Positively Palermo must thank a homeowner from the great North for alerting the site of this news. An article titled "Shipka sued over personal loan guarantees" appeared on a Crain's Chicago business site. Details:
- "Ronald Shipka Sr. is the latest Chicago developer stung by the housing market, as MB Financial sues to collect about $4.7 million on two projects in Palm Springs ...
- The bank is seeking to enforce loan guarantees made by Mr. Shipka, one of Chicago's most successful developers, whose local joint ventures include the 397-unit Walton on the Park on the Near North Side and several towers in Museum Park in the South Loop ...
- Mr. Shipka did not return a message requesting comment ...
- In the larger of the two cases, MB Financial is seeking to collect $3.1 million from Mr. Shipka, who guaranteed a portion of a construction loan used to build a townhouse project ...
- Called Palermo ... only 117 of the proposed 211 units were completed, according to a Web site for residents in the development ...
- The $30-million loan went into default in May when the venture building the project did not make required interest payments. The balance due was $13.2 million on July 30 ...
- Separately, the bank is seeking to foreclose on the unsold portions of the development ...
- In the other case, MB Financial is seeking to collect about $1.6 million from Mr. Shipka, who guaranteed a portion of a $3.6-million loan on a 7.1-acre development site near the Palm Springs Convention Center. Five condos were built on the site, which was zoned for 81 units ...
- That loan also went into default in May when the venture that controls the site did not make required interest payments. The balance due was about $3.2 million on July 26."
The full story by Thomas A. Corfman is on www.chicagobusiness.com. The complete address is:
http://www.chicagobusiness.com/article/20100818/CRED03/100819868/shipka-sued-over-personal-loan-guarantees
In response to a Positively Palermo e-mail, Mr. Corfman writes: "I hope you found the story interesting." We at Palermo certainly do. But this story is far from over for the courts, the banks and maybe even Palm Springs parties that may join the battle now that the LLC's loan conditions and personal guarantees are known. Miss Penny Lane says: Regardless of all that, we residents of Palermo are becoming more in control of our own destiny because of Enterprise's withdrawal.
2 comments:
Renters should contact MB Financial before paying their September rent to Michael Heath. Protect yourself. Michael Heath / Village Properties has a financial interest.
I think the board did a bit of clean up on Monday after reading the blog comments here and then starting asking for more input. Power of Penny Lane's site (?). The HOA is not beholden to Heath and VPM. The HOA dues on the rentals must be paid or there's a legal problem. Once or if MB Financial takes over the 30 units this month, they will pay the HOA fees, at least eventually. Banks eventually pay the outstanding HOA fees from the time they have owned a property, unlike deadbeat homeowners going into foreclosure. The only real concern about not getting HOA fees was during the three months that Enterprise stilled owned before foreclosure. HOA fees must be paid whether the units are occupied/rented or not. We're not beholden to VPM and VPM is not management of Palermo, but the board or DRM seem to be giving them "special" authority. Heath has no business at the executive board meeting. There are also concern over why one year leases are actively being signed right now when those units are in foreclosure. It will be something to see what MB Financial has to say about that! In any case, wouldn't it be better for MB Financial to take the units over now and sell them, to get in owners?
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