Design firm president faces lawsuit on office building
(Crain's) — A venture managed by Space LLC president Jean Bellas is facing a foreclosure lawsuit seeking nearly $10 million on a River North loft office building where the high-flying interior office design firm is located.
A venture managed by Ms. Bellas defaulted on a four-year-old loan on 363 W. Erie St., according to a complaint filed July 3 in Cook County Circuit by a subsidiary of Manulife Financial.
In addition to the foreclosure claim, the Toronto-based financial services company is suing Ms. Bellas personally because she allegedly guaranteed the payment of property taxes. Manulife alleges it paid the taxes, totaling nearly $1.2 million.
Space, which Ms. Bellas founded in 1995, is not a defendant in the case.
Attorney Donald B. Levine of Chicago law firm Latimer LeVay Jurasek LLC, which represents Ms. Bellas and the venture that owns the building, declines to comment. Peter Sarasek, a partner in the Chicago office of law firm Quarles & Brady LLP, which represents Manulife, also declines to comment.
The current challenges facing Ms. Bellas are a stark contrast to the late 1990s, when business magazine Fast Company named her firm as one of two "Architects of the New Economy." In the 1999 story, Ms. Bellas said the firm focused on "what spirit can you build into space that ties back to the culture of that company."
Space has 10 offices worldwide, including two overseas, according to the company's Web site.
The 112,600-square-foot structure on Erie was built in 1910 and renovated eight years ago, according to real estate research firm CoStar Group Inc. It is about 82% leased.
Manulife says it didn't learn until last month that the property taxes were unpaid. The failure to pay the property taxes is one of three reasons why the loan is in default, according to the complaint.
Almost two years after obtaining the loan from Manulife, the venture obtained a second mortgage from First Midwest Bank without Manulife's consent, the complaint says. That loan, in the original amount of $4.2 million, was secured by four properties, including 363 W. Erie, another River North property at 520 W. Erie St., and residences on the Northwest side and in Piedmont, Calif.
A representative of Itasca-based First Midwest Bank declined comment on the status of that loan.
Manulife also alleges that the venture that owns 363 W. Erie missed a June 10 mortgage payment. The amount of the payment was not disclosed.
Manulife is seeking a court-appointed receiver to manage the property during the foreclosure case.
