Carvana No Longer Has Permission To Build Skokie Tower, Officials Say

SKOKIE, IL — Fresh off receiving permission from state regulators to again sell cars in Illinois, online used car dealer Carvana no longer has permission to build a controversial tower between the Harms Woods forest preserve and the Edens Expressway, according to village officials.

Johanna Nyden, Skokie's community development director, notified company officials the ordinance that had authorized them to develop the site they purchased last year has expired, and the approval process would have to start from scratch.

"A use with a special use permit that ceases to operate for a period of 6 months is automatically null and void and of no further force or effect," Nyden said, using the same language as Sec. 118-10 of Skokie Village Code.

The Skokie Village Board approved an ordinance granting Carvana permission to build a 14-story illuminated glass tower on a 5-acre site on Woods Drive in February 2022.

The proposal faced pushback from nearby residents, bird advocates and others. Dozens of people came out to board meetings to speak against the project, hundreds sent emails and letters and more than 1,000 village residents were among the nearly 5,000 signatures on a petition submitted to staff.

Skokie resident and U.S. Environmental Protection Agency Regional Administrator Deb Shore, writing in her personal capacity, was among those who urged trustees to reject the tower.

"[I]t is aesthetically a blight on the landscape, more fitting for the Las Vegas strip than off a quiet drive abutting Harms Woods Forest Preserve," Shore said in a letter ahead of the vote, describing the proposal as "equivalent to an illegal billboard along the Edens Expressway."

---

Ultimately, Mayor George Van Dusen and all but one of six village trustees voted in favor of the plan to amend the village's zoning code to allow car dealerships in the "Office Research" district and grant site plan approval for the construction of a 134-foot parking lot tower.

Carvana officials describe their parking lot towers as "car vending machines." They serve as pickup locations for cars purchased online for people who opt against home delivery.

Property records show Carvana paid $6.75 million for the 9801 Woods Drive property in March 2022.

The same month as the company received permission to build the tower, Illinois Secretary of State police opened an investigation into its business practice in response to nearly 100 signed complaints. The probe led to a May 2022 order suspending its license to sell cars in Illinois.

In response, Skokie village attorney Michael Lorge notified Carvana officials that the building department would take no actions until its issues with state regulators are resolved.

"[W]e instruct that you do not proceed with any work on the site," Lorge said, "and that you make no further submissions or have any further contact with the Village of Skokie Building Department until such time as I inform you that you may contact the Department again."

Last week, the Arizona-based company resolved pending allegations with recently inaugurated Illinois Secretary of State Alexi Giannoulias in a deal where the company admitted wrongdoing and surrendered a $250,000 cash bond.

Carvana's chief lawyer, Paul Breaux, conceded the company failed to transfer titles to customers within 20 days of the sale, as state law requires, according to the 5-page settlement obtained by Patch following a public records request.

In a statement last week, company officials said the settlement "allows us to move forward in our journey to becoming the largest automotive retailer." Giannoulias emphasized his office retained the ability to revoke the company's license to operate should it again violate state law.

The Skokie community development director's letter to Carvana company officials is dated Wednesday — one day after the firm entered into the agreement with the secretary of state's office.

"Since a period longer than 6 months has lapsed with none of this activity undertaken, the site plan approval ordinance has become invalid and will be repealed," Nyden told Carvana project manager Brett Hanlon and vice president Bret Sassenberg. "A new request for site plan approval will be required at this time [for] the process to start anew."

This time, in order for Carvana to get approval for the tower, it must comply with changes to the village's building code, including an ordinance granted final approval on Jan. 17 that requires new buildings and major facade renovations to comply with bird strike mitigation requirements.

Single-family homes, townhomes and residential buildings less than four stories tall are exempt from the guidelines, which may be amended from time to time by village staff.

"In addition," Nyden said, "other Village Departments may have considerations with the project development including an assessment and demonstration of financial viability to perform and maintain the site."

Carvana has never reported a profit in its time as a publicly traded company, with company officials reporting a loss of nearly $1.5 billion during the first three quarters of last year. It is set to release its fourth quarter results next month.

Its tower in Denver has been empty for months and analysts suggest it may wind up filing for bankruptcy, according to the New York Times. Company officials told the paper Carvana had $2 billion in cash and $2 billion in "other liquidity" as of the end of the third quarter.

Since falling from a record high of more than $370 in August 2021 to an all-time low of $3.55 earlier this month, Carvana's stock has more than doubled, though investors are betting the rally is temporary.

Data shows the company has the highest short interest of major companies, Bloomberg reported, comparing its rise to the "meme-stock mania of 2021."

No information was available Monday from a Carvana spokesperson in response to questions posed by Patch about company leaders' plans for their Skokie property.

Breux, the company's general counsel, is facing criminal charges in DuPage County, including 27 counts of failure to transfer vehicle titles by a dealership and 50 counts of improper use of titling and registration. Records show he is due back in court on Feb. 21.

Related:

• Carvana Settles With Illinois Secretary Of State, Admits Wrongdoing
• Carvana Again Suspended From Selling Cars In Illinois
• Skokie Carvana Tower On Hold After Suspension Of Illinois License
• Critics Cry Fowl As Skokie Trustees Welcome Carvana Tower