Developers of condo project sue alderman

(Crain’s) — The developers of a South Loop condominium project have gone to court to block a zoning change by Alderman Robert Fioretti that would shrink the 490-unit development, which some neighbors have criticized as too large.

Affiliates of Kargil Development LLC have sued the 2nd Ward alderman, arguing that his proposal to change the zoning for the property at 1712 S. Prairie Ave. is illegal and comes too late. Though the City Council last year approved a project with two towers — one about 450 feet tall and the other 310 feet — the change would cut their height to a maximum of 225 feet, forcing Kargil to remove about 100 condos from the development, called the X/O Condominiums.

“I believe this a clear abuse of aldermanic power,” says Kargil Principal Keith Giles. If the measure stands, “it would be a horrible precedent.”

Mr. Fioretti’s office said it would issue a statement on the lawsuit later Friday.

The alderman, whose ward includes the project, introduced the zoning change in July, but on Thursday he asked the City Council’s Committee on Zoning to postpone consideration of the proposal, a sign that he knows he doesn’t have the votes to pass the measure, Mr. Giles says. Contending that the delay has fueled uncertainty about the project, Kargil wants a judge to stop the alderman from delaying the vote.

Related story: Proposed zoning change threatens South Loop project

The lawsuit, which was filed Thursday in Cook County Circuit Court, also goes a step further and asks a judge to rule that the proposed zoning change is illegal. Courts have generally ruled for developers in similar cases if the developers can establish that that they spent a significant amount of money on a project before the city passed more restrictive zoning.

Mr. Giles argues that he has a strong case, noting that Kargil has already spent more than $28 million on the development, a figure that includes bank debt, marketing costs and land acquisition costs.

Yet amid the uncertainty, sales at the development have been stuck at about 200 units since July.

“His filing of this ordinance has caused us harm in the marketplace,” Mr. Giles says. “People don’t understand the situation and have been reluctant to buy from us. Our competitors are using this against us.”

Two neighborhood groups support the XO project, which was designed by renowned Chicago architect Lucien Lagrange. But a third group formed to oppose the project, contending that its two glass towers don’t fit with the neighborhood. The development would sit across the street from the landmark Glessner House in the Prairie Avenue Historic District.