Updated Nov. 13, 2012 – 12:55 p.m.
The three-partner developer team who built Forest Park’s 193-unit Residences at the Grove was sued for their personal assets by a bank last month for failing to pay off an $11 million construction loan.
Seymour “Sy” Taxman, Timothy Hague and Timothy Anderson signed personal guarantees backstopping construction loans for the Grove, which was built in 2007 as the real estate market tanked.
Taxman is head of Skokie-based Taxman Corp., a development firm with a history of projects in River Forest, Oak Park and Forest Park. Anderson is CEO of Focus Development, Inc., based in Northfield, which built the complex and still owns 25 percent of the units. Hague is a River Forest resident who has partnered in development deals locally and runs Keystone Ventures LLC.
Glenn Taxman, lawyer at Much Shelist in Chicago, said Sy Taxman would have no comment on the lawsuit. Hague did not immediately return calls. Anderson was not available and did not return an email seeking comment.
The partnership originally borrowed $25 million in 2005 from the now-defunct Midwest Bank, according to a complaint filed Oct. 24 in federal court. Midwest failed, and its assets were acquired by FirstMerit bank in Akron, Ohio, which is why the suit was filed in U.S. District Court in Chicago.
According to court documents, the loan was renegotiated seven times, with the bank writing down the loan to a final $11 million, including interest and attorneys’ fees. A final deadline of Oct. 5 was set for a partial payment. According to documents, the three partners were to come up with a “guarantors paydown” of $500,000. They were then to refinance the amount of $7,500,000.
The three were also required to come up with $1,800,000 to be applied to the principal balance of the loan in the form of 10-year promissory notes. Taxman was to pay $659,963.47 and Hague was asked for $144,870.03. Anderson was asked for a promissory note of $804,833.50. The group was also asked to put aside an interest reserve of $76,218.22.
But the deadline came and went, and the bank claimed that the partners’ failure to pay “constitutes an event of default.”
The Grove covers 6.3 acres at 7757 Van Buren St. near the Forest Park Blue Line station. At the time it was built, condos were priced from $181,990 to $258,990 for a one-bedroom and between $288,990 and $442,990 for two- and three-bedroom units. Between 2007 and 2011, six condo units and one townhouse were foreclosed, said Tim Davis, of M&M Property Management.
Focus Development still owns 39 condominiums in the Grove, as well as four townhomes. Timothy Anderson told Crain’s Chicago Business that Focus-owned units are rentals because the company believed they’d hold their value after the mortgage crash. Anderson was not available to speak to the Forest Park Review.
But if Focus is forced to liquidate the 39 units at the Grove, local condo owners fear they’ll take another hit to property values.
“That would be terrible for us,” said condo owner Leah Shapiro. “Because of the market, a lot of people are under water and have been selling their units for less than they’re worth.”
As an owner, Shapiro said the tenants in the rental units were good neighbors.
“Right now Focus is doing the right thing by us,” she said. “And our management company, M&M, is great, and that means a lot.”
The president of the Grove Condominium Board declined to comment.