CARILLON TOWER LAWSUIT UPDATE
Lina Dou et. al.
Carillon Tower/Chicago LP, Forefront EB-5 Fund (ICT) LLC; Symmetry Property Development II LLC; and Jeffrey L. Laytin
Last Updated: December 13, 2020
88 Chinese investors gave a total of $48,400,000 to provide one layer of money to build a hotel and apartment complex called Carillon Tower on three pieces of land. To build Carillon Tower, the total cost was $150,457,500, as described to investors:
The aggregate funds to be raised for this Project are estimated to be $150,457,500 from the following sources: (i) $51,000,000 of equity from the Project Owner, (ii) $45,000,000 from the Investors in this Offering (the “Investors”) in exchange for Partnership Units, and (iii) $54,457,500 from the funding of a secured construction loan that is currently being sought on reasonably competitive market terms
The Project Owner expects to commence construction in October 2015. The construction period is expected to take 24 months and is projected to be completed in October 2017.
From the beginning, the project experienced setbacks. The City of Chicago refused to give a permit for the project to be built. The owners never raised any $54,457,500 construction loan. The owners did not contribute $51,000,000 in equity. They only money raised was the Chinese money.
Despite failing to raise the money of three pieces of land, the owners decided to expand the project by several hundred million dollars and purchase a 4th parcel of land, and to hire architects to design Carillon Tower on 4 pieces on land.
However, the owners failed to purchase the 4th piece of land, and then their architects sued them for non-payment. Then two of the three parcels of land which they owned were declared City of Chicago landmarks which could not be torn down. Next, it was discovered that the owners never held clean title to all three of the original parcels, but had used them as collateral for loans they never paid, so all three parcels of land went into foreclosure. They were then sued by their general contractor, their soil experts, and others. The Chicago properties were used to secure loans in a separate Hawaii project that was having trouble.
The owners have admitted to the court that they have no money. The $48,400,000 went in part to Cansine as the broker, and the rest of it was never clearly placed anywhere that can be found.
The owners still think that they can build this project, even though they have no funding, they do not own the properties, they are being sued by investors and creditors, and they have no approval from the City of Chicago. The property was supposed to be built in 2017 and not one shovel has broken the earth. No one knows if the Chinese money was spent, or put in some other project, or some other location, but one thing is established – it is gone.
The owners have asked for 45 days to raise enough money by leveraging other real estate not involved in the Carillon project to give full refunds to Carillon investors who want to get out. If the owners cannot raise the money to give the refunds, the Defendants will have to pay damages and then this case will return to the Court for further proceedings.
We believe that the facts speak for themselves -- the chance of this project getting built are very low because the owners are without money, without property, without City of Chicago approval, and their plan is to build in a very crowded neighborhood that already has a gigantic 77 story apartment complex building under construction just one block away.
We have worked hard on this case for years. The judge has referred the case to the United States Attorney’s Office which handles criminal cases. The purpose of striking this deal is to provide a refund to each Chinese investor that wishes to redeem their original investment at this time.
GLEN J. DUNN & ASSOCIATES, LTD.