Kimball Hill negotiates for more time

Kimball Hill Inc. has successfully negotiated with its lenders to give it more time on its $500 million line of credit, now in default, according to a Securities and Exchange Commission filing.

The Rolling Meadows-based home builder said it has until March 14 to make longer-term arrangements with the group of lenders led by Harris N.A.

The lenders agreed to give the ailing developer access to an additional $10 million of credit and permission to seek another $5 million to satisfy cash flow needs until additional financing can be worked out, according to the filing.

The landmark builder of Rolling Meadows and numerous other areas in the Northwest suburbs said earlier this month it lost $220.5 million last year.

It also acknowledged auditor Deloitte & Touche had "substantial doubts about whether we will be able to continue as a going concern."

The firm expanded to 12 national markets in recent years, just as one of the deepest housing recessions in recent history was developing.

If Kimball Hill is forced into bankruptcy, it would be the second to do so in recent months. Warrenville-based Neumann Homes filed for bankruptcy in the fall.

Kimball Hill has several projects underway in the suburbs, including Sugar Grove where its Settlers Ridge had planned to develop 2,470 homes on 1,300 acres. Just 150 to 200 permits have been applied for, according to Sugar Grove officials.

Led since 1969 by area philanthropist and Harper College Trustee David K. Hill, the son of founder Kimball Hill, he gave up his role as chief executive officer last year and still serves as chairman of its board.

Although controlled by the Hill family, the company holds public debt and must file with the SEC when major financial moves are made.

Kimball Hill CEO Kenneth Love could not be reached for comment.