Senior housing developer seeking funding for West Dundee, Fox Lake, Elgin projects
Amid an ongoing federal lawsuit, a developer is trying to secure funding to complete senior housing projects that have been delayed for more than a year in Elgin, Fox Lake and West Dundee.
Despite financial challenges for the Bright Oaks Group, CEO Nader Kameli said the company is committed to following through with all three projects.
The West Dundee village board in May 2016 approved plans for the first phase of a Bright Oaks facility at the northwest corner of Route 31 and Willow Lane. Construction on the building, which includes 108 suites for assisted living, memory care and bridge care, was expected to begin later that year, but the $23 million project has yet to break ground.
Kameli said the delay is partially attributed to the property's location along a floodplain, which required additional engineering and approval from federal agencies.
The village's approval of the project is also contingent upon developers providing proof of sufficient funding before breaking ground. Bright Oaks has not yet secured that financing, Kameli said.
The company had to halt projects in Elgin and Fox Lake midconstruction after running out of money more than a year ago, Kameli said. Bright Oaks is hoping to finalize deals with financial companies in the coming weeks, he said, which would allow those senior living facilities, as well as the one planned in West Dundee, to move forward.
A Bright Oaks project was completed in Aurora in May 2016, Kameli said. The roughly 60-unit building is about 50 percent full.
Construction will likely take another 12 months for the $23 million Fox Lake project, he said. The Elgin facility is expected to cost $19.5 million and will likely take another nine months.
The city of Elgin served the company with a notice of demolition in July and intends to seek permission from the Kane County Circuit Court to tear down the unfinished structure at 3271 Route 20 and lien the property for the associated costs, said Marc Mylott, director of community development. Officials are waiting to take action to ensure it doesn't conflict with an ongoing federal lawsuit.
The U.S. Security and Exchange Commission filed the complaint against the development group in June, alleging Kameli's brother, Taher, misused investor funds intended for the senior housing facilities.
Taher Kameli received roughly $88.7 million from 226 immigrant investors between 2009 and 2016, according to the lawsuit. The SEC claims he diverted investor funds from one project to another and spent a "significant portion" of proceeds to benefit himself, his brother and his companies.
"His misconduct has left most of the projects without money to complete construction," the lawsuit states.
Bright Oaks disagrees with the SEC's allegations and is fighting the case in court, Nader Kameli said. Developers hope they'll be allowed to move forward with construction during litigation, he added.
The company's building permit has already expired twice in Fox Lake, said Donovan Day, community development director. The village board is expected to vote in September on whether to extend it for a third time, or put an end to the project and clean up the site at 329 Thomas Lane.
"The confidence level is really low that they'll be able to finish up the project," Day said.
Meanwhile, West Dundee is still hopeful the housing facility will be built, Community Development Director Tim Scott said. The village has received construction documents from Bright Oaks, and Kameli says the company is aiming for a spring 2018 groundbreaking.
"I'm hoping that the SEC has come forward with their interest toward helping the investors," Kameli said. "Helping investors is only going to be served if these projects are completed and financed."