JM Schapiro thinks he was lied to about the health of five Chicago suburban malls his company bought $94 million in august.
An affiliate of Schapiro’s Baltimore-based company, Continental Realty Corporation, sued the DiMucci Companies, the seller of the Palatine, Naperville, Mount Prospect and Cicero retail property transactions.
The lawsuit, filed in Cook County court late last month, alleges that DiMucci misrepresented the performance of the properties by covering up the fact that it accepted a lease termination payment from one tenant and got keys back from another tenant.
Continental further asserts that DiMucci, which also has offices in Palatine, Florida, and Port Orange, assured it that the leases for those properties do not have any obligation from the landlord to make unpaid tenant improvement payments or other concessions to commercial tenants.
That’s not the case, Continental claims, because tenants are asking it to complete projects to improve the HVAC system and pay for other expenses they believe are the landlord’s responsibility.
The most expensive of the Continental allegations involved the Naperville property’s now-shuttered Juicy-O restaurant, the 241,000-square-foot Fox River Commons on West Ogden Avenue and Illinois Route 59. Continental asked the court to order DiMucci to pay $1.9 million, alleging that the seller assigned the lease to the buyer in August even though Juicy-O had handed over the keys to its space in the mall last summer.
DiMucci did not respond to a request for comment, nor did Continental or its lawyers.
Continental is seeking a total of $3.3 million in damages, plus court costs and attorneys’ fees, for allegedly violating its sale and purchase agreement with DiMucci. The alleged breaches relate to four leases across the portfolio, others include a deal with Amish Furniture on Naperville properties, and a lease with a Health Mart store in Mount Prospect.
The portfolio totals more than 900,000 square feet, 84 percent of which is leased, with about 39 percent leased to grocery or drug stores at the time Continental announced the deal. The buyer said it plans to target restaurant, entertainment and medical tenants to fill 150,000 square feet of vacancy at the properties.
The largest property that DiMucci has sold is Cicero Marketplace, a 392,000-square-foot property at 3027 South Cicero Drive in Cicero Village that includes Home Depot, Sam’s Club, Target and Food 4 Less.
The others are the 101,000-square-foot Northwest Mall at 425-659 Palatine East Dundee Road, the 145,000-square-foot Golf Plaza II at 1000 South Elmhurst Road in Mount Prospect, and the 241,000-square-foot Fox River in Mount Prospect The Commons is located on West Ogden Avenue and Illinois Route 59 in Naperville, as well as the 24,000-square-foot English Valley Mall at 237 West Dundee Road in the Palatine.
