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City moves ahead with Evergreen Terrace purchase

August 20, 2015

 

The Joliet City Council voted Aug. 18 to authorize the city’s purchase of Evergreen Terrace, with the long-awaited decision falling one vote shy of being unanimous.

 

The council’s vote to submit $15 million to the U.S. District Court for the Northern District of Illinois comes in part because of a court-mandated order that calls for payment by Sept. 1.

 

Councilman Larry Hug was outvoted 7-1, with council members John Gerl, Bettye Gavin, Jim McFarland, Terry Morris, Pat Mudron, Mike Turk and Jan Quillman voting in favor of the acquisition.

 

Controversy surrounding quality of life at Evergreen Terrace and a subsequent housing discrimination and False Claims Act lawsuit go back as early as 2005.

 

McFarland said the issue should have been resolved in five years.

 

“This has been 10 years of living hell for the residents there,” he said, adding that the goal is to make sure they are not adversely affected.

 

He said Evergreen Terrace has been a “drain” on the city’s budget and the decision to vote ‘yes’ reaffirms the council’s commitment to serving the needs of the community.

 

McFarland and six other council members agreed that using eminent domain to acquire the property is necessary, saying it helps the residents of Evergreen Terrace to attain a living space that is not riddled by blighted conditions, crime and sanitary issues, among other hazards.

 

Motions for closed session to address new developments in the Evergreen Terrace case were passed during a pre-council meeting Aug. 17 and at the following evening’s city council meeting.

 

City Manager Hock said the Department of Housing and Urban Development issued a series of requirements, which could take between two and three months to complete, in order to take possession of the property. He added that Holsten would then be allowed to assume a managerial role at Evergreen Terrace.

 

Mayor O’DeKirk also spoke with HUD to address the future of Evergreen Terrace but the response he received was less certain.

 

O’DeKirk said HUD gave the city a 64-item checklist, adding that they are aiming to block the transfer of subsidized housing vouchers and use the appeal process to stop Joliet from taking possession of Evergreen Terrace.

 

City officials said HUD insisted upon having a 1-1 replacement of subsidized housing units in order to use Community Development Block Grants.

 

O’DeKirk said even if the city used its own money they wouldn’t be authorized to assume control over the property in the event that HUD seeks to appeal the decision from their lawsuit.

 

“We have an issue with the fact we’re giving $15 million and we’re not going to receive any income that’s coming from the property,” O’Dekirk said.

 

Hug said a number of unanswered questions regarding the property compelled him to vote against the acquisition.

 

“This is not an emergency,” he said prior to the vote, adding that taxpayers would be taking on a significant financial burden. He also said the decision would put limits on the city’s ability to address other issues in the community.

 

As the only council member opposed to the plan, Hug said he sees a number of reasons to be skeptical, some of which he would not disclose because the details were discussed in an executive session. 

 

In an Aug. 20 interview with The Bugle, City Manager James Hock refuted the concerns Hug shared. He said the city wouldn’t struggle to balance or meet the projected costs associated with the acquisition and only use General Fund monies.

 

He added that Holsten Real Estate, the management company that would oversee Evergreen Terrace once redeveloped, predicts the venture would allow a recuperation of all funds over time.

 

Hock said once the appeal process regarding the city’s 2013 housing discrimination lawsuit against HUD is over, the city would immediately issue a bond after the appeal process is over or allow the limited liability company formed between Joliet and Holsten to pay them back over time.

 

Hock said the city would petition the court and is certain they would be able to allow Holsten to manage the property. If they assume that role, he added that it would be in Holsten’s best interests noting they would make the most money through redevelopment fees.

 

While it’s not certain whether HUD will use the appeal process at this time, the city said they’re confident they would win the appeal and take possession of the property.

Burnham Management Company, the organization currently overseeing Evergreen Terrace, said it was not pleased with the city’s decision.

 

“We are nevertheless disappointed the Joliet City Council voted to move forward with its purchase of Evergreen Terrace,” according to a statement released by Burnham Management Company, the organization currently overseeing Evergreen Terrace. “We will continue to provide the housing and resources our residents and their families need to build successful lives.” 

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