Developer With Political Ties Gets Title to Lakeview Site

After two years of lengthy court battles, Allison Davis finally gained rights of the former Dominick’s site in Chicago’s Lakeview neighborhood. In 2009, Davis and Mayor Richard Daley’s nephew, Robert Vanecko, sought to auction off the site after a default loan by developers Michael O’Connor and Jonathan Zitzman.

Davis’ Urban Realty Partners was the lender in 2009 for a failed project to build a new Dominick’s and a residential housing complex at the site. In a deal that closed in March, a venture of DV Urban has taken title of the property through a $6.5 million loan from Chinese lender, Wanziang America Real Estate Group LLC. Initial plans suggest that the current parking lot will be redeveloped into a usable and functional space.

“DV Urban is in the process of talking with two grocers about a store there,” said Maureen Martino, executive director of the Lakeview East Chamber of Commerce. “A grocery store would be excellent news for the community, because the old Dominick’s was destroyed by a fire five years ago.”

“I cannot tell you how many people walk into our office and ask, ‘When is Dominick’s coming back?’” she said. “They really miss the grocery store.”

In addition to the grocery store, the plans propose some kind of residential complex, either apartments or condominiums.

Davis, head of Chicago-based Davis Group LLC, did not respond to questions seeking comment. The DV Urban fund provided a $7.9 million mezzanine loan for the project but gained attention in media reports for getting $68 million in investments from city pension funds.

The sale of the property ends roughly a two-year battle for the site from the preceding owners, Chicago developers Michael O’Connor and Jonathan Zitzman. In June 2009, the venture that owned the site filed for bankruptcy to prevent a foreclosure sale.

In the end, DV Urban was the highest bidder for the defaulted first mortgage. “They paid just more than $8 million, compared with the loan’s roughly $11 million balance,” said Paul Bauch of Chicago law firm Bauch & Michaels LLC, who represented the O’Connor – Zitzman venture in court.

“It’s a great development site located in a great area,” Bauch said. “It’s unfortunate that because of the economy, no one’s really doing anything.”

Photo: Jasmined