analyzing, stabilizing and repositioning distressed assets jessica schrammdan shapiro thompson...
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ANALYZING, STABILIZING AND REPOSITIONING DISTRESSED ASSETS
Jessica Schramm Dan Shapiro Thompson Coburn, LLP Robbins, Salomon & Patt, Ltd.
I. Defining the Terms
A.Distressed Assets Deal Crashed Financially Developer or Mastermind Crashed Death by Market
B.Stabilization and Repositioning1) Clean up the Unfinished Aspects of the Project2) Negotiate New Entitlements3) Made Ready for “Market” or Development
II. Analyzing a Busted Deal: From the High Profile
Chicago’s: Waterview Tower/ Shangri-La Hotel or The Spire
Located at 330 North Lake Shore Drive, a proposed 115-story residential tower providing 1,193 units. Stalled in 2008.
Located at 111 West Wacker, a proposed 90-story tower for a 220 room luxury hotel with a 26-story parking structure. Stalled in 2008.
II. Analyzing a Busted Deal: To the More Common
A Townhome Deal: On the Surface it’s a Beauty
II. Analyzing a Busted Deal [Continued]
A Townhome Deal: Underneath it’s a Beast
II. Analyzing a Busted Deal [Continued]
A. Assess the Current Property Conditions
A. Assess the Current Property Conditions [Continued]
A. Assess the Current Property Conditions [Continued]
A. Assess the Current Property Conditions [Continued]
B. Assess the Existing Development Rights
B. Assess the Existing Development Rights [Continued]
2. Identify Municipal Entitlements i. Types of Documents, other than
those recorded, may include Entitlement Ordinances and Resolutions and Permits and Licensesii. What is valid and what has expired? Most should
include sunset provisions.iii. What rights and obligations are
contained therein?iv. Will such rights transfer? Special Uses rarelytransfer without formal approval.
B. Assess the Existing Development Rights [Continued]
3. Identify all Current Building Permits and Licensesi. What permits or licenses are valid
and what has expired?ii. In the case of permits, who has authorization to use the prior plans?iii. In the case of licensing, what licenses will transfer? Most licenses, including those which are use permits, will likely not transfer.
C. Identify the Highest and Best Use for the Parcel
1. Engage a Planner to Study the Area and Assess the Highest and Best Use2. Consider the Comprehensive Plan 3. Consider Current Market Conditions and Trends4. Consider Key Targets for Infill Development
D. Reposition through New Entitlements
1. Consider any Necessary or Desirable Amendments to the Original Entitlements 2. Create Incentives through Attractive Zoning 3. Utilize Financial Incentives, including the creation of tax credits, funds and grants4. Utilize Public-Private Partnership Agreements 5. Create Value through Stabilization and Repositioning
V. Question and Answer
For Additional InformationContact:
Dan Shapiro 312/ [email protected]
Jessica Schramm312/ [email protected]