Hoffman Estates officials have reached a $900,000 settlement with an insurance company they sued after a developer folded before paying for road improvements needed after the construction of new homes.
The village had been involved in a legal dispute with Travelers Indemnity Co. over the money for six years, with the matter scheduled to go to trial next month.
Travelers is a successor to Gulf Insurance Co., which originally took on the bond obligations of the now defunct Shoe Factory Road LLC for the development of 342 acres now known as University Place and Laufenburger Farm.
Though the recession ended the development short of what was planned, enough new houses were built to require improvements of Shoe Factory Road near Beverly Road. Those upgrades include widening the road, straightening of its curves and the addition of turn lanes, deceleration lanes, new traffic signals and better signal synchronization.
"The impact on the roads has occurred," Hoffman Estates Village Manager Jim Norris said Tuesday. "The Shoe Factory Road improvements were needed yesterday."
Village Attorney Arthur Janura said Travelers made a variety of arguments of why it had no obligation to pay the money over the past six years, including that the village waited too long to ask, that the work the money would pay for wasn't needed yet, and that the financial responsibility had fallen to the new homeowners.
With the $900,000 and an existing letter of credit, the village is close to meeting its share of final engineering costs for the Shoe Factory Road project it's working on with Cook County, Norris said.
"This is a major hurdle in moving that public improvement along," he said.
Though pursuit of the money cost the village about $170,000 in legal fees, it's reaped a fivefold return on that investment to fund a necessary public improvement, Norris said.
If the case had gone to trial, the legal fees would have gone up by at least another $100,000, Janura said.