JOLIET – Mayor Bob O’Dekirk last week warned that the city should expect a fight from the federal government before it can take over management of Evergreen Terrace.
“Unfortunately, we own an asset that we have no control over,” O’Dekirk told the Joliet City Council.
Joliet in late August paid $15 million for Evergreen Terrace after winning a 10-year condemnation case to take control of the low-income housing project from its private owners.
But the city is not getting any income off the property and won’t until it takes over management of the 356-apartment complex.
The city is in the process of going through steps required by the U.S. Department of Housing and Urban Development before it will consider letting Joliet take over management. In the meantime, the past private owners of the housing complex have appealed the case.
O’Dekirk said he met with HUD officials in Washington, D.C., earlier this month and was told they will not support a change in management unless Joliet wins the appeal.
“Essentially, they’re taking a hard line on Joliet,” O’Dekirk said. “They are not going to release the property to Joliet until the appeal is over.”
The appeal has been estimated to take anywhere from 18 months to two years.
City Manager Jim Hock said Joliet will go to HUD once it has its management team in place and seek its approval.
HUD issues Section 8 vouchers that pay the rent on the property, so the agency exerts strong control over Evergreen Terrace. Hock said HUD is reluctant to go through the process of switching Section 8 vouchers to the city in case current ownership wins back the property in court.
“They would just as soon keep paying the current owners until the appeal is over,” Hock said. “We could obviously appeal to the court that any profits made during the appeal come to the city.”
But Joliet could seek court approval to take control over the property while the appeal runs its course, Hock said.
Joliet is working with Holsten Real Estate Development and Management Corp. in creating a partnership that would own and manage Evergreen Terrace.
Hock said Joliet is negotiating a partnership agreement with Holsten and expects to be ready to seek HUD approval before the end of the year.