LOGAN SQUARE — A developer with big plans to overhaul the dilapidated Congress Theater has been hit with a $24 million foreclosure lawsuit.
The lawsuit, first reported by Crain’s Chicago, could spell trouble for the developer’s multi-million-dollar redevelopment project, which aims to bring the 1920s-era landmark theater back to life.
According to Crain’s, the lawsuit was filed by Los Angeles-based lender AEG Worldwide, an “entertainment and sports promoter whose holdings include the Los Angeles Lakers and the Coachella Valley Music & Arts Festival.” Moyer borrowed money from AEG to redevelop the Congress.
In the lawsuit, filed last month, AEG alleges Michael Moyer, the developer behind the redevelopment project, defaulted on $14 million in loans on the property nearly four years ago, Crain’s reported.
Over time, the loans resulted in another $10 million in fees and interest. The total amount AEG alleges Moyer owes is $23.9 million, according to Crain’s.
The lawsuit is being made public after months of inactivity at the site that has had neighbors and elected officials questioning if the project is actually moving forward.
Moyer bought the old movie palace for $16 million in 2015 with the goal of bringing it back to its former glory. At the time, then-1st Ward Ald. Joe Moreno said Moyer would “re-establish its reputation as one of the finest music venues in the nation.”
In 2018, a couple years after AEG alleges Moyer defaulted on $14 million in loans, the developer received city approval for the restoration project, which called for a total overhaul of the theater and the construction of a 30-room hotel, 14 affordable apartments and 16,000 square feet of retail space in the surrounding 160,000-square-foot theater building, as well as the construction of a 72-unit residential building next door.
Also in 2018, Moyer scored $9.7 million in Tax Increment Finance dollars toward the multi-million-dollar project, but Crain’s reports that he never actually received the money and was unable to raise the rest of the funds needed for the redevelopment project, which has been said to cost up to $96 million.
Attempts to reach Moyer Tuesday were unsuccessful.
This is not the first time the Congress has been wrapped up in a foreclosure lawsuit. Former owner Erineo “Eddie” Carranza was threatened with foreclosure in 2012 after defaulting on a $4 million loan.
In 2013, the Congress was shut down by the city after getting slapped with a string of code violations.
The closure came after a series of crimes that occurred in and around the theater during shows, including the rape of a 14-year-old girl. As a result, the theater’s former music genre of choice, electronic dance music, or EDM, was banned for all current and future owners.
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