Block 37 dispute could delay CTA pedway opening

(Crain's) — The foreclosure lawsuit over Block 37 could delay the opening of the CTA station's pedway beneath the State Street project.

At a court hearing Monday, lawyers for Bank of America Corp. said the lender won't fund certain construction costs — including money the landlord is to contribute for tenant buildouts — unless a receiver is appointed.

Cook County Circuit Court Judge Margaret Brennan set a hearing for Nov. 20 to hear arguments in the foreclosure case and B of A's request to appoint CB Richard Ellis Inc. as receiver, who would oust developer Joseph Freed & Associates LLC from overseeing day-to-day operations.

The city's attorney, Chief Assistant Corporation Counsel Steven Holler, said funding for the pedway shouldn't be held up by the hearing's timing because the money and work needed to open the pedway haven't been disputed.

"Any funding to open the pedway should not be in dispute," Mr. Holler said.

The city's motion to intervene in the case was granted, though as of now the city isn't taking sides. Mr. Holler told the judge that the city would work with a receiver should one be appointed, but criticized B of A's filings for naming just six CB Richard Ellis executives who would work on the project, compared with 20 Freed has devoted to Block 37.

"What we were really hoping to see was a rock-solid commitment comparable to the 20 people Freed has on the project," Mr. Holler told reporters outside the courtroom. "There's a Mt. Everest-sized learning curve."

While attorneys for Freed and the bank raised the prospect that issues could arise over funding that affects the pedway before Nov. 20, Mr. Holler says the city believes the pedway should open on time.

"I'm planning to walk through the pedway to attend the hearing on Nov. 20," Mr. Holler said.

A spokeswoman for Freed, which has filed to have the foreclosure suit dismissed, says the developer was "very happy" that the judge didn't feel compelled to make an emergency ruling in the matter.