The developer of a $150 million apartment and retail complex across the street from Wrigley Field has sued the owner of movie theater chain that stopped building out its space in the property when the COVID-19 pandemic hit and allegedly hasn't paid rent ever since.
Lawyers for Chicago-based Bucksbaum Retail Properties, which co-developed the massive Addison & Clark project immediately south of the Friendly Confines, say in a federal complaint filed this week that Mexican movie theater chain Cinemex owes more than $18 million after allegedly breaching terms of its 10-year lease for a 30,000-square-foot dine-in theater in the complex.
A venture that controls Cinemex's 30 U.S. locations filed for Chapter 11 bankruptcy protection in April and rejected its Wrigleyville lease agreement as it seeks to reorganize the business, according to the Nov. 17 complaint. But its parent company, Mexico-based Grupo Cinemex—which has not filed for bankruptcy protection—guaranteed the Chicago lease, meaning it remains on the hook for its monthly rent, the Bucksbaum venture alleges in the lawsuit.
The dispute is one of many between retail landlords and tenants trying to survive a crisis that has rocked the global economy. The coronavirus has been especially bad for businesses like movie theaters that rely on people gathering.
Bucksbaum attorney Alan Salpeter of law firm Arnold & Porter said the lawsuit was a last resort and that he doesn't count out the possibility of striking a new deal with Cinemex to complete and operate the movie theater after it sorts through bankruptcy protection.
"Our client would prefer a business resolution and hopes that one can come about with CMX," Salpeter said.
Cinemex built out seating and screens for what was slated to be an upscale theater in the fast-changing area around the ballpark. Addison & Clark debuted two years ago with 140 apartments, a 400-space parking garage and retail tenants including a health and fitness club, a Lucky Strike bowling alley and several restaurants.
But work on the third-floor movie theater stopped shortly after the onset of the pandemic and triggered more than two dozen liens on the property from contractors and subcontractors—as well as three foreclosure suits from contractors—totaling more than $5 million in unpaid fees and other costs, Bucksbaum alleged in the complaint. The foreclosure complaints are pending in Cook County Circuit Court, according to the lawsuit.
The $18.2 million sought in the suit includes missed rent payments and the value of future rent from the 10-year lease.
Grupo Cinemex executive Javier Ezquerro did not respond to a request for comment on the lawsuit. But a lawyer for the company denied the allegations in an Oct. 21 letter to Bucksbaum attorneys, arguing that Grupo Cinemex "does not sign the lease and is not bound by the terms indicated," including any guarantee of the lease, the letter said. Grupo Cinemex also argued that it "does not do business in Illinois" and is not subject to the state's law.
Bucksbaum's lawsuit says Grupo's guarantee is explicitly written into the lease and the lease is explicitly cited in the guarantee. Attorneys argued the guarantee can be enforced under Illinois law given Grupo Cinemex's years of doing business in the state as owners of other movie theaters in the Chicago suburbs.
Bucksbaum developed Addison & Clark through a joint venture with Itasca-based M&R Development as the owners of the Chicago Cubs were in the process of renovating the ballpark and redeveloping much of the property around it with a hotel, trendy restaurants and a public plaza along Clark Street next to the stadium.
The transformation into a mixed-use campus from a scene primarily known for dive bars was meant to turn Wrigley Field into a miniature entertainment district that still drew crowds during the off-season and when the Cubs are on the road during the summer.
That big bet didn't pay off this year, since fans weren't allowed at Cubs games during the COVID-truncated 2020 season and city officials have restricted bar and restaurant activity to try contain the spread of the virus.
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November 19, 2020 at 11:55PM
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Wrigleyville developer sues movie theater operator - Crain's Chicago Business
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