Rolling Meadows Review

Rolling Meadows Review (IL)
12 Oaks renters file lawsuit
TODD SHIELDS Staff Writer
Published: December 20, 2007
A lawsuit filed in Cook County aimed at a high-profile housing development project in Rolling Meadows contends more than 100 tenants should receive $70,000 in rental security deposits they never received.

The six-count lawsuit includes three class action allegations against Michael Sparks, owner of 12 Oaks of Woodfield since 2004. The sprawling 19-building, 692-unit apartment complex sits at the southwest corner of Algonquin Road and Route 53 on the 4700 block of Arbor Drive.

Since 2005, city officials have attempted to recruit development firms in rebuilding the 44-acre site into a multimillion dollar mixed-use condo project that would produce an estimated $60 million in tax revenues to Rolling Meadows during the first 20 years.

Because of the project's size and proximity to the proposed STAR Line Metra station in Schaumburg, as well as the Schaumburg Convention Center, 12 Oaks has often been a major topic of city officials.

Sparks said the lawsuit would not impact the eventual sale or development of his property, adding a manager was to blame for not paying interest to renters on their security deposits.

Mistake finally caught

"Interest on security deposits was less than $1 per renter, but it was six months before we caught the mistake and started paying it," he said.

According to the lawsuit, Sparks violated the Illinois Security Deposit Interest Act by his "willful failure or refusal to pay the interest due to Plaintiff's within 30 days of the end of Plaintiff's 12-month rental period."

The lawsuit names three former renters, stating they never received their security payments or interest.

May 2006 letter

The lawsuit also states two of the renters did not receive promised incentives.

Both men said they received letters on May 26, 2006, signed by Sparks explaining if they extended their leases, they would receive money based on how long they agreed to stay extra and $1,000 in moving expenses.

A potential buyer and developer, Dallas-based Centex Homes, terminated its dealings with Sparks and the city in August 2006, citing an unsteady housing market.

Yet Sparks' May 2006 letter cited in the lawsuit said the agreement to develop would happen.

"We are selling this property next year! The purchaser wants to tear these buildings down and rebuild condominiums and a shopping center. What does this mean to you! If you stay until you receive a 90-day notice next year, you will receive a cash bonus!" Sparks wrote.

"In addition you will be able to take your range, refrigerator, dishwasher and air conditioner at no cost to you. I believe we have put together a win-win program where everyone benefits."

Asked why he offered renters incentives to extend leases, Sparks said, "They were asked to stay on until the wrecking ball swung. Many times in real estate sales, things change off and on," he said.

On Nov. 27, the Rolling Meadows City Council approved a resolution to begin negotiations with Pine Tree Commercial Realty based in Northbrook for redevelopment of the site. The negotiations included creating a possible tax increment finance district to reimburse Pine Tree with public funds, scheduling planning and zoning hearings and reviewing a redevelopment agreement for a conceptual site plan.

Both Peter Borzak, a partner in Pine Tree, and Tom Melena, Rolling Meadows city manager, did not return requests for interviews on Monday.

Attorney's thought

Mark Silverman, an attorney in Rockford, who represents renters, said Sparks mislead people in his letter.

"Some people stated they relied on this letter and so continued on with 12 Oaks by paying rent," Silverman said.

Sparks described the class action lawsuit as "nebulous."

"That's what lawyers do -- sit around and dream up nebulous lawsuits such as this," he added.