Judge denies landlord Hunter Properties’ request to halt Hillcrest demolition amid new land spat

DeKALB – A DeKalb County judge on Friday denied a court request by landlord Hunter Hillcrest, an affiliate of Hunter Properties, to halt the city of DeKalb’s demolition of the Hillcrest Shopping Center amid a spat over a strip of land the former landlord says it still owns.

The city of DeKalb purchased the property at 1011 to 1027 Hillcrest Drive in DeKalb in September of 2021, closing on the deal after a settlement was reached between the city and the Evanston-based controversial landlord which formerly owned the space. The settlement was reached in April 2021 for several Hunter-owned properties to be sold amid years-long legal battles over hundreds of unresolved code violations attached to Hunter Properties.

Those legal troubles resurfaced this week.

Both parties claim ownership of a 5.8-foot-wide strip of land which was until days ago a retaining wall between the Hillcrest property and the empty lot where once sat movie theater Campus Cinemas at 1015 Blackhawk Road, which the city of DeKalb also owns. Demolition on the Hillcrest shopping center began May 10.

Earlier this month, the city of DeKalb began demolishing the shopping center, part of an ongoing plan to revamp the decrepit space, overhaul the site and put up for sale and redevelopment on the north side. The building was fully demolished a week ago, and in its place sits a lot full of large piles of rubble ready to be crushed and moved.

On Tuesday, Skokie-based lawyer Gary Ashman, representing Hunter Properties, filed a temporary restraining order demanding that city crews halt their demolition efforts and stop trespassing on the strip of land, which he said Hunter owns still.

On Thursday, city attorney Matthew Rose filed his own emergency temporary restraining order against Hunter, responding that the city owns all the land and has exclusive right to it.

DeKalb County Chief Judge Bradley Waller deliberated over the matter for two hours Friday morning, denying both restraining orders without prejudice. He said he believes more information is needed to determine how the parcel of land should be defined legally, and then deliberate on it’s rightful owner.

“It seems to the court that there is enough raised here to create an evidentiary issue that would necessitate hearing testimony,” Waller said. “I’m not comfortable ruling at this point in time as to the granting of one or the other of these temporary restraining orders. That’s not to say that my ruling today favors one side or the other.”

DeKalb City Manager Bill Nicklas said the city was pleased with Waller’s ruling.

“We know that there will be further discussion down the road so that this matter can be resolved with respect to the property title,” Nicklas said. “But we feel strongly that we’re acting in good faith and in the best interest of the hundreds of people who’ve been involved in trying to raise the property’s value to the neighborhood and the community.”

Rose will represent the city again at 2 p.m. on June 1 when the matter is expected to again go before Waller. The case also includes a complaint filed by Hunter Hillcrest against the city of DeKalb, alleging trespassing and wrongful seizure of property and demanding recourse, including the city pay Hunter Hillcrest’s legal fees.

“We appreciate the judge’s thoughtful consideration of the matter, and we believe that the truth and justice of our position will prevail,” Rose said.

Ashman said he hadn’t considered next steps. “Frankly, I didn’t think we would need it,” he said, adding that he believes the court will uphold that Hunter Hillcrest is the rightful owner of the strip of land.

The property management company was once the city’s largest landlord, operating nearly 1,000 units in the city. During its ownership of Hunter Hillcrest and others, including Lincoln Tower and Hunter Ridgebrook apartment complexes, Hunter Properties had accrued hundreds of unresolved city code violations for unkempt properties and security failures, according to DeKalb County court records. As part of the settlement agreement, Hunter was required to sell its main rental complexes in the city by 2023.

In December, the DeKalb City Council approved a $1 million incentive for Chicago developer Clear Investment Group LLC to buy more than 400 Hunter Properties rental units in the city, including Lincoln Tower, Hunter Tri-Frat and Hunter Ridgebrook.

City staff confirmed this week Clear Investment’s purchase was finalized, and Hunter Properties now owns around 500 units in DeKalb.

Property spat

During the hearing, Ashman said the city’s emergency request lacked merit and called into question the timing of it, since the purchase of Hunter Hillcrest shopping center was finalized in the fall and the question of the strip of land’s ownership surfaced this week.

“There’s nothing that the city isn’t doing today that it couldn’t have done nine months ago,” Ashman said. “Let’s not pretend that there’s any fraud here. That argument, respectfully, is itself fraudulent.”

Rose said the emergency restraining order response was needed because Hunter’s actions called into question the city’s ownership of the parcel, to which he said the city has right.

“The emergency is to prevent a fraud upon this court and public at large,” Rose said. “To not cloud or question the title, and to really preserve the status quo. And the status quo is that the city is enjoying exclusive possession of the strip. That has to be preserved.”

The landlord called the toll from the city’s actions “enormous” in the civil complaint, records show.

In the complaint documents, Hunter Properties argued the strip of land wasn’t included in the original sale of the Hunter Hillcrest Shopping Center, purchased by the city of DeKalb for $1.18 million in October 2021.

Hunter Hillcrest urged the court to order the city to cease and desist using the strip of land and to pay the landlord’s legal fees. Hunter Hillcrest also alleged the city’s actions were a breach of the settlement agreement, records show, and demanded the matter be placed before a jury.

City attorneys, however, argued that the sale did include the strip of land, and therefore the rightful owner is the DeKalb government. Rose said when the city signed the purchase and sale agreement last fall, the documents didn’t state a distinction between that land and the 5.8-foot adjacent strip. He argued the property deeds from the sale and property identification numbers used by the county to identify land for taxation purposes lists DeKalb as the owner show the city’s ownership is lawful.

“After the deed was conveyed, they stopped maintaining it, they can’t actually access it,” Rose said. “It makes no sense. ... And equitably speaking, we paid for it. We maintained the strip. We did the snow plowing, we did the trash removal, we have paid the property taxes.”

According to DeKalb County property records, all land listed from 1011 through 1027 West Hillcrest Drive is owned by the city of DeKalb.

Unrelated to the legal spat, demolition crews recently unearthed an additional concrete parking lot underneath the existing parking lot which city staff said was unknown before the work began. To mitigate that, staff requested the city council approve an additional $49,824 for the contractor, Northern Illinois Services Company, to remove that second lot. The DeKalb City Council is expected to vote on the matter Monday.