advertisement

Developer seeking funds for Elgin, Fox Lake senior living projects despite lawsuit

A Chicago developer says he's committed to securing funding to complete senior living facilities in Elgin and Fox Lake despite an ongoing federal lawsuit that alleges he misused investments.

Developer Taher Kameli of Bright Oaks Group said a yearslong investigation by the U.S. Securities and Exchange Commission that resulted in a federal lawsuit in June 2017 "created a lot of issues for us." The lawsuit was dismissed in March but allowed to be refiled in May; Kameli denies the allegations and filed a motion to dismiss in August.

"For the past five years, we have the presence of the SEC in the project ... The bank, the financing institutions, they become a little bit more cautious. That's why everything got delayed."

The company halted projects in Elgin and Fox Lake after running out of money in 2016. A facility planned in West Dundee never broke ground.

Construction costs were estimated at $23 million in Fox Lake and $19.5 million in Elgin. Kameli said he hopes to secure financing and finish both in 2021.

However, the municipalities are turning to the courts to proceed with demolition and cleanup, and force the developer to pay.

Elgin issued a request for demolition bids for the site at 3271 Route 20, which was to be called Elgin Memory Care, Elgin Community Development Director Marc Mylott said. The city had filed a lawsuit in Kane County that resulted in a May 2018 agreement that the developer followed by partially cleaning up the site and installing fencing. Kameli's company had one year to restart construction or clean up the site.

"That deadline passed, and Elgin Memory Care did neither," Mylott said. The agreement authorized the city to finish demolition and clean up, and use funds it held from the developer to pay for the work.

Kameli said he plans to fight that in court to recoup any costs. "I don't believe there is any danger or hazard (at the site) for the citizens of Elgin. There is fencing around it. I don't know what they are thinking," he said.

Donovan Day, community development director in Fox Lake, said the village never heard back from the developer after issuing a demolition notice for the site at 329 Thomas Lane. Soon after, a Florida company contacted the village with interest in finishing the project, but nothing came of it after a June meeting, Day said. The village plans to file a lawsuit in Lake County to proceed with demolition and pay for it with Kameli company funds, he said.

According to the SEC lawsuit, Kameli, who works as an attorney, received about $88.7 million from 226 immigrant investors between 2009 and 2016 to build senior facilities in the Chicago area and Florida, and told investors he would help them obtain permanent U.S. residency through the EB-5 visa program. That program provides a path to permanent residency for immigrants who invest in a commercial enterprise that creates at least 10 permanent, full-time jobs. The minimum investment was $500,000 when Kameli obtained the funds; a new federal rule that took effect Thursday raised that minimum to $900,000.

The SEC claims Kameli diverted, commingled and improperly used funds and spent a "significant portion" of proceeds to benefit himself, his brother Nader Kameli and his companies.

"We believe that nothing wrong was done, and we fulfilled everything and the investors had full disclosure," Kameli said. "The question is, was there enough disclosure in the documents."

The only senior facility built by Kameli and his company is Bright Oaks of Aurora, a 60-unit building in Aurora. It cost nearly double the projected $8.5 million and had to borrow millions, and eventually the management firm filed for involuntary bankruptcy, the lawsuit states. The property was repurchased by Kameli through a entity called Aurora Senior Care LLC, which submitted a winning $12.7 million bid after an auction in January.

"I believe it's a good property," he said. "We have a lot of emotional ties to that location and we want to make sure it goes into the hands of people who will appreciate the employees enough, or the residents at that location."

Article Comments
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the "flag" link in the lower-right corner of the comment box. To find our more, read our FAQ.