Garden Hotel

The Garden Hotel at 200 Dearborn Ave. in South Beloit remains shuttered as a foreclosure lawsuit remains pending in Winnebago County Circuit Court.

SOUTH BELOIT—The legal dispute between the City of South Beloit and the owners of the shuttered Garden Hotel is slowly playing out in Winnebago County Circuit Court as the case continues, according to an attorney involved in the case.

Attorney Aaron Szeto said in an interview with the Beloit Daily News the foreclosure lawsuit on the keystone property at 200 Dearborn Ave. is continuing as expected.

Court records indicate both sides have been served copies of the complaint that alleges various issues on behalf of the hotel’s ownership collective, New Chapter Group, with a response from the defense disputing all points related to the foreclosure in the complaint.

Central to the lawsuit are the numerous liens placed on the property due to $40,611 for city maintenance of the property since 2019.

Szeto said both parties are currently going through the discovery process, a step in which both parties exchange witness and evidence that could be presented at trial.

“We’re moving through the process and that can take a while,” Szeto said. “It may take a while and certainly the COVID-19 situation does not help.”

Winnebago County treasury data shows New Chapter Group paid overdue property taxes on the site of $22,974 and $22,343 on Nov. 16, 2020 for 2019 taxes.

The hotel was condemned by the Winnebago County Health Department in September of 2019 and the property has been a hot spot for property crimes since its abrupt closure. South Beloit police have investigated multiple reports of break-ins at the property since December of 2019. To fix the issue, the South Beloit City Council initially approved $22,000 for fencing to be placed around the property before back pedaling after outcry from the public. Instead of fencing, the windows and entryways have been boarded up.

As the process moves forward, Szeto said the city is prepared for the issue to play out in court, but noted the best outcome would be reaching a settlement to get the property revitalized.

“We are hopeful that at a point some sort of settlement can be reached and hopefully that wouldn’t take years,” Szeto said.