Congress Theater defaults on $4 million loan

Bank moves to foreclose on embattled owner Eddie Carranza

November 29, 2012

UPDATED 11:30 a.m. with comment from Eddie Carranza
 
Even as controversial venue owner Erineo “Eddie” Carranza is trying to evict the current operators of the Portage Theater for back payment of $103,000 in rent — and on the same day he filed a $260,000 lawsuit against former development partner Phil Tadros for breach of contract — the bank that holds his mortgage filed a lawsuit in U.S. District Court stating that he has defaulted on a $4 million loan and is moving to foreclose on the embattled Congress Theater.
 
Filed yesterday by the Chicago firm of Adelman & Gettleman on behalf of Delaware-based PNC Bank, the lawsuit claims that Carranza has defaulted on repayment of $4 million he borrowed in August 2007 and secured with a mortgage on the historic Congress Theater. The bank has been seeking repayment of the loan since August 2011.

In addition to payment of its legal fees, PNC Bank is seeking “an order for the appointment of a receiver, a judgment of foreclosure on the mortgage and sale of the subject property for payment of its lien and costs… and such other and further relief as the court deems just.”

Also named in the 58-page lawsuit is the City of Chicago, though it is not clear why. (Legal experts say the city may have a lien on the property and PNC is seeking to terminate the lien.)

“It’s an insurance placement issue, it has nothing to do with non-payment on the loan,” Carranza’s attorney Thomas Raines said in an email when asked about the foreclosure lawsuit this morning. “It will be straightened out in a week.”

Three letters that PNC’s attorneys sent to Carranza between August 2011 and September 2012 about defaulting on the loan make no mention of insurance. The letters are attached as an exhibit in the lawsuit.

“I don’t have authorization to comment at this time,” said Attorney Brad Berish, who filed the suit for Adelman & Gettleman on behalf of PNC. “If that changes, I will get back to you.”

Carranza has been fighting the city in a battle on two fronts over issues at the Logan Square theater. At the same time, he recently closed on purchase of the Portage Theater at Six Corners for a price close to $3 million.


The next Deleterious Impact/Public Nuisance hearing on complaints against the Congress ranging from noise to the number of police calls to unsafe conditions for concertgoers is scheduled for May 7.

The next hearing for complaints before the Liquor Commission is set for Jan. 15.

The commission has not responded to a Freedom of Information Act request for the specifics of the complaints against the venue in those proceedings.

UPDATED 11:30 a.m.

Carranza has posted the following to the EveryBlock discussion about the Portage Theater:

Jim,

Here you go again trying to start false rumors, Like the one yesterday about me buying Logan Theater and me not having meetings at Portage Park with Graham Elliot. I tried hard to bring in Elliot's his brand to Portage Park, for now it's not his market. I'm aiming high because I do believe 6 corners can be great again like the good old days full of life. The entrepreneur restaurateur operators I'm targeting are the best in the business. Please show support and I will continue working hard for the community to rebuild 6 corners together.

Jim, now you start rumors about me being foreclosed on Congress?
Farthest thing from the truth. I have a perfect monthly payment history
with PNC bank. You can call and find out for yourself.

The issue I have with PNC is over an insurance policy issue, which will be taken
care of in the next week. I will post the insurance issue resolved on this post next week.

I've have offers from music corporations offering me 5 times more
then I owe, why would I lose it to a foreclosure. You sound desperate.

Again, it's an insurance placement issue, it has nothing to do with non-payment on the loan (although I'm sure you wish it did!). It will be straightened out in a week.

Just a thought Jim, if you directed some of the energy and diligence you expend digging into my every move and happenings on something worthwhile, you could become a productive member of society.

-- Eddie Carranza

Earlier reports about Carranza, the Congress and the Portage:

Nov. 28: The Portage Theater uses Graham Elliot’s name in vain

Nov. 2: Congress Theater’s new security chief: An ex-cop with a troubled past

Oct. 31: Congress Theater police calls rank with Soldier Field, United Center

Sept. 23: How did things turn so bad so fast at the Portage Theater?

Sept. 22: New Owner of the Portage Theater moves to evict current operators

Sept. 16: Congress Theater splits with development partner

Sept. 11: The Portage Theater: What’s Eddie up to?

July 26: Congress Theater partners up… and looks to expand

April 14: More trouble at the Congress Theater

March 28: Critical of Congress security, headliner brings his own

March 25: Congress Theater responds to complaints

March 22: City to Congress Theater: Clean up your act!

 

Congress Foreclosure Lawsuit