Motor Row developer slapped with suit over unpaid fees
Posted 12/28/2007 by Patrick Rollens
Rokas International Inc., developer of the under-construction Motor Row Condominiums, 2300 S. Michigan Ave., is the target of a suit filed by a financing consultant over unpaid bills, according to an article in Crain's.
Sedgwick Properties Development Corp., a condo developer that also does consulting work, filed a lawsuit last week in Cook County Circuit Court alleging breach of contract against [Andrius] Augunas, his company Rokas International Inc., and the firm that provided Motor Row’s construction loan, Pasadena, Calif.-based IndyMac Bank.
The lawsuit is certainly unwelcome news, but the article goes on to describe a troubling discrepancy in the number of units sold.
In April, the project had 42 units under contract, according to a report by Appraisal Research Counselors. That is eight more than IndyMac required to issue the construction loan.
But in October, the number of sales had dropped to just 20, according to Appraisal Research figures, which developers and brokers provide voluntarily.
We've written extensively about the full-throttle development going on in Motor Row, but it remains to be seen how the ongoing developments there will weather the softening market.
Comments
12/28/07
wulf ward said:
My company, Men @ Work Inc. has supplied sandblasting services for Motor Row Development. It was a contract of over $ 200,000.00. I have completed this contract last Spring. I am still owed a large balance on that total. All my dealings with the developer were negative "shell-games" and self-serving dialog. I am sure I am no isolated case in not getting paid. I will file a mechanics lien within the next 2 weeks.
12/29/07
Dmac said:
Yikes - isn't this development considered an "anchor" project for that area?
Jeff said:
Not really. There are a few other developments further along in legitimate sales and construction progress, in addition to a planned hotel on Indiana, and some retail space/ restaraunt conversions. However, projects like this continue to raise questions on developer liscensing & qualification, financial stability, etc.
Additionally, it highlights the issue of the accuracy of sales numbers that developers report. For example, how many of these sales claimed before construction loans were investors or developer held units that were paid out when the construction loan was received? Reportedly, this is more widespread in the South Loop than just this project. Games, Games, Games…
2/15/08
Tony Zambani said:
The Motor Row development went belly up 2 weeks ago!! He let all his employees go and now those with contracts are trying to get money back from escrow - hopefully he didn't dip into that to cover costs.
It'll be interesting, as he never contacted anyone who had a contract about this and has halted all communication with buyers.
7/24/08
CJW said:
Andrius Augunas somehow closed the escrow account and stole all the deposit money including my $20k. Fortunately, the banks and builder are still going to finish the building, but what this means to me remains to be seen.
Andrius Augunas is a crook. I hope he makes a lot of new friends in prison.