsuits. The building’s condo association sued 1120 Retail LLC, as well as developer Richard Curto and Trapani Construction, in 2009 due to reported shoddy construction.
The condo association, as Wednesday Journal previously reported, was forced to take out a loan and levy a special assessment to condo owners to make building repairs. At the time, those repairs were estimated to cost upwards of $1.5 million.
Curto’s company, RSC & Associates, was also sued in 2009 by the Village of Oak Park over the building’s poor construction. The suit argued that the developer failed to meet the guidelines of its 2004 redevelopment agreement, under which the Village of Oak Park gave village-owned property to the developer and reimbursed the costs of its demolition and remediation.
RSC & Associates was previously sued in 2007 by Brandenburg Family Associates. The company had paid $1.5 million toward buying the building’s commercial space, but the deal fell through. The lawsuit alleged the down payment was not returned to Brandenburg Family Associates.
Curto, saddled with roughly $5.9 million in unpaid debts, filed for bankruptcy in 2011.
The commercial part of the building is roughly 74% occupied as of this past August, according to its online auction listing, but 1120 Retail LLC has had trouble keeping tenants in the ground floor retail space. The building lost a major tenant in 2019 with the closure of Bar Louie restaurant. Bruegger’s Bagels and Mattress Firm also rank among the building’s previous ground floor tenants.
A year and a half after Bar Louie shuttered, the Oak Park Zoning Board of Appeals voted to allow 1120 Retail LLC to convert the ground floor into a co-working office space. Vallado alluded to the company’s financial difficulties at that zoning board meeting on Sept. 17, 2020.
“We’ve been having a hard time leasing the space,” Vallado told the ZBA. “We’re in hardship right now with the bank.”
