Skokie officials have confirmed that parties involved in the stalled downtown hotel project on Oakton Street may reduce or abandon their financial claims to advance development. Attorney Rodney Lewis, representing Skokie’s legal counsel, addressed trustees at the June 1 Board meeting. He reported that efforts to settle the litigation have drawn interest from several developers.
Lewis stated, “We have firm commitments from everyone involved that they’re willing to either discount their claims or walk away from their claims to make this happen.” The main challenge is finding a developer who deems the financials feasible.
Economic Vitality Manager Rodney Tonelli informed trustees that since identifying a potential resolution to the litigation, officials have met with 13 developers interested in the project. Seven developers remain in active discussions, with three undergoing underwriting to assess feasibility.
“Ultimately, it’s a math problem for the economics of the project,” Tonelli remarked. “Our job is to keep them at the table.” Lewis reiterated this sentiment, emphasizing the importance of maintaining dialogue towards an agreement.
The legal dispute began when construction at the site halted in 2023, as contractor Russell Construction sued developer E&M Strategic Development over unpaid costs, initially intended to establish a Homewood Suites by Hilton hotel. Skokie had previously authorized a $4.5 million loan from its Economic Development Fund as an equity partner to address financing shortages.
The funds were contingent on obtaining additional financing, which never took place. Skokie invested approximately $10.5 million from Tax Increment Financing (TIF) funds, aimed at supporting property expenses and development.
In 2025, lender X-Caliber Capital sued E&M Strategic Development for defaulting on a construction loan amid cost overruns, leading to foreclosure. An arbitration hearing in October 2025 prioritized Russell Construction’s claims over X-Caliber’s. The next hearing for lienholders in the dispute is set for September. Skokie’s legal team successfully convinced the judge to allow the Village to monitor the proceedings without incurring litigation costs.
Lewis conveyed that the goal is to resolve litigation, enabling developers to assess completion costs and litigation remediation. This progress has attracted interest from potential developers.
“What the Village has helped [the parties involved] come to realize is that continuing the litigation offers no beneficial gain—it doesn’t result in real dollars while we have a shell of a building,” Lewis stated at the Board meeting.
When questioned by Mayor Ann Tennes on the building’s condition, Tonelli reported assessments by a third-party structural engineer in October 2025 concluded the building is structurally sound. The building requires monitoring and potential improvement costs but remains in good shape. Another evaluation is scheduled before winter.
Mayor Tennes expressed frustration about the stalled project, calling it an eyesore and indicating the Board has inherited the issue. Tennes voiced appreciation for staff prioritizing resolution efforts for community benefit. The next update on the hotel site is planned for September.