Lincolnwood files lawsuit against North Capital Group


The Village of Lincolnwood has filed a lawsuit in June against North Capital Group hoping to force the owner of the site of the demolished Purple Hotel to clean up the site as part of a pre-development agreement.

"We sent them a 30-day notice in May informing them that they were required to clean up the existing demolished property to maintenance standards as part of their pre-development agreement, but that has expired," village manager Timothy Wiberg said. The village has granted three extensions of the agreement, as North Capital Group has not begun work on a development that the village approved.

On Feb. 16 the Lincolnwood Village Board of Trustees hesitantly approved a third extension to the agreement Group for demolition activities at the site provided that the firm produced a construction loan of about $117 million by May 15 and final plans for construction of the Shoppes at Lincoln Pointe mixed-use development by Sept. 15.

"We kept giving them extensions, and unfortunately May 15 came and went and we gave them a 30-day notice to comply and they didn’t, so we will be enforcing our laws," Wiberg said.

"It’s all up to the judge now," Wiberg said. "The judge can either force them to comply to clean up the site or we will do it for them. Either way, they will pay for it."

Wiberg said that the clean-up of the site is expensive because the foundation of the hotel is still intact and the basement remains. The property is at 4500 W. Touhy Ave.

"We need to get the property up to speed so the neighbors are not complaining and the property complies with our laws," Wiberg said. "To clean up the property it is something like a million dollars. It almost looked better when the hotel was still standing."

According to the lawsuit, code violations include the failure to restore the property to a clean and safe condition, to backfill all excavated portions of the site, to remove concrete and asphalt pavement, to seed or sod, to grade and maintain the property to prevent soil erosion, to prevent the accumulation of stagnant water and to keep site free from rodents.

The fines associated with each of the violations are up to $2,500 per day that the property has been in violation since June 16.

The board also approved extensions to the agreement in July of 2014 and in February of last year. The developer demolished the hotel last year to prepare for construction of the $130 million development.

The development was to feature a 160-room Springhill Suites Hotel, about 126,000 square feet of retail, restaurant and entertainment space, a 30,000-square-foot grocery store, a 23,000-square-foot health club, 30,000 square feet for office use and an underground parking garage.

Neal Stein of North Capital Group said in February that he was seeking a $117 million loan from International Finance Corporation. Last year the trustees heard a proposal from Cleveland-based Stark Enterprises, which was seeking to purchase the site from North Capital Group for a mixed-used development after the plans for the Shoppes at Lincoln Pointe project were dropped.

The $174 million Stark development would have featured about 360 luxury rental units on 359,345 square feet of space, 132,500 square feet of retail space and 780 parking spots.

Wiberg said in February that an $11.5 million foreclosure lawsuit was filed against North Capital Group. A lender alleges that the firm defaulted on a loan on the property, he said.