The Arboretum of South Barrington facing $67.2 million foreclosure lawsuit
The Arboretum of South Barrington is facing a foreclosure lawsuit amid widespread economic pressure on the retail and hospitality industries during the COVID-19 pandemic.
In the lawsuit filed in Cook County circuit court in September, UnionBank states that the owners of The Arboretum didn't pay interest on the property's $67.2 million mortgage and didn't pay off the debt when it matured in April, according to Crain's Chicago Business.
The 480,000-square-foot outdoor shopping center at Higgins Road and Route 59 is listed as part of the portfolio of Starwood Retail Partners, a division of Starwood Capital Group.
Starwood Retail Partners and UnionBank didn't return requests for comment Wednesday.
"Unfortunately we have no comment," said a woman who answered The Arboretum's customer service number.
South Barrington Mayor Paula McCombie said she had no firsthand knowledge of the lawsuit but was informed Wednesday morning that The Arboretum has a court-appointed receiver. That person is Mike Zucker, managing partner of Peak Properties, based in Chicago.
McCombie said she's optimistic about the shopping center's future. "I have no fears that this is going to be the end. I think this is going to prosper as soon as we get through this COVID."
Business at the mall - which the village can gauge from sales tax revenues - was more robust pre-pandemic, but has held up better than anticipated, McCombie said. Restaurants in particular seemed to do well and the village worked to facilitate things like outdoor dining, she said.
Eateries there include Mago Grill & Cantina, Cooper's Hawk Winery & Restaurant, Ruth's Chris Steak House, Wok n Fire, Pinstripes and Georgio's Chicago Pizzeria & Pub.
This isn't the first bout with foreclosure proceedings for The Arboretum. The shopping center opened in 2008, at the start of the Great Recession, and faced a $91 million foreclosure lawsuit in 2011. At that time, Mike Jaffe, president of The Jaffe Companies in Northbrook and developer of the shopping center, partnered with a Boston-based company to avoid foreclosure. Starwood bought The Arboretum in 2015.
Zucker was appointed receiver in early October, meaning he's a neutral party whose job is to maintain and preserve the property. Zucker said he hired Chicago-based Jones Lang LaSalle to manage the shopping center.
"It's a big project," he said.
Zucker declined to give specifics about the status of tenants. "We're getting rent. People are opening, people are closing," he said. "It's a revolving door."