Progress in Skokie’s Stalled Hotel Project Dispute

Parties involved in a prolonged legal battle over Skokie’s halted downtown hotel project on Oakton Street are considering reducing or abandoning their financial claims to advance the development, village officials said Monday. Rodney Lewis, representing Skokie’s legal team, informed trustees during the June 1 Board meeting that steps to settle the litigation have attracted multiple prospective developers.

“We have firm commitments from all involved parties to either discount or walk away from their claims to make this happen,” Lewis told the Board. “The delay now is finding a developer for whom the financials make sense.” Skokie’s Economic Vitality Manager, Rodney Tonelli, reported that since identifying a potential resolution to the litigation, officials have engaged with 13 interested developers, actively conversing with seven of them.

“Three of these developers are currently undergoing underwriting to determine if they can make the finances work,” Tonelli noted. “Ultimately, it’s about the project’s economic feasibility.” Lewis added, “Our job is to keep everyone engaged.”

Rodney Lewis, speaking for Skokie’s legal team, provided an update during the June 1 Village Board meeting on the stalled hotel development at 4930 Oakton Street, Skokie, June 1, 2026. (Claire Murphy/Pioneer Press)

Construction at the site initially halted in 2023 when general contractor Russell Construction sued the developer, E&M Strategic Development, over unpaid project costs. The development was set to be a Homewood Suites by Hilton. In the same year, Skokie approved a 10-year, $4.5 million loan from its Economic Development Fund to become an “equity partner” and address the “financing shortfall” as per the Village of Skokie’s website. However, the funds were never disbursed as additional financing was not secured by the project’s developer. The Village’s loan hinged on all involved financial parties securing “necessary financing,” officials said.

To date, Skokie has invested about $10.5 million in Tax Increment Financing (TIF) at the site, with an upfront commitment of up to $13.5 million for property acquisition, site prep, demolition of a vacant office building, and new construction, according to the project’s website. In February 2025, lender X-Caliber Capital sued E&M Strategic Development, claiming default on its construction loan amid cost overruns. The partly built hotel remains in foreclosure.

An arbitration panel determined in October 2025 that Russell Construction has precedence over X-Caliber’s claim, with the next litigation hearing scheduled for September for all lienholders. An arbitration date is also set for October, Lewis said.

Initially, Skokie was a co-defendant in the suit. However, legal counsel persuaded the judge to allow the Village to maintain a non-litigant status, Lewis mentioned. “We aim to have everyone agree to resolve the litigation, enabling a developer to move forward unimpeded,” Lewis noted. This progress has attracted developer interest. “The parties now see the lack of advantage in pursuing litigation without financial benefit while the construction site languishes,” Lewis told the Board.

When Skokie Mayor Ann Tennes questioned the building’s structural integrity, Economic Vitality Manager Tonelli confirmed consultation with a third-party structural engineer. The engineer’s October 2025 analysis found the building to be “still okay,” although ongoing monitoring may be needed to preserve it.

A further review is planned before winter, Tonelli added. “We’re all frustrated by this project,” Tennes expressed to Lewis and Tonelli. “It’s an eyesore in our community, and most of this Board inherited the problem. We’re grateful to the staff for prioritizing resolution for the community.” Scheduled updates are expected by September.