1992. Two deals to sell the commercial property had fallen through. As the commercial portion of Marina City languished in bankruptcy court, it was losing so much money – reportedly $50,000 every month – that proper maintenance was becoming a luxury it could no longer afford.

Writing in the Chicago Tribune on September 27, J. Linn Allen described Marina City as “a seedy, crumbling wreck, overwhelmed by so many problems that any near-term solution appears unlikely.”

As if things could get any worse, Resolution Trust Corporation, the federal agency that had been in charge of the commercial property for more than two years, abruptly abandoned any responsibility for it. RTC had won a foreclosure judgment 18 months earlier – and had even announced a sheriff’s sale – but gave up its right to the property – and more than $23 million in liens – because it said it would be too expensive to prepare the property for resale.

“The way things are going,” said Cook County Circuit Court Judge Lester Foreman (1928-2003), “Marina City will fall into the river.”

Lester was the latest judge to oversee the tangled, five-year foreclosure action on the commercial property. At the request of the RTC, the case was moved from federal bankruptcy court to Circuit Court in 1990.

And Lester didn’t even hear about the decision from the RTC – he heard about it from a reporter. “That’s just a commentary on the way this has been handled,” he said. “It makes this so ridiculous it’s almost laughable.”

(Above) Parties who had an interest in the commercial property of Marina City from 1983 to 1991. In 1987, four years after buying the property from Charles Swibel’s Marina Management Corporation, Marina City Associates filed for bankruptcy after defaulting on its mortgage from Continental Savings Associates, which itself went insolvent. During the savings and loan crisis of the 1980s, the Federal Savings and Loan Insurance Corporation, which insured Continental, became insolvent. It was abolished in 1989 and replaced by the Federal Deposit Insurance Corporation. In 1990, the property ended up with Resolution Trust Corporation, the federal government’s thrift bailout agency, but they didn’t want the property. They said it would cost more to pay taxes and make repairs than they could earn by selling it to a developer. RTC abandoned its claim on the last day of 1991.

James Flanagan was the court-appointed receiver who managed Marina City. He said much of the deterioration was superficial, but some was structural and potentially hazardous.

Steel beams supporting the steel mesh vehicle ramps needed to be replaced. The riverside walkway had been closed for more than a year because steel and concrete stairs leading to it were rotted and coming loose.

Flanagan said the property manager at Marina City could not even buy light bulbs or cleaning supplies without adding to the massive debt owed to increasingly restless creditors.

Commonwealth Edison was talking about disconnecting electrical service. The property manager said it was a strong possibility.

To get to their condo units, residents had to pass through a maze of scaffolds and barriers, then cross a dimly-lit, musty concourse on the lower level, lined with blank storefronts.

“It’s very distressing and disturbing,” said Richard Flader (1935-2007), president of Marina Towers Condominium Association, who had been a resident since 1965.

Flader said that due to the dilapidation of the commercial property, the residential property had not increased in value in recent years. Prices ranged from about $44,000 for a modest studio apartment to $169,000 for a nicer two-bedroom unit.

In addition to maintenance that was desperately needed, there was still the small matter of a large unpaid property tax bill, said to be in the millions of dollars.

And the abandoned theater and nearly-vacant office building were contaminated with asbestos.

A 1990 appraisal of the commercial property put its value at about $20 million, but experts said it was closer to $12 million. Paying the back taxes and cleaning up the asbestos alone would cost $10-12 million.

The decision by RTC to walk away from Marina City came as a surprise to the bankruptcy trustee, Ilene F. Goldstein (currently a bankruptcy lawyer in Northbrook, Illinois), who still formally held title to the property. But the RTC said it was a business decision. Selling Marina City would simply cost more than it was worth.

RTC spokesperson Felisa Neuringer told the Chicago Tribune she understood Marina City was an important structure to Chicago, but the RTC had an obligation to all U.S. taxpayers. “If we wanted to use tax dollars to clean up a property in Des Moines, would Chicago taxpayers want that?”

There was one thing on which everyone seemed to agree. The only salvation for Marina City would be for it to be sold to a developer who could pump a lot of money into it.

Residents help down-on-its-luck neighbor

If there was anyone remotely optimistic about the situation, it was the condominium owners. Marina Towers Condominium Association had spent $1.7 million over the past three years repairing concrete and repainting balconies and vertical surfaces. They were planning to spend $50,000 on the lobby and to replant foliage around the building the next spring, even though technically these were responsibilities of the commercial property.

“Our position is this is a building of sufficient magnitude that something has to happen,” MTCA president Flader said.

Judge Foreman was not so confident. He called a meeting in his courtroom for October 8 of all interested parties to discuss Marina City’s future.

Said Foreman, “This has gotten so out of control that it’s a financial nightmare.”

In a September 29 editorial about Marina City, the Chicago Tribune used the word “blight.”

By October, the animosity toward Resolution Trust Corporation had not subsided much. Visibly upset, Judge Foreman told an attorney for the RTC, “I’m totally disgusted and ashamed that an agency of the U.S. government would treat this building like this.”

The attorney for the parking garage, Manuel Robbins, told Judge Foreman the city has pending action in Building Court against the commercial property because of the state of disrepair. “This is a very serious problem. We’re pleading for somebody to be able to deal with it.”

Manuel Robbins (1917-2005)

An attorney for the RTC said they would “never put up a penny” for repairs at the complex.

State Representative Ellis Levin (D-Chicago), who appeared at the hearing for Marina Towers Condominium Association, said after the meeting that the RTC’s attempt to abandon responsibility for the complex was “the most arrogant and outrageous maneuver I’ve ever seen.”

Levin announced he had filed a motion seeking an order to force the RTC to advance money to the court-appointed receiver to make emergency repairs to the ramps into the complex from Dearborn and State Streets. He said a concrete column supporting a main beam under one of the ramps was so seriously cracked that reinforcing bars were exposed, and that supporting steel beams were so corroded that some had holes in them. (Left) Former state Representative and MTCA attorney Ellis Levin

A wheelchair-bound resident was reluctant to use his motorized chair on the ramps, Levin claimed, because of fear they might collapse. That would be a drop of 20-30 feet to railroad tracks below.

Because of this, Levin said the condition of the ramps hampered handicapped access, and so the failure of the RTC to pay for repairs constituted a violation of the Americans with Disabilities Act.

“This is the federal government at its worst,” he said. “Legally and morally, the RTC can’t walk away.”

Levin said the condominium association might even try to acquire the parking ramps and retail concourse below the towers. “It’s a unique situation when you don’t control your own front door.”

(Above) Entrance ramp from State Street in 2007. A wheelchair ramp was constructed near the green awning of Smith & Wollensky restaurant, visible further down the sidewalk at left. (Below) Marina level under State Street. The area at right where sunlight is visible is the metal grating you see in the image above.

At the informal court meeting on October 8, attended by about 80 condo owners and attorneys for a long list of involved parties, still more potential problems surfaced. Responding to the motion by the condo association attorney, the RTC wanted to move the case back to federal court, which would not have nurtured any quick action to pump funds into the property.

Condo owners had no fondness for the RTC. Asked Denise Dalka, “Why is it going to federal court? The RTC has done such a miserable, stinking job so far. Here we can take care of it, not in some federal court where they don’t know what they’re doing anyway.”

There were questions about whether the commercial property was still covered by liability insurance. The president of the MTCA said the insurance agent for the condo association had told him no proof of insurance for the commercial property had been received for more than a year.

Before RTC attorney Eric Macey informed the judge of his motion to move the case, several people had declared intentions to try to sell the commercial property to a buyer who would be willing to put money into fixing it up.

James Flanagan, the court-appointed receiver for the commercial property, said he believed he could find a buyer, even though bills for back taxes and possible asbestos cleanup could come to $10 million.

“I could take it to market immediately as it is,” Flanagan said. “I believe there are buyers out there if we can deliver title in an all-cash deal.”

The parking garage attorney said his clients would be willing to pay the $300,000 estimated as the cost of repairing the access ramps if they could get a long-term lease. But the receiver was prevented from giving long-term leases because of the possible sale of the property.

Foreman said after the meeting he might be willing to grant a long-term lease because of the uniqueness of the situation, but the RTC action might push him out of the case.

Ilene Goldstein, the federal bankruptcy trustee, said she would try to continue to move the property toward a quick sale whether the case ended up in federal court or stayed with Foreman. But she added that removal of the case to federal court could further cloud title to the property, possibly hampering the sale.