Less than a month after a $45.6 million foreclosure lawsuit was filed against the owner of River Oaks West shopping center in Calumet City, a Cook County judge has appointed a receiver to manage the struggling property.
Frontline Real Estate Partners was chosen to manage day-to-day operations of the shopping center at 410 to 500 River Oaks West Road as of Sept. 3, the same company currently overseeing operations of the dilapidated Autumn Ridge apartment complex in south suburban Park Forest.
The shopping center, with stores such as 5 Below, Burlington, Ross Dress for Less and Marshall’s, is on the southwest corner of Torrence Avenue and 159th Street, across the street from the indoor River Oaks Center mall.
The Real Deal first reported on the foreclosure lawsuit brought by Miami-based Rialto Capital, which claims the River Oaks West property owner defaulted on its quarterly $500,000 mortgage payments beginning on Dec. 31. WC MRP Calumet Center, LLC purchased the shopping center for $7.7 million in 2014 and took out a $38.3 million mortgage loan in 2015, according to the lawsuit.
Rialto Capital asked that Associate Judge Edward Robles order the property’s foreclosure, alleging WC MRP Calumet Center has an outstanding loan balance of nearly $30 million along with more than $15 million in accrued and deferred interest along with late fees and other charges. The lawsuit says the LLC is responsible for other property foreclosures earlier this year in Missouri and Oklahoma.
Dominick Lanzito, representing Calumet City from Lisle-based firm Ottosen DiNolfo Hasenbalg and Castaldo, said he had not reviewed case filings as of Wednesday but would determine whether “any of the city’s rights or interests are impaired or affected by this.”
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Under a receiver, little should change for shopping center tenants, Lanzito said. Neither WC MRP nor Frontline Real Estate Partners responded to requests for comment Wednesday.
“A receiver is just going to come in and preserve the status quo and make sure any rent collected is properly apportioned to taxes, maintenance and any outstanding debt,” he said.
But if the property is ultimately sold to fulfill the property owner’s debt obligations, Lanzito expects a longer process as WC MRP searches for a buyer in an area with disproportionately high property taxes.
“Given the size of the property and, you know, retail space, it’s not something that’s sold as easily as single-family residences and whatnot,” he said. “It takes a very unique buyer, which can extend the duration of the proceedings.”
Current storefronts within the Calumet City shopping center include Burlington, Ross Dress for Less, Foot Locker and Marshalls. Torrence Avenue separates River Oaks West from the 11-acre River Oaks Center, which Calumet City has for years hoped to purchase from Namdar Realty Group and redevelop into an entertainment, retail and housing mecca.
“They’re not investing in the mall — they’re not going to invest in River Oaks (Center) mall,” Calumet City Mayor Thaddeus Jones previously told the Daily Southtown. “They’ve made that clear, and they’re just holding on to River Oaks mall for what they’re getting out of it right now. And that’s not right to the community, it’s not right to the school districts and it’s not right to the region.”