Toppled Superior Street tower project leads to lawsuit by Chinese investors
Loop North News

LEGAL

(Above) Rendering by Skidmore, Owings & Merrill LLP of The Carillon, inserted into an image by Rob Sall.

15-Dec-18 – The 90 Chinese investors who each invested $550,000 in a hotel/condominium proposed for Rush & Superior Streets have filed a federal class action lawsuit, a year and eight months after the project was cancelled.

The Carillon would have replaced three 19th century Victorian row houses at 42, 44, and 46 East Superior Street with 246 condo units, 216 hotel rooms, 120 hotel timeshare units, and 30,000 square feet of retail space. Concerned about its impact on traffic in the neighborhood, 42nd Ward Alderman Brendan Reilly rejected the proposal in April 2017. Architectural preservationists are now trying to protect the row houses from demolition.

The lawsuit, filed on November 28 in United States District Court, alleges securities fraud, breach of contract, and breach of fiduciary duty.

Seven defendants are named in the suit, including Symmetry Property Development of New York and its managing partner, Jeffrey Laytin.

Annabelle Yao, a Chinese citizen, is suing on behalf of herself and the other investors, all of whom reside in China and collectively invested $49.5 million in the project, money they now say they cannot get back.

At the time, the project was called Carillon Tower and described as a 42-story building with a 200-unit Hilton hotel, 154 apartment units, 225-seat Gibson’s restaurant, and parking spaces for 154 vehicles.

cansine.com

(Left) Screen capture of a Chinese website on which, according to a federal lawsuit, investment in “Carillon Tower” was offered.

Investors thought money was safely in escrow

According to Yao, the investors believed their money was going to be held in escrow by TD Bank until the project was submitted to the Chicago Department of Planning and Development. That never happened but, according to the lawsuit, the money was released to developers anyway. TD Bank is now one of the defendants.

“Defendants failed to prominently disclose the fact that, based on long-standing policy and procedure for all development in the City of Chicago, and the defendants’ knowledge of such policy and procedure, the project required alderman/ward approval prior to the submission of a project plan to the city commissioner of development and planning,” reads the lawsuit, “and that the submission of any project plan to the city commissioner without such alderman/ward approval would result in rejection by the commissioner and failure of the project.”

According to the lawsuit, the project was presented to the Chinese investors as an EB-5 project. The EB-5 program was created in 1990 to stimulate the U.S. economy through capital investment by immigrant investors. If an immigrant investor puts $500,000 into a new commercial enterprise that creates at least ten full-time jobs, the investor qualifies for admission to the United States as a Conditional Permanent Resident.

They are asking for a full refund of their money, plus interest, court costs, and attorney fees.

 Previous story: Alderman sides with neighbors, rejects 60-story tower near Holy Name

Peter von Buol contributed to this story.

By Steven Dahlman | Loop North News | sdahlman@loopnorth.com

Published 15-Dec-18 9:33 PM

Loop North News

FREE WEEKLY EMAIL UPDATE

What’s news in the Loop and Near North neighborhoods of downtown Chicago.

Signup for our weekly email. No ads and no charge. Just enter your email address here...

Number of subscribers:
See this week’s update

More stories


Through Tuesday
A Chicago holiday tradition since 1976, the International Music Foundation’s Do-It-Yourself Messiah brings together a world-class conductor and soloists, an all-volunteer orchestra of local professionals, and amateur musicians. Audience members are encouraged to step into the role of the chorus in a thrilling performance of George Frideric Handel’s masterpiece, Messiah. 7:00 p.m., Harris Theater for Music and Dance, 205 East Randolph Street. Tickets: $15. Map. More info.

January 19
Hosted on Martin Luther King, Jr., Day weekend, Too Hot to Handel: The Jazz-Gospel Messiah is a unique take on Handel’s classic oratorio. Featuring three incredible soloists, an uplifting choir, a fiery orchestra, an electrifying jazz combo,and famed Detroit pianist Alvin Waddles, ‘Too Hot’ will have you clapping, singing, and dancing in the aisles this holiday season. January 18 @ 7:30 p.m. January 19 @ 3:00 p.m. Auditorium Theatre, 50 East Ida B. Wells Drive. Tickets start at $29. Map. More info.
More events

Biggest Gainers & Losers

BOEING CO.
341.67 DN 4.62

NORTHERN TRUST CORP.
108.04 DN 1.84

ENVESTNET INC.
69.95 DN 1.55

MB FINANCIAL INC.
42.38 DN 1.52

Downtown Chicago Stocks