A North Riverside strip mall which opened five years ago on a sliver of former forest preserve land at the northeast corner of First Avenue and Cermak Road is in foreclosure, according to documents filed in Cook County Circuit Court.
Wheatland Bank filed the foreclosure complaint on April 2, claiming that Crossroads of North Riverside Development LLC and James P. Gierczyk have defaulted on a $1.6 million mortgage.
Wheatland Bank was itself seized by the FDIC on Friday. Assets of the Naperville-based bank were transferred to Wheaton Bank.
On Dec. 7, 2007, the bank provided the loan, which does not mature until Dec. 7, 2012. The loan was modified in March 2009, but a year later Crossroads of North Riverside owes the bank $1.58 million, which includes the principal, interest, fees and late charges, according to the lawsuit.
Gierczyk, who did not return a phone call seeking comment, has two other foreclosure suits pending against him. Crain’s Chicago Business reported last week that in addition to the North Riverside property, Wheatland Bank has filed foreclosure complaints against shopping centers Gierczyk has developed in Tinley Park and Stone Park.
Gierczyk Development is based in Homewood and has nearly 40 years of experience in retail and commercial property development.
The developer acquired the property in 2002 from the village of North Riverside for $500,000. The village in 1999 had acquired the isolated triangular parcel from the Cook County Forest Preserve District specifically for commercial development. The village paid $500,000 for the property.
Gierczyk took out a $12.8 million construction loan in 2005, according to records obtained from the Cook County Recorder of Deeds. The company was released from that mortgage agreement in 2008.
The 2007 loan to Crossroads of North Riverside appears to be related to Gierczyk’s shopping center development in Stone Park. According to the complaint, Wheatland Bank loaned the developer $1.6 million.
“And to memorialize the Stone Park Corner Loan Agreement, Crossroads of North Riverside made, executed and delivered to Wheatland a mortgage note in the original principal amount” of $1.6 million, the lawsuit states.
The North Riverside strip mall opened in 2005 and has six tenants, including Standard Bank, Dunkin Donuts/Baskin Robbins, Subway, Tamale Hut Café, Sprint and New Nails.
But the shopping center is probably most notable for its two-story-tall, high-tech digital billboard, which towers over the corner of First and Cermak. The village was initially supposed to get 50 percent of the profits from the signs, according to village officials.
However, such a deal was never put in writing and the sign never became the money-maker officials thought it would.
Bank claims garage property
Further east in North Riverside, a partially completed strip mall property at Cermak Road and Desplaines Avenue is now owned by First Chicago Bank and Trust.
According to Cook County Recorder of Deeds records ownership of the property transferred to the bank on March 8. The property had been the subject of a lawsuit filed by the bank against its former owner, Mary Ellen Scatchell, in July 2009.
Scatchell bought the old North Riverside Garage property in March 2005 for $715,000 and planned on transforming it into a strip mall anchored by a bank. Work, which included the removal of contaminated soil, demolition of a portion of the old garage and a retrofit of the remaining structure, started in the summer of 2005.
In 2007, Scatchell won approval for the bank and expressed excitement that the project was moving forward. But for the past two years, nothing has happened at the site, which is fenced off and blighted. On the east side, the building is open to the elements and only partially secured by a fence.
The sidewalk on Cermak Road is closed, because several squares are missing, a situation Village Administrator Guy Belmonte said he hopes to remedy.
“I’ve talked to [Public Works Director] Tim Kutt about fixing the sidewalk so we can open it up,” Belmonte said.
Belmonte said the village will also seek to enforce building codes and blight ordinances.