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River North company sues Howard Hughes Corp. over General Growth site

Photo by Steven Dahlman

(Above) West side of General Growth building, designed in 1954 by Graham, Anderson, Probst & White, from across the south branch of the Chicago River.

May 21, 2015 – Billionaire Howard Hughes has been dead for 39 years but he is still playing hardball, says a Chicago real estate developer.

Development Resources Inc., located on North Wells Street in River North, is suing Howard Hughes Corporation of Dallas, claiming the company is trying to cut it out of development deals involving the riverfront location of General Growth Properties, Inc.

The billionaire’s father started Howard Hughes Corporation in 1909. It became a real estate company in 1994, a subsidiary of The Rouse Company in 1996, and in 2004 it was purchased along with Rouse by General Growth Properties, a real estate investment trust that owns and manages shopping malls throughout the United States.

Howard Hughes In 2010, as General Growth Properties emerged from bankruptcy, Howard Hughes Corporation was spun off and became an independent company again.

(Left) Howard Hughes in 1947.

In 2014, it bought the land on which General Growth’s headquarters is located. It is a property that could generate many millions of dollars in profit if sold for redevelopment.

When the Hughes company purchased the land, control of it was supposed to remain in a limited liability corporation that Development Resources, General Growth, and Hughes Corporation had founded. Hughes, however, gave control, and any future profits, to one of its own affiliates, according to the complaint.

Development Resources says its deal with General Growth and Hughes Corporation, to share equally any profits from the land, dates back to the 1990s. The lawsuit was filed on May 13 in Cook County Circuit Court.

Development Resources says Hughes Corporation has withheld information and misled them about the sale of the property. They are asking the court to rescind the sale, appoint a receiver to manage the LLC, require Hughes to account for all property and proceeds, and award Development Resources unspecified damages.

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