The future of the Lake and Lathrop condominium project in River Forest could be in doubt after Beverly Bank and Trust, which is financing the development, filed suit against the developer, Sedgwick Properties.
Through the lawsuit filed last month in Cook County court, Wintrust-affiliated Beverly Bank and Trust is looking to claw back $4.2 million from the $20 million line of credit it issued in 2022. This story was first reported by The Real Deal, a real estate website.
River Forest officials are tight-lipped regarding the lawsuit, issuing a statement acknowledging awareness of the legal action and indicating a willingness to work “with both parties to reach a resolution that is in the best interests of River Forest and its residents.”
The project has been on the drawing board since before the village board approved, in 2016, the proposal by Lake Lathrop Partners LLC to build a four-story, mixed-use development containing 22 condominium units and 14,000 square feet of retail space. Variations on the same project had lurched and lingered for a decade previously. The original project included another story and eight more units but was scaled back.
In the lawsuit, the lender has reportedly cited several provisions in its loan agreement with Sedgwick affiliates that were violated including that the contract required the borrower to stay in compliance with local regulations and to stick to a tighter construction timeline.
In the village-issued statement, River Forest officials referred to compliance with local regulations.
“As a general rule for all development projects, the village’s priorities are to monitor proper maintenance of worksites, in addition to the quality of construction, and timely completion of said projects,” the statement read. “Sedgwick has been found liable by the village for more than $36,000 in code violations over the duration of the project.”
Like the lender, some village residents have asserted in letters to the editor to Wednesday Journal or while speaking during the citizen comments portion of village board meetings that little or no work is being done at the site. Many of those complaints came from residents of nearby condominium buildings.
Mark McKinney, project manager for Sedgwick Properties, a partner in Lake Lathrop Partners, admitted previously that the project “got off to a slow start” but claimed the developer is making “consistent progress.”
This week, he said construction is “progressing well” and the upper parking deck “should be poured this week.”
McKinney acknowledged previously that construction will not be complete when the permit that was issued in February 2022 expires in August.
“The extension request will be made in a timely manner prior to the expiration date,” he said, adding that the target date for completion is now summer of 2024.
Permit extensions can only be granted by a vote of the village board after receiving a written request from the applicant. River Forest officials noted in the village-issued statement and verified that a formal extension request from Sedgwick had not been received.
The project has experienced a series of delays over the years, including environmental cleanup from a dry cleaner formerly on the site and a lawsuit involving a tenant who did not want to leave.
River Forest officials said in the village-issued statement that they “will continue to seek updates and information from the developer on the project’s progress and will continue to share this information with the public.”