T
he Respiratory Health Association has taken legal action against LG Group, a Chicago-based development company, over a failed deal to purchase their office building at 1440 West Washington Boulevard in Fulton Market. The deal was worth a whopping $24 million, but LG Group failed to secure the necessary zoning changes for the property, leading to a stall in the redevelopment plans.

    According to court records, LG Group had agreed to buy the property in 2022, with plans to tear down the existing office building and construct a new high-rise building. However, the sale was contingent on LG's ability to rezone the parcel from a commercial district (C2-3) to a downtown mixed-use designation (DX–7), which would allow for both residential and office construction. The purchase also required a bonus floor area ratio of 2.5.

    In case LG Group failed to secure the necessary zoning changes, the sale agreement stipulated that the developer would pay the Respiratory Health Association a sum of $500,000 in earnest money. This payment was intended to compensate the association for any losses incurred if LG Group tied up the property for a considerable period without completing the purchase.

    The Respiratory Health Association alleges that LG Group did not pursue the zoning change in good faith and canceled a community meeting scheduled for August 2023, which was meant to expedite the zoning process. The lawsuit also quotes LG Group's CEO, Brian Goldberg, blaming high interest rates and construction costs for the stalled progress.

    The agreement did not contain any contingencies regarding the purchaser's ability to find investors for the project after closing. LG Group paid half of the earnest money, which is currently being held in escrow, and still owes the association $250,000 for failing to follow through with the zoning request and sale. The agreement also states that $50,000 of the earnest money would be non-refundable after a certain date.

    When the Respiratory Health Association attempted to withdraw $50,000 from the escrow account after that date, LG Group blocked them from doing so, according to the lawsuit.

    This isn't LG Group's only proposal in the area. The company also plans to construct a 25-story town and a 38-story tower at 170 North May Street and 175 North Racine Avenue. These properties were rezoned in 2021, allowing for a total of 667 residential units in the updated project plan.