Kennedy Homes lays off staff

Another landmark builder of the Northwest suburbs is laying off workers as it struggles to survive the worst housing depression in years.

South Barrington-based Kennedy Homes confirmed Monday it laid off 20 of its 32 employees on Friday and said it is unsure of its ability to start new home construction on undeveloped land.

"We have a financial situation but … (we) intend on building all our homes under construction," said Stephanie St. John, Kennedy Homes comptroller. "We intend on paying all our trades (subcontractors). Hopefully, we'll be able to work our way out of this."

Real Estate analyst Tracy Cross said troubles at Kennedy Homes were rumored for months but he also predicted many builders will find themselves in a similar financial fix.

"There are about 30 homebuilders in the area that build 100 homes or more a year," said Cross, founder of Tracy Cross & Associates, a Schaumburg-based real estate research firm. "About one-third of them are in a similar situation."

Cross estimates Kennedy Homes has been building about 150 homes a year in Northern Illinois and Wisconsin.

Kennedy Homes generated $214 million in sales in 2006 and was the area's 11th largest home builder, according to a listing of developers by Crain's Chicago Business.

If Kennedy Homes is forced to declare bankruptcy, it would join Warrenville-based Neumann Homes, which sought Chapter 11 protection in the fall.

More recently, Rolling Meadows-based Kimball Homes filed a Securities and Exchange Commission report saying it may declare bankruptcy if it cannot meet the obligations of its $500 million credit line. Kimball Hill built most homes in Rolling Meadows.

Kennedy Homes a few years ago switched its strategy and became a low-price, high-value homebuilder, Cross said. Homes in its Farmington Fields East development in Belvidere range from $160,000 to $260,000.

Kennedy Homes, a family-controlled firm, built significant tracks of land as the West and Northwest suburbs were developing.

In Barrington, it built the Fox Point subdivision. In Roselle, it built the Villages of Waterbury. In Arlington Heights, it built the Terramere subdivision.

Kennedy Homes is still owned by Bill Kennedy but day-to-day operations in recent years have gone to Home Builder's Association of Greater Chicago Hall of Fame winner Bill Gronow.