Local News

Appellate court rules against Hebron in yearslong battle with owner of dormant subdivision

‘It’s very neglected,’ a resident of the neighborhood says

The roads inside the Hebron development on Tamarack Trail are seen with need of much improvement on Wednesday, June 23, 2021 in Hebron.  A lawsuit over who should maintain the roads is in the works after the developer abandoned the half-built community when the recession hit.

An appellate court ruled against the village of Hebron late last month by siding with the owner of more than 100 empty lots in the dormant Trails subdivision, where roads remain unfinished more than a decade after it was abandoned by its original developer.

The village had sought to get a letter of credit worth at least $1.8 million from the company J&L Contractors, which had bought 138 of the neighborhood’s 174 lots, as collateral for completing the pavement of the neighborhood’s roads, but the court ruled the business does not have to supply one.

Street conditions are so poor that residents of the neighborhood – where only a few homes were built before construction stopped – sometimes work to fix the potholes themselves, said Jena Losurdo, a resident of the Trails of Hebron for the past nine years. Residents also sometimes mow the open areas that get overgrown with unkempt foliage.

“I personally don’t think that they will be able to get anyone out here to buy these lots because of the conditions of the neighborhood. It’s very neglected,” she said, adding she and her family have looked into moving.

She bought her house out of foreclosure, thinking the roads would someday get finished and more homes could be built in the neighborhood on the remaining lots.

But so far that has not happened, as the village of Hebron litigated for years in court to try to get the company J&L Contractors to supply a letter of credit to the village for a share of the costs to finish the roads.

The village argued J&L was the successor owner of the Trails subdivision after it bought 138 lots of out the neighborhood’s 174 total for just more than $214,000 in a court-approved 2013 sale.

That purchase was made after the neighborhood’s original developer, South Barrington-based Kennedy Homes, fell into foreclosure on the subdivision.

Hebron claimed that because the village never accepted the condition of the roads, Kennedy had not fulfilled its end of the annexation agreement with the village. The village contended that any other future owner of the neighborhood was also obligated to meet the terms of the annexation agreement, finish the construction of the roads and perform snowplowing until the village accepted the roads and completed the annexation.

But J&L said it never assumed those responsibilities by buying the lots, and a three-judge panel for the Appellate Court of Illinois’ Second District agreed. Justice Joseph E. Birkett delivered the opinion, and Justices Mary S. Schostok and Donald C. Hudson concurred.

“Notwithstanding the fact that J&L purchased the bulk of the lots in the first platted phase of the subdivision, under the plain terms of the Annexation Agreement, the purchase, by itself, does not impose Owner obligations on the purchaser,” Birkett wrote.

The village’s attorney, Michael Smoron, pointed in legal filings to documents where J&L presented itself as the owner of the Trails subdivision. Among them is a property tax appeal from 2014, in which J&L said “it has been in charge of the upkeep of all the green spaces, snow removal and upkeep of the roads,” and also said it was a developer.

J&L argued that labeling itself as a developer, and not as the “Owner,” with a capital letter, of the subdivision means it is not obliged to complete the roads as required by the village’s annexation agreement.

“It’s bitterly disappointing and the decision lets J&L off the hook to do the roads, which they swore they were responsible for,” Smoron said. “The appellate court was not persuaded by J&L’s tax appeal.”

Attempts to reach J&L for comment were not successful. The attorney for J&L did not return a message seeking comment.

The village could have finished the roads by drawing on the letter of credit originally supplied by Kennedy Homes, but a former village official failed to do so in time, attorneys who have worked on the case told the Northwest Herald.

The appellate opinion last month also said the village’s dispute lay with Kennedy, but Smoron has said the village would not have been able to recover much, if anything, by suing Kennedy because of its insolvency.

The village will likely have to keep waiting to see if the neighborhood might be sold again to a party that could finish the roads, which would improve the market for the empty lots and may lead to renewed construction, he said.

“What the village has always hoped for is that someone who bought these lots would realize it was in their interest to improve the street to some better condition,” Smoron said.

Losurdo, the resident of the Trails, said she would support the village using its own funding to start improving the neighborhood.

“It doesn’t matter who does it,” she said.