Controversial fund to auction former Dominick’s site
By Eddie Baeb, May 27, 2009
(Crain’s) — A $7.9-million loan on a former Dominick’s site in Lake View is turning into a sour deal for a controversial investment fund managed by developer Allison Davis and a nephew of Mayor Richard Daley.
The fund managed by Mr. Davis and Daley nephew Robert Vanecko is seeking to auction off a site at 3012-3036 N. Broadway Streetafter an apparent default on the mezzanine loan by a venture owned by little-known Chicago developers Michael O’Connor and Jonathan Zitzman, according to a recently published notice of public sale.
The developers planned a 53-unit condominium building and a bigger Dominick’s to replace a store destroyed by fire in 2005.
The auction comes just a couple months after news reports that Chicago’s inspector general is investigating millions of dollars in investments by city pension funds in the fund, called DV Urban Realty Partners L.P., according to news reports. The auction is to take place June 5 at the office of law firm DLA Piper LLP, according to the notice.
Messrs. Connor and Zitzman bought the site for $16 million in early 2007 through a venture called Broadway 3012 LLC from the founding family of Dominick’s Finer Foods LLC, the DiMatteos, according to property records.
The new Dominick’swould have been twice the size of the original 20,000-square-foot store. In early 2008, the developers refinanced the property with a $10-million first mortgage from First Bank, based in suburban St. Louis, and a $7.9-million mezzanine loan from Urban Broadway Mezz LLC — an affiliate of DV Urban Realty, which is run by Mr. Davis and Mr. Vanecko. Mr. Davis’ son, Jared Davis, is also a manager of Urban Broadway Mezz.
Dominick’s had a lease in place for the new development, according to property records, and there was a groundbreaking last fall, although work didn’t get far. The developers are holding out hope, however, and in a statement blamed the credit crunch for the project’s woes……
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Man, I am trying to be optimistic that Broadway 3030 will still take place, even after the auction takes place but it doesn’t look promising at all. Broadway 3030′s sales center has looked closed for some time and I just noticed that their website is shut down as well. To be honest, a grocery store or some other major retail space would be amazing for this enormous, empty lot and it would be a shame to have the lot sit empty for any longer.