The would-be developer of a stalled project on the southwest corner of Lake Street and Lathrop Avenue is again suing the village of River Forest.
It is the latest twist in the ongoing chess match between officials of Lake Lathrop LLC and the village. Lake Lathrop claims the village acted illegally in its denial of a new building permit. The lawsuit against the village is the second legal action Lake Lathrop officials have taken this year to protect their interest in the project.
The four-story, mixed-use development was to contain 22 condominium units with 14,000 square feet of retail space. The project had been on the drawing board since before the Village Board approved Lake Lathrop’s proposal in 2016.
River Forest pulled the plug on the Lake and Lathrop development almost a year ago, apparently ending years of frustration for village officials and village residents, especially those who live near the development. But Lake Lathrop officials in May countered by applying for a new building permit for the development. This too was denied by the village.
“The village is very confident in its position and is prepared to defend itself against the claims made by Lake and Lathrop Partners,” Matt Walsh, village administrator, said.
Daniel W. Bourgault of Klein, Thorpe and Jenkins, an attorney representing the village, explained in a letter to Lake Lathrop officials that the village does not have the authority to review or approve the application and said that Lake Lathrop officials no longer have the necessary authority to proceed with the project.
“The redevelopment project was a project for which the village sought proposals from the public and which the village partially funded using public funds and as such any proposal by any contractor for the project must be approved by the Village Board of Trustees before they are eligible for a construction permit for the work,” he said in the letter.
The letter further stated: “While Lake Lathrop Partners LLC and its affiliates previously received that approval through the redevelopment agreement, Lake Lathrop Partners LLC has defaulted and breached said redevelopment agreement and as such the redevelopment agreement has been terminated.
“As a result of the termination of the redevelopment agreement, Lake Lathrop Partners LLC and its affiliates no longer have the necessary approval from the Village Board of Trustees to continue the redevelopment project and as such are not eligible for a construction permit for said redevelopment project. Before a new construction permit can be considered for the redevelopment project, approval must be granted by the Village Board of Trustees and a new redevelopment agreement must be entered into.”
Since neither have been obtained at this point, the construction permit application cannot be considered by the village, he added
In September, officials repealed the building permit for Sedgwick Properties, an authorized agent acting on behalf of Lake Lathrop Partners LLC, and issued a stop work order. They said those steps were taken because Sedgwick failed to meet the requirements and conditions of the village’s 18-month building permit, which was originally issued in February 2022.
“As of Sept. 15, 2023, at 4:30 p.m., the Village has repealed the building permit for the Lake and Lathrop development at Lake Street and Lathrop Avenue and issued a stop work order to Sedgwick Properties, the developer,” village officials said in a press release issued at that time.
The long-delayed project had been on life support since April 2023, when Beverly Bank and Trust, a Wintrust-affiliated bank that was financing the development, filed suit against Sedgwick Properties in Cook County court, looking to claw back $4.2 million from the $20 million line of credit it issued in 2022. 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.
The foreclosure case was recently reassigned to a new judge, Circuit Court Judge Chloe Pedersen. A hearing for that case is scheduled for this month. The Wintrust foreclosure case will take precedence and, once the foreclosure case is resolved, Wintrust may be able to sell the property to another developer, according to village officials.
In March, Cook County Circuit Court Judge Catherine A. Schneider issued an order revoking the authority of Ascend Real Estate Group, the court-appointed receiver, to market or sell the property.
That action supported a motion to reconsider presented by Lake Lathrop Partners LLC and Sedgwick Properties in January. In the motion to reconsider, Lake Lathrop Partners disputed that the appointed receiver should be allowed to advertise and market the subject property for sale. Lake Lathrop Partners argued that such power is not granted to a receiver under the Illinois Mortgage Foreclosure Act. Ascend had engaged Jones Lang LaSalle, a Chicago real estate company, in the fall to conduct an “aggressive marketing campaign” that resulted in five written offers, the highest of which was submitted by Michigan Avenue RE. Michigan Avenue RE reportedly had submitted a bid of $3.75 million for the property and was negotiating on a contract with Ascend.
“The priority for this property continues to focus on attracting an appropriate and viable development to the site,” village President Cathy Adduci said in a special e-news message posted on the village website Aug. 15. “Wintrust Bank continues to pay all costs associated with the upkeep of the property, including property tax bills. The village will continue to be responsible for the zoning and development rights of the property.”