A state appeals panel has signed off on the decision by the Chicago
Neighborhoods Initiative, an organization dedicated to encouraging economic
activity by redeveloping properties in some of the city’s troubled
neighborhoods, to cut a veteran of the Chicago real estate development sector
out of a project to build a new food warehouse and distribution center in
Chicago’s Pullman neighborhood.
On July 13, a three-justice panel of the Illinois First
District Appellate Court sided with CNI in its dispute with Wendy Berger
Shapiro, principal of Chicago-based industrial development company WBS
Equities, and her affiliated corporate entity South Creek 12 LLC, over who
should get to develop the parcel in the Pullman Park development on the city’s
The court’s decision came in an unpublished order issued
under Supreme Court Rule 23, which limits its use as precedent. The order was
authored by Justice Terrence J. Lavin, with justices Mary Anne Mason and James Fitzgerald
The case had landed in Cook County court in October 2015,
when Shapiro and South Creek 12 sued CNI, asking the court to compel the group
to honor the deal she claimed CNI violated when it pulled the plug on South
Creek 12’s participation in the development of the proposed distribution
According to court documents, CNI and Shapiro’s business
entities had previously partnered on a project to bring a Mariano’s supermarket
to Chicago’s Bronzeville neighborhood.
That was followed with an agreement reached in November 2014
under which CNI would sell South Creek 12 a parcel on E. 111th Street,
just off the Bishop Ford Freeway (Interstate 94), should Shapiro’s group locate
a food manufacturer or distributor willing to operate the desired warehouse and
distribution center on the site.
In her complaint, Shapiro said she had lined up a tenant for
the prospective building, a company identified in the complaint as PIG
Investments LLC, a “multi-million dollar corporation that owns food, beverage
and related companies.” Under that tenant deal, PIG would lease space in the
new 150,000-square-foot food distribution building, with a parking lot for 200
The court documents did not specify the financial terms of
either the land purchase or the lease.
Shapiro alleged South Creek 12 had notified CNI of the lease
deal in August 2015, shortly before a deadline to complete such a deal.
However, CNI, in a counterclaim, said the so-called “user
notice” it received was “defective,” as PIG was identified in the notice as “an
entity to be formed” and rental rates were not clearly stipulated in the
In December, a Cook County judge granted summary judgment to
CNI, prompting Shapiro’s appeal.
However, appellate justices said the lower court was correct
in ruling for CNI.
The justices said the purported notice South Creek 12
supplied did not live up to the terms specified in its deal with CNI.
Specifically, the justices cited language in the contract which required South
Creek 12 to deliver a “fully executed agreement with such agreement granting
rights in and to the Property to a tenant or occupant for all or a portion of
“Although South Creek 12 sent the purported User Notice to
CNI on Aug. 28, 2015, before the deadline, the attached (agreement) granted PIG
no rights to the Property whatsoever,” the justices wrote.
The justices also rejected South Creek 12’s contention they
met the spirit of the contract by forwarding a user notice, even if CNI may
have believed the notice was “inadequate.”
“Pursuant to South Creek 12's unreasonable suggestion that
only the label matters, South Creek 12 could have avoided the termination of
the Purchase Agreement by submitting anything, which would not have satisfied
the parties' interest in seeing that the Property be put to beneficial use to
revitalize the neighborhood,” the justices wrote.
In March, the city of Chicago and CNI announced Whole Foods
had agreed to relocate its distribution center from northwest Indiana to
South Creek 12 was represented in the action by the firm of
Greenberg Traurig, of Chicago.
CNI was represented by the firm of DLA Piper.