Chicago Area Local News

CHICAGO (CBS) ― In the midst of a foreclosure lawsuit by Bank of America and other lenders, the developer of Chicago's long-vacant Block 37 project announced 13 new leases for the retail and entertainment complex scheduled to open later this month. Two of the leases were pending bank approval.

"The momentum of this block of leases is a testament to the excitement from retailers to get this development launched after 20 years of seeing the property vacant on State Street", said Larry Freed, President, Joseph Freed and Associates LLC, the developer of the Block 37 project.

Located at 108 N. State St., the retail complex was on schedule to open later this month, despite a foreclosure lawsuit filed by Freed's lenders last month, officials said.

Block 37's lenders sued the developer last month, claiming Freed has been in default since March 2008 and that Freed owes $128.5 million on a $205 million loan. The lenders also claimed that the project has exceeded planned costs by $34 million.

They've asked a Cook County Circuit Court Judge to appoint a new developer.

But Freed said in a news release that the lawsuit is without merit and threatens to shutter the project entirely.

Mayor Richard M. Daley has met with the developers and the lenders in an effort to negotiate an agreement that would allow the project to be completed.

The first parts of the retail-entertainment complex set to open this month are the pedway between Dearborn and State Streets and street-level clothiers Zara and Anthropologie, shoe stores PUMA and Steve Madden, and crystal retailer Swarovski.

Freed said in a news release that officials expected to have the retail-entertainment complex fully occupied next year.

The new tenants announced Tuesday include Sephora, L'Occitane en Provence, Michelle Tan, Claudia Kleiner Malabar Collection, GNC Live Well, Simply Thalia, Local Charm, Spirit of the City, Accent Chicago, iCandylicious, the Comic Vault, Bleeding Heart Bakery and Alternative Shoes.

Larry Freed said the company remains committed to opening Block 37 before Thanksgiving and to complete the retail-entertainment complex by the end of next year, "assuming the bank cooperates on the necessary funding."

The new tenants include several local retailers.

Chicago-based women's fashion designer Michelle tan will open a 650-square-foot store on the second floor of the building. The shop will offer dress and casual wear, handbags and other accessories from Tan's collection as well as other local designers and Hong Kong label Ming.

The Claudia Kleiner Malabar Collection store will be a 750-square-foot boutique offering Chicago and European designers, including clothes and jewelry designed by Kleiner.

Simply Thalia, a local restaurateur, will open a restaurant on the Pedway, featuring Pan-Asian sushi, wraps and rolls, French Asian sandwiches and curry dishes.

The Comic Vault will open a 300-square-foot comic book store on the third floor of the site. The Comic Vault already has a shop in Chicago's Ravenswood neighborhood.

Roscoe village-based Bleeding Heart Bakery will open a 450-square-foot bakery on the third floor. The punk-rock themed bakery offers artistic pastries made with organic ingredients.

Chicago-based Alternatives Shoes will open a 1,500-square-foot store on the ground floor, featuring European-style men's and women's shoes, boots and sandals.

"We are proud to announce the arrival of 'hometown talent' to the project with the addition of Chicago designers and entrepreneurs among the tenants we are announcing today," Larry Freed said. "This is an opportunity for them to showcase their products to the same audiences who will be enjoying the exciting, unique, and international brands that we are also bringing to Block 37."

National sports nutrition chain GNC Live Well will open a 1,300-square-foot store in the Pedway.

Louisiana-based Local Charm jewelry studios will occupy 1,000 square feet of space on the first floor of Block 37 and will feature jewelry from more than 50 local, national and international designers. Local Charm has stores in Boston, Las Vegas, Minneapolis and Denver.

Spirit of the City will open a 3,200-square-foot Chicago-themed gift shop on the third floor of Block 37, across from the already-planned Lettuce Entertain You restaurant. Accent Chicago will open a 1,900-square-foot sports apparel store on the same floor.

iCandylicious will be a 1,600-square-foot candy store located on the Pedway.

France-based L'Occitane en Provence, will open a 750-square-foot store on the first floor of Block 37. The shop will sell a variety of bath, body, and skin care products for both men and women. The store would be their third in Chicago; the company has shops in 70 countries, with nearly 170 stores in the United States.

Sephora will open a 6,000-square-foot store on the first floor of the project with additional access on State Street. Sephora is a beauty-retail chain founded in France in 1969, and was bought by Paris-based LVMH Moet Hennessy Louis Vuitton, the world's leading luxury products group in 1997. It would be Sephora's first store in the Loop. Sephora has a store at 525 N. Michigan Av. and at Water Tower Place, as well as several suburban locations.

Previously announced tenants include the Muvico theater chain; clothier Zara; menswear retailer Bigsby & Kruthers; Tahini, which serves Mediterranean-style sandwiches; frozen yogurt store Starfruit Cafe; Sunglass Hut; and Swarovski, which sells lead crystal.cirque-style dinner theater Teatro ZinZanni.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

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