Beal Bank files foreclosure on former hotel that housed Cubs
(Crain's) — A Dallas bank known for buying distressed loans is seeking to foreclose on an $8.2-million mortgage on a historic former hotel near Wrigley Field, where during the 1940s many Chicago Cubs lived during the baseball season.
Beal Bank alleges that a partnership led by veteran real estate investor Dennis Egidi failed to make loan payments to the bank and also made unauthorized distributions of money from the accounts of Sheridan Plaza, 4607 N. Sheridan Road, according to a complaint filed June 24 in Cook County Circuit Court.
Because of a unique loan provision that allowed some interest payments to be deferred until the loan matures, the total amount due is more than $15.8 million, the complaint says.
Mr. Egidi, of Libertyville-based Egidi Group, did not return calls requesting comment.
Today, Sheridan Plaza is a forlorn 12-story structure, housing 140 low-income rental units. But when it was built in 1919, it was a luxury apartment hotel, anchoring a vibrant neighborhood that became known for night spots like the Green Mill Gardens and the Aragon Ballroom. Those glory days lasted at least though 1945, when the Cubs last went to the World Series and many players lived in the hotel.
In a 1995 interview, centerfielder Andy Pafko remembered walking to and from Wrigley with pitching ace Claude Passeau, who also lived in Sheridan Plaza.
"I liked saving the streetcar fare because I was sending home money to help dad pay off the mortgage on the farm," Mr. Pafko told the Chicago Tribune. "Sometimes, fans would keep us company for a block or two."
In a twist, Beal Bank may add another colorful chapter to the building's history. The bank's founder, D. Andrew Beal, is better known as a buyer of distressed loans than a maker of new ones. After virtually sitting out the hot lending market between 2004 and 2007, his bank has invested about $5 billion, according to an April 27 profile in Forbes magazine, which called him, "The banker who said no."
A spokesman for the bank declines to comment.
After those glory days, Sheridan Plaza eventually fell into disrepair and was abandoned until the late 1970s, when the Egidi-led partnership bought it for $1.1 million, according to chicago.urban-history.org, a Web site about the social history of Chicago in the 1920s and 1930s. In 1983, the building was renovated and converted into apartments.
Beal Bank acquired the loan on Sheridan Plaza in 2001 from the U.S. Department of Housing and Urban Development, according to the complaint. The loan, in the original amount of $8.6 million, was issued in 1983 apparently to finance the renovation and conversion to rental units. With an annual interest rate of 7.5%, it wasn't scheduled to come due until March 31, 2012.
But the Egidi partnership eventually defaulted on the loan, which was then taken over by HUD. In 1995, HUD agreed to restructure the loan, according to a copy of the agreement attached to the complaint.
Under terms of that agreement, the partnership was required to make monthly loan payments of $14,725. In addition, the partnership was supposed to pay half of any money over that amount left in the operating account after payment of operating expenses. Accrued, unpaid interest was supposed to be paid when the loan matured in 2012.
The interest now due is more than $7.6 million, the complaint says.
