Kimball Hill warns it may shut down
Kimball Hill Inc. on Tuesday warned it might become the latest Chicago-area victim of the national housing crisis.
The Rolling Meadows-based homebuilder said in a filing Tuesday it has "substantial doubts about whether we will be able to continue as a going concern."
If it does file bankruptcy it will be the area's second major homebuilder to do so in recent months, following Warrenville-based homebuilder Neumann Homes last fall.
Led since 1969 by area philanthropist and Harper College Trustee David K. Hill, the son of founder Kimball Hill, he relinquished the chief executive role at the firm last year after a reported illness. He could not be reached for comment Tuesday night.
The ninth largest homebuilding firm in the Chicago area last year, Kimball Hill has developments in 12 markets, including in Dallas, Ft. Worth, Houston, Las Vegas, Sacramento and southwest Florida.
On its Web site the company said it is the 22nd largest homebuilder in the country.
Tracing its roots to 1939, Kimball Hill "practically built 95 percent of Rolling Meadows," housing analyst Tracy Cross said.
For decades a local top five homebuilder, Kimball Hill rode the wave of development in the Northwest suburbs and a few years ago expanded into hot markets which since have been punished in a "housing meltdown," said Cross, whose Tracy Cross & Associates is based in Schaumburg.
The expanding Kimball Hill was caught with a high debt load as the housing downturn hit in the fourth quarter of 2005, Cross said.
Kimball Hill, in its Securities and Exchange Commission filing, said it is in discussions with lenders but is late on repaying $500 million in loans, and it lost $220.5 million last year.
The privately-held firm saw sales fall 23 percent last year, to $894 million, it said in its annual report.
Kimball Hill is in the process of cutting jobs and selling properties to raise money, raising $58.9 million last year and $30.5 million in 2006, the company said.
Cross said one of the company's problems occurred in recent years at Settlers Ridge in Sugar Grove, a proposed 2,470-home development delayed by hefty "impact fees" from the village.
Kimball Hill has developments, according to its Web site, in Bartlett, Elgin, Hoffman Estates, McHenry, Montgomery, Naperville, Sugar Grove and Yorkville.
"Whether it will fail or not, I can't tell you," said Cross, predicting the housing downturn will last into 2009. "But there will be fewer (homebuilders) next year than there are now."