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* Problems with the Thompson Center sale? Uh-oh…
Boston-based Winthrop Realty Trust and Marc Realty of Chicago, commercial real estate investors that own the rights to about 70,000 square feet of retail space in the glassy, 16-story state office building in the Loop… which controls the food court from which Rauner made the Oct. 13 announcement, says it owns rights to lease out the space to retail tenants for at least another 19 years. Winthrop and Marc represent a significant obstacle to the state’s plan to level the Helmut Jahn-designed structure and sell the prime development land.
“We have not been contacted by the state at all,” Winthrop Chairman and CEO Michael Ashner said today in an interview. “We’ve received no notification. We understand there’s enabling legislation needed to make this (Rauner plan) happen. Up until now, we were assuming it’s business as usual, which is why we’ve invested substantial funds in the property.”
Ashner said Winthrop and Marc have 19 years remaining on a lease with the state, in which the venture pays the state rent and in turn leases out the space to restaurants and retail tenants, Ashner said. At the end of the lease, there’s a 10-year extension option that the state could decline “if they were going to do a major redevelopment,” Ashner said.
You have a lease-holder and you never talked to the company before deciding to sell?
posted by Rich Miller
Friday, Oct 16, 15 @ 3:00 pm
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The press conference was a charade designed to deflect criticisms of Rauner’s inaction on the budget and Munger’s lack of cash flow.
How can anyone believe otherwise?
Comment by Austin Blvd Friday, Oct 16, 15 @ 3:05 pm
That should be a relatively easy thing to just transfer to the new owner…but if it’s a full tear-down like Rauner was envisioning, that new owner will probably have to buy out Winthrop and Marc.
Comment by Arsenal Friday, Oct 16, 15 @ 3:06 pm
===You have a lease-holder and you never talked to the company before deciding to sell?===
“Hi Rich-
We meant to call them…
Thanks!
ck”
Comment by Oswego Willy Friday, Oct 16, 15 @ 3:08 pm
Blago-esque.
Comment by WizzardOfOzzie Friday, Oct 16, 15 @ 3:08 pm
What happened to operating the state like a business? Businesses do not operate in this way. Bust out schemes operate this way. They use chaos and bankruptcy as leverage to enrich themselves and leave others holding the bag.
Looks more and more like we are going to be “holding the bag” in more ways than one.
Comment by Concerned Friday, Oct 16, 15 @ 3:09 pm
Don’t worry, its only a contract.
Comment by BR Friday, Oct 16, 15 @ 3:09 pm
*Looks around the JRTC*
I wonder where those “substantial funds” they say they invested in the place went?
Comment by Ron Burgundy Friday, Oct 16, 15 @ 3:12 pm
When this sale turns into a costly quagmire — and I expect it will — I look forward to another round of Barickman’s hearings in “order to get to the bottom of things.”
Comment by Frenchie Mendoza Friday, Oct 16, 15 @ 3:13 pm
that’s running government like a business!
Comment by bored now Friday, Oct 16, 15 @ 3:13 pm
So the superstars never checked? If they didn’t check that, then they have no idea how much money that lease is worth and how that would directly affect the bottom line on negotiating the deal to sell. I have no words.
Comment by carbaby Friday, Oct 16, 15 @ 3:13 pm
This is what the leaseholder gets for not supporting the Turnaround Agenda…
Comment by PMcP Friday, Oct 16, 15 @ 3:15 pm
== Don’t worry, it[’]s only a contract. ==
Nicely done.
Friday afternoon win.
Comment by thunderspirit Friday, Oct 16, 15 @ 3:15 pm
I just got to thinking that this was another example of where Rauner shows up at places or programs he eventually wants to close or tear down. posing with FFA members, and then cutting funds for FFA out of the budget; posing with children at the State Museum and then announcing he’s shutting that down. So beware when Rauner comes to your place or to visit your program! Strange way to do things.
Look for Rauner to blame that lease on Madigan and the union bosses.
Comment by Joe M Friday, Oct 16, 15 @ 3:17 pm
governing by press telease, seeking to sell the thompson center, and refusing to consider any way but his own….
apparently somone thinks this is bleepin golden….. i had this nightmare already…. im ready to wake up….
Comment by Ghost Friday, Oct 16, 15 @ 3:21 pm
Research? We don’t need no stinking research!
Comment by Stones Friday, Oct 16, 15 @ 3:21 pm
Rauner will simply empty the building out of state employees. Leave the lease owners to try and sell food to an empty building.
Then let’s see how much that lease buy-out will be.
See, I can think just like Rauner. I know exactly what he’s planning. It’s fun and easy to play bust-out!
Comment by Frenchie Mendoza Friday, Oct 16, 15 @ 3:21 pm
“I called the fellas at Winthrop and Marc the evening of my decision to sell so we could, you know, sort of talk about how we’re gonna get things done. It was real cordial and I look forward to working with them in turning around this piece of land.”–fake Rauner
Comment by Gumby Friday, Oct 16, 15 @ 3:21 pm
Another Madigan era contract hampering Rauner.
Comment by Dr. X Friday, Oct 16, 15 @ 3:25 pm
Meh. I’m sure, like any lease, this one addresses any changes made on the part of either party. Penalties, buy-outs, whatever. I would guess the Governor would look at it the same way.
Comment by Anon Friday, Oct 16, 15 @ 3:25 pm
Someone as important as Governor Rauner can’t be bothered with details. Isn’t there someone to take care of this? Where is the shame van that the help uses? Get in it and drive up to Boston and tell them to we will bury them if they go legal.
Comment by Ducky LaMoore Friday, Oct 16, 15 @ 3:30 pm
Fake Governor: “Hey, get grass bowl, we need an amendment. Push the effective date back by 19 years on HB 4313. Yet another compromise by our office!”
Comment by 360 Degree TurnAround Friday, Oct 16, 15 @ 3:30 pm
ROFL.
Comment by King Louis XVI Friday, Oct 16, 15 @ 3:31 pm
Dr. X - I assume you’re joking, since leases are handled by the Governor, not Legislature.
Comment by Anonymous Friday, Oct 16, 15 @ 3:32 pm
The state can sell the building with existing leases. This happens every day in real estate transactions.
Comment by Tone Friday, Oct 16, 15 @ 3:35 pm
The superstaffer assigned to CMS oversight has some splaining to do.
Actually, I’d be surprised if there was not out clause in the contract. May be costly, but that goes into the math as to whether it is a good deal. Oh wait, Rauner doesn’t want any public review of the proposal. We should understand that he does everything for the good of the people and we shouldn’t question his methods or results.
Comment by Norseman Friday, Oct 16, 15 @ 3:37 pm
oops. I guess Mike Madigan and the legislators, ex-GOP governor and lease-holders he controls just don’t want to turn our state around.
Comment by Chicago Cynic Friday, Oct 16, 15 @ 3:37 pm
Tome is correct. You can sell a building with existing leases and most sales are done with leases already in place. Marc and Winthrop know this but are out looking for concessions. While they might win some concessions, it isn’t going to hold up the sale.
Comment by Name/Nickname/Anon Friday, Oct 16, 15 @ 3:43 pm
Wow, that is a money making scheme! Let’s lease out the top floors too to maximize our profit before we sell it out from under them!
Comment by Anonymous Friday, Oct 16, 15 @ 3:43 pm
Tone:
I believe the point was that nobody bothered to give these guys a heads up. And I doubt it’s as “easy” as you make it out to be.
Comment by Demoralized Friday, Oct 16, 15 @ 3:43 pm
Are we sure Blago isn’t still running the show?
Comment by jerry 101 Friday, Oct 16, 15 @ 3:44 pm
===The state can sell the building with existing leases. This happens every day in real estate transactions.===
This is correct. However, a lease with 19 years to go could have a large impact on the selling price of the building depending on the plans of any potential buyer. This impact could be either directly on the selling price or it could reduce the number of parties interested even bidding on the purchase. Either way, I see the lease costing the taxpayers of Illinois significant sums if the building is sold.
Comment by Hit or Miss Friday, Oct 16, 15 @ 3:49 pm
I do not believe this is that uncommon in real estate. Property is bought and sold all the time that has current leases.
Comment by Ahoy! Friday, Oct 16, 15 @ 3:49 pm
The question would be, can you demolish a building with a long term lease? If not, then who is going to buy that building?
Comment by 360 Degree TurnAround Friday, Oct 16, 15 @ 3:51 pm
Keystone Superstars at work again, it seems…
Comment by Gobsmacked Friday, Oct 16, 15 @ 3:52 pm
=== Are we sure Blago isn’t still running the show? ===
There were quite of few of us who saw the similarities between Blago and Rauner in 2014. We saw through Rauner’s rhetoric and feared that he would continue the dysfunction that plagued state government during the Blago years. What I didn’t foresee was the level of dysfunction he would take us to.
Comment by Norseman Friday, Oct 16, 15 @ 3:52 pm
The point some of y’alls are ignoring is that the sale seems to be assuming the new owner would then tear the building down. A 19 year lease makes that aspect of the sale…problematical.
Comment by GraduatedCollegeStudent Friday, Oct 16, 15 @ 3:53 pm
Anon and others. Read the whole story. They say there is no out for 19 years.
Comment by Pawn Friday, Oct 16, 15 @ 3:54 pm
I hear a case filed be,fore the court of claims might take a decade. Let them sue
Comment by Sue Friday, Oct 16, 15 @ 3:55 pm
===The point some of y’alls are ignoring is that the sale seems to be assuming the new owner would then tear the building down. A 19 year lease makes that aspect of the sale…problematical.===
Yep. That is why the state is going to pay out the giggy to get the deal done.
Comment by Ducky LaMoore Friday, Oct 16, 15 @ 3:55 pm
from an investment and legal standpoint, wouldn’t “due diligence” apply here? at least a phone call to these guys? they’ve been looking into this deal since December 2014 and no one had these guys on their to do list? odd.
Comment by Poolguy Friday, Oct 16, 15 @ 3:59 pm
Superstars! Who cares about petty details?
We are drivin’ value for the taxpayers. This from the guy who said we could pay someone to take the building (worth $380 mil?) and still make money. Yep, lets fast track it and delete oversight.
Comment by Langhorne Friday, Oct 16, 15 @ 4:00 pm
Tone at 3:43pm, you may be absolutely right.
but not one phone call to maybe keep or dealy the investors from putting out an embarrasing headline only a couple days afte the Governor’s holds a press conference, inside the building, right next to the retail shops and food court?
Comment by Poolguy Friday, Oct 16, 15 @ 4:02 pm
==I believe the point was that nobody bothered to give these guys a heads up. And I doubt it’s as “easy” as you make it out to be.==
I mean, it depends on what “it” is. Selling it with a lease on it? Yeah, very easy. The price probably goes down, though, ’cause the new owner has to deal with this.
But yes, absolutely, not giving them a heads up was just sloppy. Doing a big thing badly.
Comment by Arsenal Friday, Oct 16, 15 @ 4:05 pm
Outrageous. Outrageous. Shouldn’t happen.
Comment by Dale Cooper Friday, Oct 16, 15 @ 4:06 pm
“We have not been contacted by the state at all.”
Commenters can go back and forth all day long about the effect on a possible sale, but making that announcement without even calling the lease-holder is nothing less than gross incompetence.
– MrJM
Comment by MrJM Friday, Oct 16, 15 @ 4:10 pm
I bet the lease has a clause that covers the possibility of ownership sale. If not, I’m shocked. Other than that, yeah, it appears Rauner is winging just about everything these days.
Comment by Cheswick Friday, Oct 16, 15 @ 4:22 pm
==== Commenters can go back and forth all day long about the effect on a possible sale, but making that announcement without even calling the lease-holder is nothing less than gross incompetence.
You know the most important thing to an economy for it to be business friendly? Property rights–like the ones assigned in a lease. If you are “business friendly” you should then at least notify the tenants of your intention before announcing it to the public. Or, if worried about links discuss it immediately after the announcement.
Rauner isn’t looking to be business friendly. He’s looking to make Illinois Rauner Friendly which is very, very different.
Comment by ArchPundit Friday, Oct 16, 15 @ 4:26 pm
“We have not been contacted by the state at all…”
*sniff* *sniff* Smells like a Superstar.
Comment by Nick Name Friday, Oct 16, 15 @ 4:27 pm
==You have a lease-holder and you never talked to the company before deciding to sell?==
That’s superstar management! Obviously, us plebians are not capable of understanding.
Comment by Precinct Captain Friday, Oct 16, 15 @ 4:35 pm
Rauner needs to hand this off to an expert on hinky RE deals.
Tony Rezko is back from camp.
Comment by walker Friday, Oct 16, 15 @ 4:43 pm
so there’s the lease with winthrop and marc but there are also the leases they in turn have with the shops. wonder how long walgreen’s lease with winthrop is…..
bruce and his superstars look more and more incompetent with each passing day
Comment by Zoe Friday, Oct 16, 15 @ 4:51 pm
Pish Posh - it will be done within the year. Because he said so.
Comment by Politix Friday, Oct 16, 15 @ 4:57 pm
To be fair, the lease holder has done renovations to the food court area and brought in some new vendors. Not sure if that counts as “substantial” but it’s better than what we had before.
Comment by DuPage Dave Friday, Oct 16, 15 @ 4:59 pm