Monday, May 21, 2007

Uptown Theatre Draws Crowd of Suitors

The historic Uptown Theatre, which has defied redevelopment attempts and slowed the resurgence of its neighborhood since closing in 1981, is suddenly a hot property.Local concert promoter Jerry Mickelson and Block 37 developer Joseph Freed & Associates LLC are battling a group led by real estate investor David Husman over control of the foreclosed 1920s-era landmark, which also has attracted the attention of national concert promoters.Mr. Mickelson, co-founder of Jam Productions Ltd., wants to restore the 4,500-seat theater, which once hosted Prince, the Grateful Dead and other big acts, as a concert venue. In a foreclosure sale, a buyer may have to pay upward of $3.5 million to satisfy the outstanding mortgages, liens and money the city is owed for repairs. Renovation would cost about $40 million.
The fight for control of the theater reflects the Uptown neighborhood's improving fortunes. That revival would gain momentum from a redevelopment of the cavernous 1925 movie palace, which sits prominently on Broadway, Uptown's main drag.In addition to the court fight between Messrs. Mickelson and Husman — a matter complicated by uncertainty over who actually owns the building — the New York owner of Madison Square Garden and Radio City Music Hall tried to buy the Uptown last fall. The deal fell through in February. Los-Angeles concert giant Live Nation Inc. also considered buying it, sources say."Everyone in the business has looked at this theater," says state Rep. Greg Harris, D-Chicago, who worked on saving the Uptown as an aldermanic staffer for 14 years before being elected last year. "The community is hoping somebody will step up to the plate."Mr. Mickelson, whose company last year bought the nearby Riviera Theatre and owns the Park West and Vic Theatre, declines to comment. So does Mr. Husman, a former director of MB Financial Inc. and chairman of real estate firm Equibase Capital Group LLC.Mr. Mickelson's bid for the Uptown began in March when he paid $50,000 for a company with a stake in the land trust that owns the theater. His group then acquired a defaulted $500,000 second mortgage on the property.He then sought to pay $1.3 million owed on a first mortgage, a debt taken over in December by Mr. Husman. But Mr. Husman promptly returned the check, saying the would-be buyers didn't have the right to pay off the mortgage because his company, Broadway for Uptown LLC, had already obtained a foreclosure judgment in February. Mr. Husman tried twice, in October and February, to buy the stake in the land trust that Mr. Mickelson now owns.Broadway for Uptown is using the "court as an instrument for its extortion," Mr. Mickelson's attorney, Rick Rein, a principal with Schwartz Cooper Chtd., wrote in a May 3 court filing.
Last week, Cook County Circuit Associate Judge Darryl Simko blocked Mr. Mickelson's attempt to take control of foreclosure proceedings and questioned whether the concert promoter actually has an ownership stake in the property.After the ruling, an attorney for Mr. Mickelson handed another $1.3-million check to Mr. Husman's lawyer. That check also was returned, Mr. Rein says.In March, Mr. Mickelson's group acquired Robert Lunn's interest in a dissolved company believed to own a land trust that holds the title to the property. Mr. Lunn, Scottie Pippen's former financial adviser who filed for bankruptcy in 2005 after the former Bulls star sued him, got his stake in the Uptown several years earlier from real estate developers John Terzakis and Rudy Mulder.Madison Square Garden Entertainment may have triggered the current spat in September when it offered $300,000 for Mr. Lunn's interest, a letter from its president, Jay Marciano, shows. His spokeswoman declines to comment.Such sagas are not new to the Uptown, which after it closed was owned by convicted slumlord Lou Wolf. In 2002, the president of a non-profit group created to buy and renovate the theater was charged with using $40,000 of the project's money for personal use."This was an asset that nobody thought had any value," says David Neff, a partner with DLA Piper US LLP and lead attorney in Mr. Lunn's bankruptcy. "It's interesting to see that there are two parties fighting over it now."

1 comment:

  1. I'll believe it when I see it - as is, this is 25 years of neglect from MAS and the Osterman crowd. I just hope and pray that they don't end up tearing it down while battling over competing plans now.