His company, Mark IV Realty, had been in business since 1979. In 1988, it acquired a poorly maintained, 37 percent occupied 198-unit apartment complex in Vail, Colorado. Marks not only renovated the complex, but re-positioned its marketing, turning away from individual renters and toward the corporate housing market. For the next 15 years, the complex was 100 percent occupied.
In 1992, Mark IV Realty acquired an abandoned 135,000 square foot industrial property on Chicago’s near north side and turned it into the city’s first Home Depot store.
Marina City, around this time, was a “rat hole,” in the words of an attorney for Marks. R. Kymn Harp, a commercial real estate attorney now with Buchalter, said the complex was “largely vacant. In foreclosure. Languishing in bankruptcy. Burdened with nearly $10 million in unpaid and delinquent real estate taxes. Physically decaying and needing tens of millions of dollars in repairs.”
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Writing in his 2009 book Intent to Prosper, Harp (left) described condominium unit owners at the time as “understandably hostile and uncooperative, having been burned in the past by broken promises of prior owners.” |
In 1993, after two of these failed attempts by other developers to acquire Marina City’s commercial property, Marks saw his chance. The bankruptcy trustee, Ilene F. Goldstein, appointed another of his companies, Niki Development Corporation – named after Marks’s wife – property manager. A contract for Marks to buy the property, good until October 11, 1994, was approved in a federal bankruptcy court.
Marks would buy the property and pay the $700,000 electric bill and a $700,000 settlement with Cook County for property taxes that at one time exceeded $7 million.
The only holdup was a rival group that wanted to buy the property, too – a group that included Roger Levin, president of Marina City Venture, and Marina City’s architect, Bertrand Goldberg.
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Levin (left) was a real estate developer in Northbrook, a northern suburb of Chicago. In the mid-1980s, he and a partner, Paul Stepan, owned the building at 33 West Kinzie Street in which Harry Caray’s Italian Steakhouse is now located, on the same block as Marina City. |
Along with Marina Towers Condominium Association, Marina City Venture hired former United States Attorney Anton R. Valukas, a partner with the law firm Jenner & Block, to investigate allegations of fraud with the Marks contract.
| (Right) In 2009, Anton R. Valukas was appointed examiner in the bankruptcy of Lehman Brothers. He is seen here on C-SPAN testifying at a House Financial Services Committee hearing on April 20, 2010. |  |
Among other issues, they were concerned about why the tax-delinquent property did not go to auction. They asked for a hearing in U.S. District Court on the matter.
Goldstein explained to the court that bankruptcy regulations take precedence over other statutes that normally would have disposed of the property, so it was not unusual that a contract was signed with a developer instead of selling to the highest bidder at an auction. She also pointed out that Marina City Venture’s bid was rejected by the bankruptcy court before the Marks contract was approved.
Goldstein had supported the Marks group, over the Levin group, because she believed they were better capitalized.
“I also had a sense that...they had a better idea of what they were trying to do,” she said in 2011. “I felt that the party that was more likely to do something good for Marina City [and] had the financial wherewithal...was this John Marks group.”
The Marks group prevailed, and again when the decision was appealed.
“Judge [Wayne] Anderson ruled in my favor every which way including Sunday,” said Goldstein. “He issued a decision that basically confirmed what my suspicions were.”
Marks had the inside track with a solid cash offer, she said, and that as property manager he had spent thousands of dollars of his own money to keep the complex afloat.
Despite the contract with Marks to buy the property, Goldstein’s work was not over. The three million dollars they would get from him would not be enough to get liens released from the property. She worked with Resolution Trust Corporation, eliminating their claim entirely, “which was not an easy thing to do,” then got the Assessor’s Office to reduce the real estate tax bill to $750,000, then turned to Com Ed, which was by then owed more than three million dollars.
“We were able to put all these puzzle pieces in place – and unbelievably, had a small amount leftover to pay some of the pre-petition creditors.” She estimates that amount was $100,000 to $125,000.
“Everyone had to work together to seal this deal,” said Goldstein. “Everyone was really trying to get Marina City back on the road.”
$3 million now, $70 million soon
On November 11, 1994, the commercial property was sold for $3.35 million to developer John L. Marks, at one time the property manager, who announced plans for a $70 million facelift.
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“Our goal is to return Marina City to the great complex it once was, in the eyes of many people,” said Marks (left).
The Chicago Tribune said the acquisition by Marks “almost certainly dashes any hope by Bertrand Goldberg, the complex’s architect and one of the acknowledged geniuses of 20th century design, to be involved in the renovations.” |
By this time, the county had backed out of a deal to accept $700,000 as payment for past-due property taxes. The title Marks was given was free of liens, so this was a detail to be worked out between Goldstein and Marina City’s creditors.
Marks would keep the theater building, possibly convert the office building to another use, add three or four restaurants, build new entrances at State and Dearborn Streets, and refurbish the river walkway. The unused skating rink would be covered and become part of the restaurant space.
Although he respected Goldberg’s design, Marks said he did not plan to consult with him about the redevelopment.
“I have due respect for his creative genius in creating buildings like this,” Marks told the Chicago Tribune. “Our decisions on the changes to be made will in the long run basically go with the architectural genius of what he created there.”
Roger Levin broke the news to Goldberg, who was said to be “very disappointed and surprised.”
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(Left) A handwritten note from Marina City architect Bertrand Goldberg to developer Roger Levin dated November 4, 1994 (Goldberg is using a Roman numeral for the month, a style popular in Europe). “To Roger Levin, who will again bring the City within a City back to Chicago – With gratitude, Bertrand Goldberg.” |
Marks said he would begin cosmetic improvements to the lobby area in the next month or so, and that “individual unit owners and residents will be pleased” with the redevelopment.
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