JOLIET – The Joliet City Council this week is set again to discuss the merits and pitfalls of spending $15 million to buy the Evergreen Terrace low-income housing complex.
The Housing Authority of Joliet is scheduled to make a presentation Tuesday on whether it can get involved in the project. It’s not clear yet when the council will make a decision.
Here is a summary of major issues explored so far.
$15 million deadline
City officials have said they must have a check for $15 million in federal court by Sept. 1 if they are going to buy Evergreen Terrace.
That money would come out of city reserve funds, with a plan to pay it back still to be decided.
But City Manager Jim Hock has said the city could offset part of that payment with $3.6 million in Community Development Block Grant money from the federal government. That money otherwise could be spent throughout the city.
Holsten Real Estate Development & Management Corp., the likely manager of the property if the city buys it, has presented plans that budgeted repayment of the $15 million from Evergreen Terrace revenues.
If the City Council decides not buy, it can expect to pay $7 million to cover legal bills paid by Evergreen Terrace owners, Hock told the council last week.
Walking away from the property after gaining ownership in court would be considered abandonment at this point, Hock said. The federal judge who has presided over the case since the city initiated the suit in 2005 could impose penalties, he added.
Not so fast
Even if the city sends the check, the takeover could be stalled.
Evergreen Terrace owners have filed notice they will appeal the case, which could take 18 months to two years, according to estimates.
If Joliet does gain ownership while the appeal is pending, the city expects to be caretakers, managing the property but not spending money on redevelopment, just in case another court gives Evergreen Terrace back to current ownership.
Holsten has presented four plans on what to do with Evergreen Terrace:
• spend between $60 and $70 million in a “deluxe” rehab that includes adding four floors to three main buildings with glass exteriors, making apartments larger while reducing the total number of units to 302, and tearing down smaller buildings to build townhouses;
• spend between $11 and $24 million on a more modest rehab that reduces the number of units to 322;
• keep the 356 apartments intact, spend no money on redevelopment, and collect $1.2 million in annual revenue;
• demolish buildings and reduce the number of apartments to 117 at a cost of $11 million.
All spending projections are based on the assumption that the city will get government-issued tax credits and other incentives that attract private investors. Without those incentives coming through, the city’s costs would be between $44 million and $140 million in the three plans that include redevelopment.
Holsten’s redevelopment plans did not include a community building the city agreed to build and operate when it made a settlement with the federal government, which at one time was a defendant in the case. Holsten representatives at a council meeting last week estimated the building could cost $2.5 million to build and $300,000 a year to run.