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Original property owner files lawsuit over ecotourism resort in Spring Bay

Sankoty Lakes resort
Mike Rundle
WCBU file
Located along Route 26 just south of Spring Bay, the Sankoty Lakes resort boasts three lakes, a trout stream, and glamping tents along with a full-service on-site restaurant.

The original owners of the property that became the Sankoty Lakes resort have filed a lawsuit against noted Peoria developer Kim Blickenstaff, alleging their partnership was spoiled by fraud and breach of contract.

The lawsuit filed in Woodford County court centers around the 220-acre ecotourism resort that opened in early 2021. Located along Route 26 just south of Spring Bay, the resort boasts three lakes, a trout stream, and glamping tents along with a full-service on-site restaurant.

Blickenstaff announced plans to overhaul the property in 2019, and construction began soon after to transform the land from a gravel pit to a polished, Midwestern retreat.

Dwayne and Patty Atherton were the original owners of the property that became Sankoty Lakes. They filed the lawsuit Oct. 17, detailing Dwayne Atherton’s account of a partnership with Blickenstaff and Greg Birkland, the president and CEO of Blickenstaff’s Peoria-based KDB Group, in which Atherton was offered a one-third stake in the Sankoty Lakes business in exchange for planning and construction services for the resort.

According to the lawsuit, Atherton worked for three months without pay prior to receiving a minimal wage with the understanding he would be included as a partner upon project completion. The lawsuit states that he was later fired by Birkland when construction on the resort was completed, and that Birkland and Blickenstaff have denied any partnership with Atherton. Atherton claims he suffered “significant financial losses” as a result.

In addition to the allegations of fraud, the Athertons also accuse Blickenstaff and Sankoty Lakes Resort of trespassing and negligence resulting in damage to the Athertons’ property adjacent to the resort. The impacts on the property allegedly include ground and water contamination via “petroleum products” leaking from an improperly stored barge, and increased erosion due to water being pumped from the Sankoty property onto the Athertons’ property.

The lawsuit also references a plan in which laborers assisting with construction were paid in cash “for the purpose of avoiding potential workers compensation liability.” The lawsuit outlines an alleged procedure in which Birkland would pay Herman Brothers Pond Management an amount equal to the laborers’ wages, then Herman Brothers would pay Atherton. He would then cash the check, and pay the laborers.

Herman Brothers Pond Management operates Giant Goose Ranch in Canton, and was hired by Blickenstaff to oversee the construction of Sankoty Lakes Resort.

Birkland provided the following statement regarding the lawsuit:

“We have recently received a copy of a complaint filed against Sankoty Lakes, and related entities. It is unfortunate that the plaintiffs in the lawsuit decided to handle their dispute in this manner; however, Sankoty Lakes looks forward to engaging in the legal process to show that plaintiff's allegations set forth in the complaint are not actionable. We will allow the legal process to take its course, and have no further comment at this time. Sankoty Lakes continues to be the Midwest draw for families near and far to make lifelong memories in Spring Bay, much as Kim Blickenstaff and his family did. He remains devoted to Sankoty Lakes, the employees, and guests. Sankoty Lakes will continue to serve the community as a great adventure retreat.”

Sankoty Lakes Resort is now operated by Seattle-based company Columbia Hospitality.

Patty Atherton declined to comment Tuesday, citing advice from their attorney.

The Athertons are seeking a jury trial and damages for a total of six counts.

Mike Rundle is a correspondent at WCBU. He joined the station in 2020.