News - Joliet and Will County

Evergreen Terrace: It’s complicated

Many ifs, buts and options in Joliet’s plan to take over housing complex

JOLIET – Getting a handle on the Joliet City Council’s sparring over Evergreen Terrace condemnation is a bit like navigating the Titanic around an iceberg: You can see something big coming up on the horizon, but there’s a lot more going on under the surface.

If Joliet gets control of Evergreen Terrace, the city could tear down all public housing on the site in the 300 block of Broadway Street. But Joliet would have to build or buy alternative housing for residents of 115 of the apartments and help those in the other 241 find housing elsewhere with subsidized rent via Section 8 vouchers.

Mayor Tom Giarrante and council members Mike Turk and Jan Quillman appear adamant to stay the course, especially now that the city is so close to a possible victory in the case.

Giarrante, who was a councilman when the city decided in 2005 to begin condemnation proceedings against Evergreen Terrace, has long decried living conditions and crime problems at the apartments.

“I haven’t been there lately, but when I was on the fire department I was there a lot,” Giarrante told the council at its March 4 session. “I’ve seen families living in one-bedroom apartments, and I am sure that hasn’t changed.”

Councilmen Larry Hug, Bob O’Dekirk and Jim McFarland have concerns about the mounting costs of the case and the apparent lack of planning about what the city will do if it wins the case.

“I think Joliet would be better off without Evergreen Terrace, and I think the council was right in 2005,” O’Dekirk said. “But it’s not 2005 anymore, it’s 2014. Times have changed and specifically the economics of this city have changed dramatically.”

The city has spent about $4.7 million on the case so far. Hug estimated costs could skyrocket to more than $30 million once appeals, demolition and replacement housing are figured in.

Councilmen Terry Morris and John Gerl want the city to take control of the complex, but want to hear more about how the project would be managed.

Condemnation trial

Before anything can happen, though, U.S. District Court Judge Charles Norgle must rule whether the case can proceed to condemnation. Norgle has given lawyers until the end of April to file summary briefs.

Once the summaries are filed, Norgle will rule if the case can proceed.

Two scenarios are possible:

• If the judge rules for proceeding, the case would go to a jury trial that would determine the value of the property. The owners would still have the right to appeal the ruling.

• If the judge rules against proceeding, the condemnation case would be over, though Joliet would have the opportunity to appeal. If the city ultimately loses the case, it would be liable for the owners’ court costs and lawyer fees, which are about $13 million.

If the case goes to a jury trial, a verdict could be expected as soon as May, City Attorney Jeff Plyman said. He did not think the trial would last more than a few days.

“There would be a couple of witnesses on each side. I don’t think it will be any more complicated than that,” Plyman said. “It’s pretty cut and dried.”

Property valuation would be based on the 2012 value when the trial started.

Plyman noted that the U.S. Department of Housing and Urban Development appraised the property before the recession – “back when the market was going gang busters” – at about $10 million.

Tetzlaff Law Offices now represents the owners. Their previous lawyers, Ungaretti & Harris, withdrew from the case in January over unpaid legal bills and a lawsuit against the firm by the sister of principal owner Ronald Gidwitz.

Either side could appeal the jury’s valuation.

Many options

If the city wins the case, it would have a number of options of what it could do with the property, Plyman said.

At one extreme, it could take over part or all of the complex as a successor landlord, Plyman said. At the other, it could demolish all of the property and replace it with anything from mixed income housing to park land.

Under the HUD settlement, Joliet would have to build or buy alternative housing for residents of 115 of the apartments and help those in the other 241 find housing elsewhere with subsidized rent via Section 8 vouchers.

According to Plyman, funding for rents and vouchers would be available through HUD, while money for demolition and redevelopment into Section 8 housing would be available through Illinois Housing Development Authority tax credits. The IHDA program is the same one that the Housing Authority of Joliet is using to redevelop its Des Plaines Gardens low-income housing project.

While Giarrante has suggested that HAJ might be able to manage Evergreen Terrace for the city, Plyman said it’s more likely management would be handled by Holsten, a Chicago-based real estate development and management group that the city has hired as a consultant.

Looking for direction

Regardless of the options, O’Dekirk said his main concern the lack of a definitive plan.

“This is the third time I’ve asked for a plan,” O’Dekirk told the council March 4. “I want to see a specific plan, not platitudes or pie-in-the-sky ideas about federal funding.

“The numbers thrown around for Evergreen Terrace are staggering, and there’s never been any definitive plan about how we would pay for this, how we would finance this, or what return we would expect on the money.”

Besides Evergreen Terrace, one more iceberg looms large in the months to come: The 2015 mayoral and city council elections. O’Dekirk already has announced plans to challenge Giarrante. It remains to be seen whether the issue will carry over into the election.