New chapter for Algonquin's Riverside Square Project

A bank trying to foreclose on a stalled condominium development in downtown Algonquin is willing to end the proceedings if its owners surrender the deed to the property, court records show.

Amcore Bank in 2006 lent Algonquin-based Aspen Homebuilders $13.5 million to complete Riverside Square, an upscale residential building under construction at Route 31 and Route 62. The building was planned to include 54 condominium units and ground-level retail space.

But in January, Aspen and its owners Bruce and Patricia Hawkins filed for bankruptcy protection, detailing more than $43 million in debt associated with the project against less than $574,000 in assets.

A month later, Amcore began foreclosure proceedings against the company, which still owes the bank $12.1 million, according to court records.

Court filings say Aspen has not made payments on the loan since September. Large-scale construction on the project halted a month later.

Now, according to documents, Amcore is negotiating a deal with Aspen in which the bank would drop the foreclosure if the developer hands over the property.

The Rockford-based bank also would not object to a bankruptcy court discharging the $12.1 million Aspen still owes.

Amcore has asked the court for a 90-day extension on their deadline to file an objection to the bankruptcy proceedings while the two sides work on the agreement.

Algonquin officials are hopeful for a speedy resolution, noting that the foreclosure could delay construction even longer.

"This project's been dragging on and sitting all winter without any progress," said Community Development Director Russ Farnum. "We're interested in getting it buttoned up and establishing uses for the building."