Homeowners wait and wonder while development sits idle

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Stacy Vogel
Sunday, April 6, 2008
— Mandy and Eric Wille still are putting the finishing touches on their new home on the north side of Janesville.

They painted their son’s room on a recent Saturday afternoon. Out the window, the sun glistened on a huge, muddy patch of land sprinkled with puddles and small ponds.

The Willes, 3489 Samson Drive, and their neighbors have no idea what will happen to that land now that Kennedy Homes appears to be in financial trouble.

The Ridges of Rock County project from South Barrington, Ill., developer Kennedy Homes was supposed to create up to 900 new homes on Highway 26 between Janesville and Milton. The developer planned to build about 100 homes a year.

Work seemed to be going slower than expected—by the end of 2007, a year and a half after Janesville approved the project, the developer had built only 12 homes, including four models.

But the Willes didn’t realize anything was seriously wrong until February, when they received a letter from the subcontractor that did drywall and painting for their home. The letter said the company hadn’t been paid for its work and demanded $2,500.

“We never had a contract with the contractors,” Mandy said. “We had a contract with Kennedy Homes.”

Other neighbors received similar letters, the Willes said.

Kennedy Homes laid off 60 percent of its staff—20 employees—in February, according to news reports. On March 4, it filed suit with its lender, claiming the bank gave Kennedy too much credit and then abruptly called in the loans, causing the development company to become insolvent.

Ridges residents said they’re frustrated with the lack of communication from the company.

Kennedy used to have an extensive Web site, said Brian Osburne, 3453 Samson Drive. Today, a visit to the site shows a white screen with the message, “Web site currently under construction.”

“They’re not telling anyone anything,” Osburne said.

Osburne worries the company won’t honor the warranty on his home. He recently contacted Kennedy about a crack in his kitchen wall and received a letter saying the crack isn’t covered in his warranty.

“They never even came out and looked at it,” he said.

Kennedy Homes intends to honor its warranties, said Richard Bates, manager of land acquisition and sales, but he made no guarantees.

“It is certainly our intent to honor them, but again everything, and I do mean everything, is fluid right now,” he said.

The company has put the Ridges project “on the shelf” for now and isn’t sure if it will return to the project in the future, he said.

Kennedy has refunded money to people who bought a home in Ridges but decided they no longer want to proceed, Bates said. He didn’t know if the company had committed to any other homes in Ridges that haven’t been built, he said.

“It is our goal to complete every home that has been sold and committed,” he said.

The Ridges neighborhood has banded together in recent weeks. Residents have held a neighborhood meeting and keep each other informed about what they hear.

Several neighbors said they were happy with their home and the developer until the trouble began, but now they worry Kennedy will abandon them. Residents pay $300 a year for a homeowners association to maintain green space in the neighborhood, and now they wonder just who will be doing the maintaining, Osburne said.

Mandy and Eric are worried the huge puddles in the undeveloped land will be left for mosquitoes to breed in this summer, they said.

The Willes aren’t too worried about the letter they received from the subcontractor. Their title insurance will take care of it, they said. But they do wonder if they’ll be receiving any more letters.

“A lot of us are just frustrated because Kennedy doesn’t tell us anything,” Mandy said. “We have to read about it in the papers.”

Bates said he understands homeowners’ frustration, but the company has nothing to report. Once Kennedy Homes knows how it will proceed, it will let homeowners know, he said.

“The situation is a fluid situation, and the only thing that I can tell you is we’re still in ongoing discussions with lenders,” he said.

Last updated: 9:00 pm Thursday, December 13, 2012

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