The developers of a proposed condominium building on McKinley Road in Lake Forest have filed a lawsuit against the city seeking at least $1 million in damages, as well as the right to construct the multi-family dwelling that failed to get officials’ approval.
The lawsuit, filed Sept. 27 in Lake County Circuit Court, followed a Sept. 7 City Council vote that sided with a recommendation from the city’s Historic Preservation Commission to not approve a needed Certificate of Appropriateness for the development, which has been proposed for a site just east of the city’s downtown area.
The plaintiffs, 361 Westminster LLC and 705 N. McKinley Development LLC, which are operated by developers Todd Altounian and Peter Witmer, are suing the city for breach of contract, administrative review and other relief, according to the lawsuit.
They claim they entered into an agreement in October 2018 to purchase the property at 361 E. Westminster Avenue from the city for $500,000 and have met the city’s standards for development, according to the lawsuit.
“We have alleged the city has breached the contract and we are entitled to damages,” said Bob O’ Donnell, attorney for the plaintiffs.
Mayor George Pandaleon and city attorney Julie Tappendorf declined to comment on the lawsuit, stating they could not discuss pending litigation.
The development at the center of the lawsuit would have been the third phase of a project where the City Council had approved the previous two phases and two buildings were constructed. Witmer and Altounian started in 2019 appearing before various city boards and commissions seeking approval for the third installment.
Witmer and Altounian proposed a two-story, approximately 24,000 square feet building that would reach as high as 33 feet, 6 inches. While city staff recommended the proposal and the City Council approved zoning for it, the plan required the approval of the Historic Preservation Commission because the building was proposed to be located in one of the city’s historic districts.
The HPC denied the certificate request at its July meeting, after residents offered a list of reasons for opposing the building, including building height, materials and plans for a rooftop patio area. Commissioners also voiced objections to the height and the building’s compatibility with neighbors, and said it didn’t complement surrounding structures.
The developers claim the project met all of the 17 applicable HPC standards and it was not appropriate for the commission to override the City Council’s land use decision regarding the zoning.
“Subsequently, after two years of working with plaintiffs to achieve these development goals, in an effort to appease vocal neighborhood opposition to the project, certain members of the City Council and HPC exercised their discretion arbitrarily and capriciously and in a manner inconsistent with the reasonable expectations of the parties, in order to deprive plaintiffs of the benefit they bargained for in the agreement,” the lawsuit reads.
The developers had unsuccessfully appealed the HPC ruling to the City Council, leading to the filing of the lawsuit.
In another count of the lawsuit, the developers claim HPC member Elizabeth Sperry violated the Open Meetings Act by attempting to change the minutes of the July HPC meeting. Sperry reportedly said the motion she made was not the one she intended to make and sent an email to Community Development Director Catherine Czerniak requesting the change.
According to the lawsuit, Czerniak declined Sperry’s request.
Sperry declined Pioneer Press’s request for comment, citing the pending litigation.
Also, the lawsuit names as defendants a series of people who spoke publicly about the project at various meetings. But O’ Donnell said that including them in the suit was a requirement of the administrative review law and the developers are not seeking damages from those individuals, which include many who live near the proposed site.
One person named in the lawsuit is Sally Downey, a member of the city’s Building Review Board.
She expressed frustration with the actions of Altounian and Witmer.
“For developers who live and work in this town, I can’t believe they are willing to sue their neighbors,” Downey told Pioneer Press. “The whole process is just dumbfounding.”
Also named is former Alderman Tom Swarthout, who spoke passionately in favor of the proposal.
“I think there is a sense of frustration not only in the building community but the community at large that we don’t see a need to progress to modern housing,” Swarthout told Pioneer Press. “We need a diversity of not only the housing stock, but also the people we want to attract and retain in Lake Forest. We are competing with other communities and Lake Forest needs to meet the challenges of changing demographics.”
While this latest battle is over a proposal for a residential development, Lake Forest has been in difficult situations in the past related to commercial development plans – which has been mentioned in the debate over the McKinley Road property. Owners of big box retailer Costco and Whole Foods grocery store sought to bring locations to the city, but plans never materialized.
A McDonald’s restaurant eventually opened on Waukegan Road in September 1997 after a messy legal battle, but the fast food giant closed the restaurant in 2017.
Daniel I. Dorfman is a freelancer.
