Accusing South Barrington trustees of a scheme to scuttle a large housing project, developers of the former Klehm nursery have filed a $54 million lawsuit against the village.
Developers with Mesirow Stein Real Estate Co. had been forging ahead with a controversial plan to build 495 homes on the site when the village derailed their efforts last month, voiding annexation and site approvals granted in January.
After the approvals, development opponents unseated Village Board incumbents in April’s election. In the months that followed, South Barrington’s support for the project unraveled, as a former trustee’s vote was challenged on ethical grounds and a new vote was taken.
The developers say that the ethics proceedings, as well as the second vote, were invalid.
Plaintiffs in the lawsuit, filed earlier this month in Cook County Circuit Court, include The Woods of South Barrington LLC, which is made up of developers from Mesirow Stein. Other plaintiffs are Klehm Properties Inc., owner and seller of the former nursery, and LaSalle Bank, the property’s titleholder.
The lawsuit contends that the January agreements with the village are valid and that the village is obligated to execute them. It seeks a permanent injunction requiring the village to meet its obligations under the pacts.
Mesirow Stein calculates its damages so far at $30 million or more, while Klehm Properties and LaSalle Bank are seeking at least $23.7 million as a result of the board’s actions. If the village loses, it could cost millions more, once attorneys’ fees and other unspecified relief are included.
South Barrington officials could not project how much it will cost the village to defend itself. The village has $1.3 million in reserves to fight the lawsuit and might need to resort to a tax increase, Village President Frank Munao said.
Trustee Todd Swim said the development is well worth fighting.
“I think the cost of not defending this suit is incalculable,” he said. “The financial impact on the village is going to be massive if we don’t challenge the development on what we think are very legitimate grounds.”
The housing project sparked opposition from residents even before village officials approved the deal. Opponents argued that 495 homes on the 610-acre plot would create a higher density of housing than the village has allowed and destroy the town’s bucolic character.
In July the village Ethics Commission, hearing a resident’s complaint, determined that a former trustee had violated the village’s ethics code when he voted on the proposal. The commission found that then-Trustee John Ardente’s deciding vote violated the code because he was also a commissioner of the Park District, which would gain land and money from the project.
In August the Village Board overturned the January decisions, citing the Ethics Commission’s ruling.
The lawsuit alleges that those actions are part of a scheme undertaken by the newly elected trustees, who had campaigned on the promise that they would nullify the agreements.
