KIMBALL HILL HOMES - Storied Chicago Home Builder - Set to Liquidate!
CONTINUED-BLEAK HOUSING OUTLOOK SCARES OFF POTENTIAL INVESTOR!
Way back in 1952, a builder named Kimball Hill built his first small, three-bedroom, one-bath, on-a-crawl ranch home in an subdivision about 25 miles northwest of the City of Chicago. That then-remote patch of farmland became the Suburb of Rolling Meadows IL, as Hill named it. It is now a flourishing Chicago Suburb of over 23,000 people.
Today, in the midst of a housing downturn that has dropped the average sales price of the builder's homes 10% from a year ago, and losses exceeding $220 Million, the company has decided to give up its attempt to emerge from bankruptcy, and will liquidate.
The move comes on the heels of struggles by other noted homebuilders who got their start here in Chicago. Warrenville IL-based Neumann Homes, founded in the mid-1980's, filed BK in 2007, and are in the process of liquidating their assets.
Lakewood Homes, whose family built the Chicago Suburb of Hoffman Estates IL in 1956, recently returned developments in the Distant Chicago Suburbs of Newark, Plainfield, and Burlington IL back to the lender, rather than face foreclosure on these projects. Pasquinelli Homes, another 50-year-old venerable Chicago Area Builder, is facing foreclosure proceedings in its development in Far Northwest Suburban Hampshire IL.
According to Lakewood Homes President Buz Hoffman, builders like his own father, as well as Hill, "created these housing (developments) where you could put people into affordable homes. He made it possible for people to get on the (housing) ladder. And, until you're on the ladder, you can't start building equity."
Kimball Hill's business became his son's in 1969 - David Hill became his own home builder and named his company after his father. His mantra: to build "fine homes and remarkable communities," according to his widow, Diane.
Within two decades, Hill began to expand to other markets, starting with Houston TX in 1989. At one time, Kimball Hill was building homes in 9 states, and 17 metro markets. His objective was to insulate the company from housing fluctuations in any one market. Today, however, with new home construction tumbling in metro markets across the U.S., the company became vulnerable.
Diane Hill said her husband foresaw housing troubles. He left the Cleveland OH market two years ago as he saw that market beginning to decline.
In what has since turned to be an accurate prediction of today's market downturn, especially for builders of new home, Hill said in a Quarterly Earnings Report, "We anticipate that the changing marketplace will be amplified in the coastal markets, and that some of the recently-hot markets will give back a portion of their recent gains."
To attempt to stem the flow of red ink and generate cash, Kimball Hill sold $59 Million of undeveloped land last year. They attempted workouts with their lenders, but now feel further payback is not tenable.
Kimball Hill filed for Chapter 11 Bankruptcy Protection last April. Until last week, the company thought it had a very slim chance to be saved, but an unnamed investor walked away from a possible purchase, predicting housing markets, especially in the State of Texas, where the builder still operated, were a long way from turning around.
As a result, Kimball Hill Homes will join several other builders in disappearing from the home building industry, here in Chicago, and elsewhere.
For more detail, please read Mary Ellen Podmolik's story in last Sunday's edition of The Chicago Tribune.
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