The reconstruction of the former Roos Cedar Chest factory into a residential neighborhood is stalling, and the sagging economy is to blame, according to a project manager. Work at the Harrison Street site is some six months behind schedule and all eyes are on preconstruction sales goals, which must be met to trigger the next round of funding.
Tomasz Litwicki, a partner with owner Alex Troyanovsky, confirmed recently that sales for the loft condominiums and adjacent townhouses have been lackluster. Litwicki declined to release detailed sales figures, but said the condo units are selling at a better pace than the town homes. Plans call for 70 condos to be developed within the shell of the vacant commercial property. Another 28 townhouses are to be built on the western edge of the property, listed at 7329 Harrison St.
“Sales have not been the greatest, obviously,” Litwicki said. “We’re not immune to the economy.”
Work at the site has also been delayed by a permitting process with the municipality that has left crews waiting. According to both Litwicki and Village Administrator Mike Sturino, much of the exterior work has been held up by structural concerns with a brick wall on the west side of the building. Sturino could not estimate when the necessary permit for that portion of the project might be issued, but said its release should lead to “a lot of the exterior work” getting underway.
Sturino acknowledged harboring some concern with the pace of the project, and said he met with Litwicki in late July.
“I expressed our concerns at the progress and the general state of the real estate market, and had a very candid conversation about that,” Sturino said.
The completion of the project does not appear to be in jeopardy and the village’s priority – the renovation of the vacant property – is not taking a backseat to the construction of new townhouses, he said.
“I would agree with him that sales aren’t where they need to be,” Sturino said of his discussion with Litwicki. “It needs to move at a faster clip.”
In a worst case scenario, Litwicki said the condos would stand alone on the site.
A construction loan through Amcore Bank for $15.525 million was signed for in April 2007 by Litwicki and Troyanovsky, according to records filed with the Cook County Recorder of Deeds. It is the most substantial line of credit issued for the project, far exceeding a $4.54 million loan also issued in April 2007.
The limited liability company through which Troyanovsky owns the Roos property has already paid a $4.56 million loan.
According to Litwicki, the development is not running out of money, due in part to a “very healthy” interest reserve. Litwicki said he met recently with representatives from Amcore Bank regarding the $15 million loan.
“I don’t see anyone trying to pull the plug on the project,” Litwicki said.
Though it may have no impact on the project’s follow through, the developer who initiated this project has essentially cut his ties. Troyanovsky left the United States several months ago for Eastern Europe, according to Litwicki, and has had almost no role in the work since plans were approved by the village in June 2007.
Local architect John Schiess was involved in the early stages of the project, but was pulled off by Troyanovsky within months of the plans being unveiled. Schiess, who was working with Troyanovsky on several other projects as well, said the developer’s enthusiasm was soured by a lengthy approval process and the declining market.
“As things started moving and taking a long time, Alex’s appetite for the Chicago market has lessened,” Schiess said.
Both Sturino and Litwicki said Troyanovsky’s absence should have no real impact on the project. The plans are driving the day-to-day decisions and the capital is in place.
“Alex brought a lot of energy and vision … but the rest of the project team is still the same and they bring a lot of energy and expertise that we’re excited about,” Sturino said.