JOLIET – A Joliet City Council committee Thursday approved tax incentives for a downtown developer who wants to improve units and raise rents at the Louis Joliet Apartments.
Most of the units at the building now have rent restrictions tied to the U.S. Housing and Urban Development loan that financed the conversion of the building to apartments in 2000.
Developers Mike Petry and Denis Malushi, who bought the building last year, told the Economic Development Committee that they will apply to HUD for relief on the rent restrictions and plan to convert all apartments to market rates eventually.
“We do not plan on kicking anybody out,” Malushi said. “That’s not our intention – to discontinue leases.”
Malushi said they plan to renovate apartments when people move out and then convert them to market rates.
The Economic Development Committee approved tax increment financing incentives for renovations but only for apartments that are priced at market rates, as well as for the building lobby and commercial areas.
The incentives are expected to go to the full City Council for a vote Tuesday.
The building now has 61 apartments, and rent restrictions are imposed on 49 of them.
Petry said he expects to get HUD approval for the conversion because the property needs higher rents to cover costs.
He said the goal is to “bring people downtown with the most money possible” so the tenants can patronize the restaurants and spend money at stores.
Petry said the building had a
25 percent vacancy rate when they took it over, but they expect it to be full by March.
“It’s our intention to get this building as high a caliber as possible so it’s ready for market rate,” he said.
Petry is developing other apartments downtown, including the Barber and 76 buildings on Chicago Street. He said there is a strong demand for downtown apartments at market rates.
The three apartments at the 76 Building were rented as soon as they were completed in September, he said. The Barber Building, which has
32 apartments, has not been completed.
The City Council in September approved a $400,000 grant along with a TIF package for the Barber and
TIFs allow developers to keep increased property taxes that come with building improvements to offset the cost of renovations.