South Elgin sues defunct developer over road, homeowner dues

The village of South Elgin has filed a lawsuit seeking $400,000 plus fines for code violations from a developer who it said it was going to build 16 high-end homes on six acres.

The suit, recently filed in Kane County argues that J.L. Callahan and Callahan Construction of Batavia, which went out of business in 2009, didn't complete infrastructure improvements and has pocketed money from homeowners association dues.

"The village believed that Callahan intended to build what he showed on his construction plans, and authorized Callahan to proceed. But it was all a farce," attorney Gregory Jones argued in the lawsuit.

"Callahan squeezed all the profit from the subdivision by selling off the lots and then took off without ever completing the public improvements," the suit continued. "The streets have never been paved and the stormwater detention facilities are only partially complete, causing flooding and other problems downstream. To make matters worse, Callahan continues to collect - and presumably spend - homeowners association does from the subdivision's residents long after he walked away."

The lawsuit also names the American Southern Insurance Company as a defendant because the Kansas-based company executed a performance bond on behalf of Callahan, which is required by the village. The Parkside Woods development of six acres off Park Avenue and Fulton Street on the village's east side, was approved in summer 2004.

The village seeks $400,000 to cover the cost to repair the subdivision's access road, Hilltop Lane, and also seeks fines for code violations.

"The estimated cost is $400,000. But estimates are based on the cost of materials and labor at the time," Jones said,

Jones added the village was working with Callahan until recently to get the projects completed and there wasn't a "clear line" as to when work stopped and when the alleged code violations began.

The suit also argues Callahan's company incorrectly constructed a water detention area on the site.

In addition to code violations and $400,000 for the road, the suit also asks a judge to order Callahan to provide a full accounting of homeowners association dues collected.

Efforts to reach J.L. Callahan were not successful.

The parties are due in court Aug. 21.