The parties embroiled in a long-term legal dispute over Skokie’s stalled downtown hotel project on Oakton Street may be willing to reduce or abandon their financial claims in an effort to move the development forward, Village officials confirmed on Monday.
Speaking on behalf of Skokie’s legal counsel, attorney Rodney Lewis informed trustees at the June 1 Board meeting that efforts to resolve litigation surrounding the deadlocked hotel construction has helped attract interest from multiple prospective developers.
“Really, 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,” Lewis told the Board at Monday’s meeting.
“The hold up, if you will, is just finding a developer who feels that the math works for them.”
Skokie’s Economic Vitality Manager Rodney Tonelli told trustees that since the Village has “identified this potential path out of the litigation,” officials have met with 13 potential developers who’ve expressed interest on the project, seven of whom the Village is “still having active conversations with.”
“Of those, three are going through some level of underwriting right now to see if they can make the math work,” Tonelli said. “Ultimately, it’s a math problem for the economics of the project.”
“We have everyone at the table,” Lewis added. “Our job is to keep them there.”
Construction initially stalled at the 4930 Oakton Street site in 2023 when general contractor Russell Construction sued the hotel’s developer, E&M Strategic Development, over allegedly failing to pay for costs associated with the project, which was poised to become a Homewood Suites by Hilton hotel.
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That same year, Skokie authorized the distribution of a 10-year $4.5 million loan from its Economic Development Fund to join as an “equity partner” to assist in the “financing shortfall that had arisen,” according to the Village of Skokie website.
The funds were never released, however, because additional funding was never obtained by the project’s developer. The Village’s loan remained contingent on all financial parties involved in the project obtaining “necessary financing,” according to officials.
Skokie has spent approximately $10.5 million in Tax Increment Financing (TIF) funding on the site to date, having previously agreed to provide up to $13.5 million to support property acquisition expenses, site preparation, the demolition of a vacant office building and the construction and redevelopment of the property, according to the project’s website.
In February 2025, the project’s lender, X-Caliber Capital, sued E&M Strategic Development, alleging that it defaulted on its construction loan amidst cost overruns. The partially-built downtown hotel has remained in foreclosure since.
An arbitration panel ruled in October 2025 that Russell Construction has priority over X-Caliber’s claim, setting the next litigation hearing for all lienholders involved in the dispute for this September. An arbitration date is scheduled for October, Lewis said.
According to Lewis, Skokie was initially named a co-defendant in the suit, but legal counsel was able to “convince the judge” to allow the Village to “monitor from the sidelines and not have to incur the cost of being actual litigants,” he said.
“We are trying to keep everyone at the table with the idea of coming to an agreement that will resolve the underlying litigation, such that a developer will be able to say, ‘here’s my cost of completion and here’s the cost of eradicating or remediating the litigation’…so they can move forward unencumbered,” Lewis said, adding that this progress is what has attracted potential developers.
“What the Village has helped [the parties involved] come to realize, is that there’s really not a benefit in continuing on in the litigation… it’s not going to translate into actual dollars while we just have a shell of a building sitting there,” Lewis said at the Monday Board meeting.
When probed by Skokie Mayor Ann Tennes about the continued structural integrity of the building, Economic Vitality Manager Tonelli said that the Village has consulted a third-party structural engineer to conduct an analysis of the site, who reported in October 2025 that the building was “still okay.”
“[They] identified things that over time have to be monitored that may have additional costs to preserve them, but at this point, the building, as it stands, is still in good shape,” Tonelli said.
There is another planned evaluation of the 4930 Oakton Street site before the winter season, he added.
“We’re all frustrated by this project,” Tennes voiced to Lewis and Tonelli.
“It’s an eyesore in the middle of our community. It’s a project that this Board largely inherited. [We’re] really grateful to staff for understanding our collective interest in making resolution of this matter a priority for the community, so thank you.”
Tennes added that the next scheduled update on the hotel site is planned for September.