December 29, 2007 – The road may be getting rocky for Motor Row on 2300 South Michigan Avenue. Sedgwick Properties has filed a lawsuit against Andrius Augunas and seeks to recover over $350,000 in consulting fees on the project. Sedgwick claims Augunas hired them to help gain financing for the Motor Row project with a fee of 1.25 percent from any loan secured to be paid to Sedgwick. The lawsuit also names the IndyMack Bank that provided the Motor Row loan along with Augunas’ development company, Rokas International.
Motor Row is currently under construction despite the controversy. According to an article in Crain’s, an IndyMac spokesman stated that money allotted to pay Sedgwick had already been spent though nobody seemed able to say where. A similar scenario occurred in late October when Augunas headed to court over another suit with Soloventure Incorporated over money they invested in other Augunas projects. Soloventure claims that $1 million that was supposed to go towards the Franklin Point development was instead diverted to other projects, thus prompting Soloventure to back out of funding two other South Loop Augunas projects. That suit was settled out of court, but the Motor Row dispute is just beginning.
Another sticking point is the shifting sales numbers at Motor Row that can’t seem to be pinned down. Appraisal Research Counselors put the number of units sold at 42 back in April. By October ARC cut that number down to 20, which Augunas says is inaccurate. He states that 48 units are sold and insists that the buyers will close and move in by sometime in mid 2008. Unfortunately, the obstacles faced by this development may be typical of what other Condo Builders in Chicago deal with in a slowing market.
[tags]Motor Row, Chicago Condos, Chicago Real Estate[/tags]