Sale, redevelopment of former Mount Prospect police and fire HQ inching closer
Mount Prospect is expected to close on the $2 million sale of its former downtown police and fire headquarters this month, setting the stage for an important downtown mixed-use development.
However, progress has stalled on the redevelopment of the nearby Chase Bank building, which is embroiled in a federal lawsuit its current owner filed this summer against the former owner.
Village Manager Michael Cassady said the closing on the sale is more complicated than a typical closing, because the buyer is simultaneously securing a construction loan to tear down the former police and fire headquarters and put up a six-story building.
Proceeds from the sale will be deposited in the Prospect and Main Tax Increment Financing district fund, with the goal of advancing other projects downtown, Cassady said.
Buyer MP2 Holdings LLC's plans call for 88 rental units in the six-story building at 112 E. Northwest Hwy., including six townhouses with garages and nine studio, 62 one-bedroom and 11 two-bedroom apartments. The plan also includes 3,500 square feet of retail/restaurant space.
Cassady expects the project complete in about two years.
Meanwhile, redevelopment of the Chase building at 111 E. Busse Ave. is languishing.
The lawsuit was filed July 6 in federal court in Chicago by Riverwoods resident Jawad Rabi and ZRM Enterprises against former owner Gus Dahleh, Dahleh's wife, Kyndra Mayo, CDM Investors LLC and NPI Debt Fund II LP.
The suit alleges Rabi purchased a 100% interest in the property and became manager of ZRM Enterprises, which bought the site in 2018 when it was under foreclosure.
Several months later, the suit claims, a friend introduced Rabi to Dahleh as someone who could help find potential buyers and assist with issues related to the removal of cell towers that had hampered previous redevelopment efforts.
Rabi's suit alleges that after he spent $2.7 million last year to pay off the mortgage, Dahleh and Mayo created fictitious documentation changing the manager of ZRM from Rabi to themselves.
They then "made false recordings on the records of the property with Cook County, forging Rabi's signature to a document stating that CDM (a company owned by Mayo) was a manager of ZRM," the suit alleges. "They then worked with a business associate in the mortgage lending field in California, using the false recording to obtain a mortgage and walk away with $5,369,000.00."
Cassady said the village recently learned of the litigation and the village attorney has had conversations with Rabi's lawyer.
"Our biggest concern is that that's going to cloud the title," he added. "We would like to see that property redeveloped."
Rabi was unavailable for comment.
Dahleh called the lawsuit "frivolous."