Compass Bank, the lender behind the South Side shopping center where Wal-Mart Stores Inc. wants to open a Supercenter, has given the developer a deadline of May 24 to get a deal with the city or risk losing funding for the site, according to documents filed with Cook County.Well I suppose the stakes are higher, now!
It is the first time the Birmingham, Ala.-based bank has set a deadline for the Wal-Mart deal, or acknowledged that the loan hinged in some part on getting Wal-Mart into the property.
The tougher terms come as banks nationwide are feeling the impact of the growing commercial real estate crisis and property developers are finding it increasingly difficult to renegotiate loans. The South Side shopping center, called Chatham Market, has only a few tenants and was counting on Wal-Mart to draw the crowds necessary to support the other stores.
Instead, the troubled property is caught in the crossfire of an escalating battle between the world's largest retailer and union's recently revitalized national effort to organize the discount chain's 1.4 million U.S. workers. Bentonville, Ark.-based Wal-Mart has been pushing for years to make Chicago a beachhead to expand into the inner cities of the northern U.S., where it has a slim presence, only to be stymied by organized labor.
As of late June, developer Archon Group LP, a unit of Goldman Sachs Group Inc., owed $22 million in unpaid principal on a $42 million loan that dates to September 2005, according to documents filed July 2 with the Cook County Recorder of Deeds. Compass Bank had demanded a payment of $2.6 million "immediately" when the loan amendment agreement was signed June 29, according to the records.
Archon tried in vain to sell the property last year.
The 50-acre site that Chatham Market occupies is virtually vacant. Lowe's Cos. opened a 117,000-square-foot home-improvement store in December 2007 without raising any political fuss. Potbelly Sandwich Works opened in March 2008. And discount grocer Aldi signed a lease to build a 17,000-square-foot store in late 2010.
Dispatches from Chicago's south side.
Sunday, August 2, 2009
Bank gives Wal-Mart until May to secure South Side site
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