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Council talks bonds, timetable for Evergreen purchase

Karen Sorensen | 1/6/2015, 10:52 p.m.
Holsten Property Management will help the city operate the 365-unit apartment complex, but any plan to tear the buildings down ...
Evergreen Terrace

Joliet will need to sell bonds to pay for Evergreen Terrace and won't have the ability to tear down the troubled apartment complex for at least two to three years, City Manager Jim Hock told the Joliet City Council Tuesday night.

Hock met with Holsten Property Management earlier in the day to begin discussing what needs to happen in anticipation of the city taking over ownership once a purchase price is either negotiated with the owners or determined via a trial that would take place in March.

Appraisals done for the city peg the property value at between $13 million and $14 million; an appraisal done for Evergreen owners put the price at $23 million.

The city won't be able sell bonds to generate the cash needed to complete the sale until the purchase price tag is fixed.

However, the city does have $3.2 million in hand from unspent Community Development and Block Grant money and expects another $500,000 this year, Hock said. The city also knows that rent money paid via federal housing vouchers adds up to about $4.5 million annually, he said.

Assuming the city does not spend more than $1 million a year in maintenance and another $1 million a year to repay the bonds, the remaining $2 million-plus generated by the complex on Broadway and Bluff streets at U.S. 30 will be put in the bank, Hock said.

When the city is able to secure tax credits for up to 80 percent of the property's value from the Illinois Housing Development Authority -- for which Joliet will not be eligible for at least two to three years -- it will then have enough money in hand to consider tearing down the complex, Hock said.

Until then, however, Holsten will serve as the property manager for the complex and will start working with residents to determine what they'd like to see done with the property.

"We don't have the staff and we don't have the expertise to be landlords," Hock said.

Council member Bob O'Dekirk questioned whether the anticipation of pocketing money from rent was painting too cheery a scenario for a housing complex that's become rundown and may have unexpected problems, such as asbestos. The city has not been allowed to do an assessment of the property by the owners.

Another concern -- the city's financial exposure should lawsuits be filed against the complex from accidents or other problems -- was raised by Councilman Larry Hug.

Regardless, Councilman Mike Turk said, the city's longtime goal of taking control of 356 blighted, crime-ridden apartment units and helping the people who live there has been achieved, and that should not be forgotten.

"We're much closer to giving the people who live there a much greater quality of life and the people who live around them a better quality of life," Turk said.

Contact Karen Sorensen at Karen@TheTimesWeekly.com.