Sale-Leasebacks Prove Costly, Bank Alleges

HIGHLAND PARK, IL-After selling 513 Central Ave. here for $5.5 million, Bank One officials were dismayed to learn the property was “flipped for a price significantly higher” six months later, according to a lawsuit filed against Jones Lang LaSalle. Deals involving former Bank One assets here and a nearby North Shore suburb of Northfield, as well as Indiana communities of Fort Wayne, Gary and Merrillville plus four Michigan locations failed to deliver benefits Jones Lang LaSalle touted, Bank One alleges in a lawsuit (See: Bank One Seeks $120M from Jones Lang LaSalle ).

“The true value of the Highland Park property was intentionally suppressed or negligently overlooked,” Bank One alleges. It was among eight properties sold to car dealer Edward F. Napleton for an ultimate purchase price of $29.75 million, whittled down from $44 million even while Bank One was leasing more space.

Lake County property records indicate Bank One got $5.5 million in May 2000 for the asset in this city’s redeveloping Downtown, six months before it was sold to Chicago-based Klairmont Enterprises, Inc. for $8.6 million.

In the case of the property at 504 Broadway in Gary, Jones Lang LaSalle’s analysis was based partly on an appraisal that used comparables from as far away as Canton, OH—about 200 miles away–and ignoring a recent $1.5-million purchase offer and capital improvements.

“The recommendation to sell the Traverse City property was dependent on an argument that high-rise construction would block access and views currently associated with the bank’s real estate,” according to the lawsuit. “This was simply untrue.”

Jones Lang LaSalle officials label Bank One’s charges without merit, suggesting it is an attempt to avoid paying a $1.2-million bill the real estate advisory firm is seeking collect in a separate lawsuit. “We stand behind the quality of our work and the advice of our people,” says chairman Stuart L. Scott says in a statement. “At the end of the day, we are confident that our reputation for putting our clients’ interests first will prevail.”