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Local News

Loan may tie up Two Rialto Square

The Two Rialto Square building is seen Aug. 31 in Joliet.
The Two Rialto Square building is seen Aug. 31 in Joliet.

The Rialto Square Theatre board will huddle again this week to mull the sale of an office building, which could get tied up in an old bank loan.

The board met Thursday for an hour in closed session without reaching a decision on the sale of the Two Rialto Square building.

Real estate developer John Bays has offered $350,000, the only offer made when the Rialto sought bids for the property.

“There’s more information we have to gather,” board Chairman Robert Filotto said after the closed session.

The sale of Two Rialto Square could depend on what claims Busey Bank decides to make on the deal.

Busey Bank holds a loan taken by the Rialto to remodel space in its main building, which is separate from Two Rialto Square, for the University of St. Francis, which moved in in 2008. The Rialto still owes more than $2 million on the original $2.8 million loan.

The loan used leases from the Two Rialto Square building as collateral, and the Rialto will need the bank to give up its claim on the leases to sell the building.

“There is an understanding that they will give it to us,” Filotto said. “We don’t have it in writing.”

Filotto was meeting with the bank Friday to discuss the matter.

One reason the board wants to sell Two Rialto Square is to generate revenue for the theater and needed maintenance. But that too can get tied up in the loan because of the bank’s claims on Two Rialto Square.

“The issue,” Filotto said, “is going to be whether the proceeds of the sale are going to be used to reduce the debt or whether any of the proceeds can be used on this [theater] building.”

Two Rialto Square consists of a six-story building and adjacent two-story building totalling 675,000 square feet.

Bays has expressed interest in converting the complex into a hotel, although he also may keep it an office building and restaurant.

Two Rialto Square has been used to generate office rent revenue and offset the costs of running the theater. But only five tenants are left after a burst water line in the summer damaged most of the space in the larger building.

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