River Forest developer involved in lawsuit

$11 million construction loan for Forest Park project declared 'in default'

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By Jean Lotus and Devin Rose

Forest Park Review Editor and Staff Reporter

A River Forest developer who has an agreement with the village to cultivate a block on Lake Street at Lathrop Avenue is one of a three-partner team being sued for their personal assets by a bank last month for failing to pay off an $11 million construction loan.

Timothy Hague, Seymour "Sy" Taxman, and Timothy Anderson built Forest Park's 193-unit Residences at The Grove in 2007. They signed personal guarantees backing construction loans for the project just as the real estate market tanked.

Hague, president of Keystone Ventures LLC, had submitted ideas to demolish much of the 7600 block of Lake Street and build a structure with retail on the bottom floor and condos above. He's been trying to buy the parcels on the site but has had disagreements with the owner of a dry-cleaning business there who is involved in a contamination lawsuit. A phone call to Hague for comment was not returned.

Village President John Rigas and Village Administrator Eric Palm said last week they hadn't heard about the lawsuit. Rigas said nothing formal had been submitted to the village regarding the site, and the next step for the development would be to put plans together to submit to the Development Review Board.

Both Rigas and Palm did not want to speculate on how the lawsuit would affect Hague's potential plans.

The village has $1.9 million from a closed TIF district that they can use toward the Lake and Lathrop development until the end of 2013. At that time, the money will be sent back to the county and distributed among local taxing bodies.

Taxman is head of Skokie's Taxman Corp., a development firm with a history of projects in River Forest, Oak Park and Forest Park. Anderson is CEO of Focus Development Inc., based in Northfield, which built the complex and still owns 25 percent of the units.

Glenn Taxman, lawyer at Much Shelist in Chicago, said Sy Taxman would have no comment on the lawsuit. Timothy Anderson was not available and did not return an email seeking comment.

The partnership originally borrowed $25 million in 2005 from the now-defunct Midwest Bank, according to a complaint filed Oct. 24 in federal court. Midwest failed, and the assets were acquired by FirstMerit bank in Akron, Ohio, which is why the suit was filed in U.S. District Court in Chicago.

According to court documents, the loan was renegotiated seven times, with the bank writing down the loan to a final $11 million, including interest and attorneys' fees. A final deadline of Oct. 5 was set for a partial payment. According to documents, the three partners were to come up with a "guarantors paydown" of $500,000. They were then to refinance the amount of $7,500,000.

The three were also required to come up with $1,800,000 to be applied to the principal balance of the loan in the form of 10-year promissory notes. Taxman was to pay $659,963.47 and Hague's share was $144,870.03. Anderson was asked for a promissory note of $804,833.50. The group was also required to put aside an interest reserve of $76,218.22.

But the deadline came and went, and the bank claimed that the partners' failure to pay "constitutes an event of default."

The Grove covers 6.3 acres at 7757 Van Buren St. near the Forest Park Blue Line. At the time it was built, condos were priced from $181,990 to $258,990 for a one-bedroom and between $288,990 and $442,990 for two- and three-bedroom units. Between 2007 and 2011, six condo units and one townhouse were foreclosed, said Tim Davis, of M&M Property Management.

Focus Development still owns 39 condominiums in the Grove, as well as four townhomes. Timothy Anderson told Crain's Chicago Business that Focus-owned units are rentals because the company believed they'd hold their value after the mortgage crash.

But if Focus is forced to liquidate the 39 units at The Grove, local condo owners fear they'll take another hit on property values.

"That would be terrible for us," said condo owner Leah Shapiro. "Because of the market, a lot of people are underwater and have been selling their units for less than they're worth," she said.

As an owner, Shapiro said the tenants in the rental units were good neighbors. "Right now, Focus is doing the right thing by us," she said. "And our management company, M&M is great, and that means a lot." The president of the Grove condominium board declined to comment.

Reader Comments

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Comment Policy

Readily Available Public Info III  

Posted: November 20th, 2012 6:06 PM

Update: Got hold of and reviewed complaint exhibits and can't conclude that developer ever defaulted prior to 2012. Facts not there. Doesn't change main question about what Village knew in 2010 and whether we have an escape clause in contract.

Charlles from RF  

Posted: November 18th, 2012 5:32 PM

I am so thankful to those in RF that are wising up and using the ballot box to take back the village from the OPCC/RFSC. Makes worse is those on the village said they would use HR to make loans to developes, now we knowbanks have have called the loan

Readily II  

Posted: November 18th, 2012 1:33 PM

Actually, the complaint is easily found on the web. Says the loan was first renegotiated back in 08 presumably to avoid default. Any diligent financial investigation by the Board would have found this. This is on the Board, not the developer

Readily Available Public Info  

Posted: November 18th, 2012 1:18 PM

According to the web, the developer was in default in Forest Park for TWO YEARS PRIOR to getting this deal. And, it was all kept hush hush. This smells even for River Forest. Everyone on the Village Board should resign in shame NOW.

RF Achievement  

Posted: November 18th, 2012 6:50 AM

@John - Gibbs and Adduci Rigas, Winikates, ran as a Slate. They had a website, I attended one of their gatherings at a house. They all said were pro home rule for development. They said HR would allow them to give loans to Developers.

Thinking  

Posted: November 17th, 2012 3:54 PM

Stay on point. Is Hague a member? Guessing yes. If Home Rule would allow us to tax club memberships we should reconsider.

Let's get serious  

Posted: November 17th, 2012 2:00 PM

Enough about OPCC. 20 years of its members Rigas/Paris running River Forest and using real estimates our pensions are as much as $40,000,000 underfunded. That's nearly 4x our annual budget. Little RF. I don't want to hear about OPCC.

Gotcha from River Forest  

Posted: November 17th, 2012 10:43 AM

'bout time the village board take a close look at their mentor's previous dealings with Hague re the Town Centers, partiicularly the shotgun marriage between Hague and Taxman.

Discretion   

Posted: November 17th, 2012 9:14 AM

"Take Care": What is said at the OPCC should stay at the OPCC.

Tom from River Forest  

Posted: November 17th, 2012 5:17 AM

HR aside, no one can control the economy which dictates success of a project, that is unfortunate. The bigger issue, why would a citizen board so treasure HR yet not be completly transparent on WHY it is needed. Education of facts were poor.

Re  

Posted: November 16th, 2012 4:02 PM

Exactly. The Village board either did a financial investigation and caught this and went ahead anyway or they are incompetent. Either way looks like might be breach of fiduciary duty. WJ needs to get the answers and tell the story of how this went down back when it was approved.

Jim Wisuri from River Forest  

Posted: November 16th, 2012 2:23 PM

Lot of tangential stuff in the comments. Seems pretty simple to me. If a developer is unable to meet obligations, the village should be able to disqualify the developer. If there's no such escape hatch, then the legal team has dropped the ball.

Take care "down there"   

Posted: November 16th, 2012 12:57 PM

Hey John, keep it up as your reputation precedes you.

RF Man  

Posted: November 16th, 2012 12:44 PM

Isn't Hague the guy who developed Plunketts to look like a high-end cell-block? Wonder how Loyola feels about him as a partner now? Was never clear on why Hague seems to get all the RF deals. Maybe those days are finally over? Hoping.

Dorothy  

Posted: November 16th, 2012 9:56 AM

Ask Mr Haugue how his super mega plan of developing the CVS/DUNKIN Dounuts, Elite Tire parcel worked out.

Stu Ross from St. Joe, MI  

Posted: November 16th, 2012 6:47 AM

Can't resist reading the news having spent most of my life in OPRF, but these stories of over-development remind me why I left IL. The promise is always to add vibe, and dilute local tax burdens, but the result is always more congestion, higher taxes

RF Achievement  

Posted: November 15th, 2012 8:22 PM

@J.O. did you misread my post. Never attacked anyone. Spoke the truth from what has been written, from what has been reported by those who have witnessed and has been documented in the minutes. You approve of HR and the TIF. Taxpayers do NOT!

Gary Sullivan from River Forest  

Posted: November 15th, 2012 5:20 PM

cont'd. Apologist for whom? You must be a very strange person. I haven't nor why would you think I have for other people? Do I like Frank Paris and John Rigas sure do. Do I agree with them all the time; nope, unless they voted for Romney-oops

Gary Sullivan from River Forest  

Posted: November 15th, 2012 5:12 PM

The Home Rule 80%,Dear 80%, Watchdog: What is wrong with loyalty or rather is it called friendship? Heck for all I know you guys might be "friends" of mine and just want to bust my buttons b/c you know that I do as I say. Human cloning?! That's rich

Frustrated with the uninformed from River Forest  

Posted: November 15th, 2012 5:04 PM

I can't understand your frustration. If you attended a village board meeting, you would learn that Roma Steinke as the village clerk does not have a vote. And why, pray tell, don't you wonder how Mike Gibbs voted on the issue?

John OConnor from River Forest  

Posted: November 15th, 2012 4:34 PM

Dear Gutless ones, Concerned, The Jackal, Home rule 80%, RF achievement, Charles from RF, Frustrated Voter, Taxpayer & Enuf is Enuf. Not one of you has the courage to put YOUR NAME on the line when attacking good people.

Watchdog from River Forest  

Posted: November 15th, 2012 4:03 PM

Gary, your persistent loyalty to the Paris/Rigas regime strains my rational circuits in view that you were blindsighted when the regime added a FOURTH trustee candidate on theiir slate when you sought reelection.

Enuf is Enuf  

Posted: November 15th, 2012 2:37 PM

RF what are rules here-ethics?? When considering folks for public contracts do you not require what business they are involved with & do some checking around? Would have been EASY to locate projects & the default. HR was to help this developer???

Frustrated Voter Again  

Posted: November 15th, 2012 2:11 PM

Adducci, Steinke, come out come out wherever you are and answer the questions below. Be accountable!

James from River Forest  

Posted: November 15th, 2012 11:24 AM

How can they discuss next steps when it appears that this developer is broke? RF should not be considering moving forward on this foolish deal. Give us our $1.9 Million back to help lower these outrageous property tax bills the Village is sending us!

Taxpayer  

Posted: November 15th, 2012 9:25 AM

Charles, the Village is committed to this developer. The TIF is closed, so they can't change the contract or the developer even if they wanted to. So, he does it or the money gets given away. One of many things about this deal that may smell.

Frustrated Voter  

Posted: November 15th, 2012 8:37 AM

Ms. Adducci and Steinke: Did you vote for or support this poorly planned embarassment of a plan? Yes or no? While you are at it, did you or didn't you support Home Rule? Yes or no? Lets get the record straight before the election.

Charlles from RF  

Posted: November 15th, 2012 5:25 AM

Mr. Rigas should look for another dieveloper. This is serious. With development lawsuits by Financial Institutions - RF citizens should not be suporting business with someone involved in the same shady deals.

RF Achievement  

Posted: November 14th, 2012 6:54 PM

RF TIF and HR - what we see is an attempt to slip things by busy people to reward & enrich a very few. Yes, even in the well heeled RF we are only talking about a VERY FEW. Finances of this town are OWNED by Paris & those that defend him-BAD scene.

Dear 80 per cent  

Posted: November 14th, 2012 6:25 PM

Sullivan spent his time on the Village Board trying to ban human cloning in River Forest. Google it. Apparently he changed his mind as he now spends his time supporting Paris clone John Rigas and his developer plans gone bad.

The home rule 80%  

Posted: November 14th, 2012 5:39 PM

Paris/Rigas apologist Gary Sullivan (and former Trustee) blames Barney Frank for River Forest's problems. Really - see below. This town and its leaders are now officially jokes. Too bad the joke is on us.

The jackal from River Forest  

Posted: November 14th, 2012 4:25 PM

Is Rigas going to bail out Hague with the $1.9 million TIF excess or return it to the River Forest property taxpayer to whom the money belongs?

Gary Sullivan from River Forest  

Posted: November 14th, 2012 2:43 PM

Don't blame the developers b/c I am sure they would not have personally guaranteed the loans if they knew that idiots like Barney Frank were going to cause the collapse of the industry.Look in the mirror my friend before you judge people too quickly

Concerned  

Posted: November 14th, 2012 11:43 AM

Really? So the Village is looking at Hauge to develop Lake & Lathrop even though he took a bath on the above development. Oh yeah, I forgot that the Village can sweeten the pot with the 1.9 Mil TIF money.

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