Cosmetics Store Not Afraid to Open in Controversial Block 37

March 8, 2010
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Popular cosmetics store Sephora is the first retailer to open in the troubled Block 37 project on State Street in downtown Chicago, Ill., since the five-floor mall between Washington and Randolph went into receivership. CB Richard Ellis was named the court-ordered receiver for the 280,000-square-foot center that currently has only 16 tenants open on three of the five floors.

Block 37, considered to be one of the most controversial plots of land in an area where many proposed projects have failed, is the subject of a struggle between CBRE and developer Joseph Freed & Associates, which has been trying to stay in control of the project since Bank of America filed suit in October to foreclose on its $128 million construction loan. Freed and CBRE disagree about the date on which CBRE started work as the receiver and how much it should be paid. Freed is waiting for a ruling from the state appellate court on the receivership assignment decision. In the meantime, the company is also working with potential investors to buy back the construction loan.