Keystone Montessori saved from foreclosure

Battle with village over property tax continues

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By Maria Maxham

Staff Reporter

Keystone Montessori School was saved from imminent foreclosure when an anonymous benefactor bought the school's mortgage bonds at the end of November. The school, which has stood at 7415 W. North Ave. in River Forest's commercial corridor since 1994, has been fighting against the village for years over the issue of property taxes, taxes they claim are illegal and have resulted in financial hardship for them.

In June of 2018, a Texas-based company called ECapital Management bought the school's mortgage bonds, which were already in foreclosure. However, ECapital soon learned that, according to Keystone, the school had fallen behind on real estate taxes that were imposed on them by the village of River Forest. 

As a result, ECapital agreed to discuss a settlement. An anonymous supporter of the school stepped in and purchased the school's mortgage bonds. This person then dropped the foreclosure lawsuit against Keystone.

However, though foreclosure is not on the line at this point, ongoing disagreements and a bitter legal battle with the village continue. In March of 2018, Keystone sued the village in Cook County Circuit Court, claiming that the school's original zoning approval, which they accepted at the time, included the agreement that the school would never seek a property tax exemption. Illinois tax code, however, states that "all property of schools, not sold or leased or otherwise used with a view to profit, is exempt" from property taxes.

The lawsuit claimed that the original agreement regarding property taxes was unconstitutional and illegal. Keystone Montessori asked for reimbursement for attorneys' fees, an end to the original agreement with the village, and $1.1 million in property taxes they say they should never have paid.

In December of 2018, the Illinois Department of Revenue granted Keystone a property tax exemption, but the village appealed that ruling. On April 2, Keystone was officially granted tax exempt status. The school sued to recover taxes it had paid over the last three years, the maximum allowable refund the Cook County Assessor will allow.

However, the school alleged that after years of paying property taxes they shouldn't have had to pay, they were suffering financial difficulties, resulting in a near foreclosure until the anonymous supporter stepped in to help.

The village, however, has claimed since the beginning that their original agreement with Keystone was valid and necessary. In April, in a statement to Wednesday Journal, the village explained their stance.

"Keystone Montessori operates on a valuable piece of property in our commercial corridor that would otherwise be taxable and provide property tax relief to our residents," read the statement. "It is unfortunate that Keystone Montessori has chosen to fight the village instead of working together in earnest to find a way to relocate to an appropriate location where Keystone Montessori can continue to educate."

On Dec. 10, in a statement related to the recent purchase of the school's mortgage bonds, Village President Cathy Adduci reiterated this sentiment.

"Keystone Montessori entered into a property tax agreement with the village of River Forest more than 20 years ago and followed it for decades," said Adduci. "When its business faltered, Keystone Montessori chose to fight the village instead of working together in good faith to find a way to relocate to an appropriate location where they could continue to educate. The potential dismissal of the foreclosure case does not change the village's position that the property tax agreement is enforceable against Keystone Montessori and that they should be paying property taxes. The village will continue to protect taxpayers' interests and has appealed the court decision on the property tax agreement, and the village will continue to contest Keystone Montessori's request for a property tax exemption." 

Keystone said they have always maintained that it would change locations if an appropriate building became available.

Note: The article has been changed to reflect Cathy Aducci's statement, which Wednesday Journal misquoted. It originally read "When its business failed..." but the actual statement made by Aducci was "When its business faltered..."

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Reader Comments

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Michael Nevins  

Posted: December 15th, 2019 4:50 PM

St. Edmunds' on OP Ave and St. Lukes' on Lake St. are also on "valuable" land in OP & RF - should they be expected to pay property taxes? How about the Calvary, Unity Temple and Grace Episcopal churches on Lake St. in OP - especially Unity? Aren't they located in places where more high-rises can be placed? Am I reading and understanding the position of Ms. Adduci/RF Board correctly?

Gregg Kuenster from River Forest  

Posted: December 13th, 2019 7:17 PM

Schools and Churches Exempt from Property Tax The Illinois tax code states that "all property of schools, not sold or leased or otherwise used with a view to profit, is exempt" from property taxes. Hmmmm? Does anyone care?

Gregg Kuenster from River Forest  

Posted: December 12th, 2019 4:18 PM

River Forest cannot make up State Law. RF does not have the right to ask Keystone Montessori to enter into a property tax agreement. The State of Illinois has laws applying property tax. Why would RF want to do this? Do we want to discourage private schools and churches because they do not pay tax? Is this why RF sued Saint Vincent Ferrer Catholic School two years ago because of a change in interior window trim molding. For example, a city cannot enforce an agreement where someone agrees to work for less than the minimum wage ? even if the person worked for less for 20 years. Keystone Montessori is a not for profit. That is a fact If Keystone signs a contract saying we will pay taxes as if we are for profit, the contract is not binding because it is not legal. The world needs children. We should be encouraging all that provide for children. Attacking schools and churches is just not right.

Gregg Kuenster from CPA 40 years River Forest  

Posted: December 12th, 2019 1:02 PM

RF forced Keystone Montessori into foreclosure. Both RF and the school spent legal fees between 150K and 300K each on a ZONING CASE. These expenses are not normal. Additionally RF spent tens of thousands on in house administrative fees to force the school out of town. My family has lived in RF 100 years. In my opinion, this is evil. RF appears to want the land to build a high-rise in the TIF district. The benefiters of RF are the underfunded RF employees salary, health and pension benefits. The benefiters of Keystone Montessori are the present and future children of the school. I cannot believe this is happening. God forgive us and pray for us all. Black sooty coal in RF Boards Christmas stocking. Keystone Montessori was forced into foreclosure by RF.

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