HAJ proposes managing Evergreen Terrace for city

Karen Sorensen | 8/5/2015, 10:52 a.m.
The Housing Authority of Joliet presented a detailed plan to the Joliet City Council Tuesday that calls for far less ...
The Evergreen Terrace apartment complex is located on Joliet's near West Side, along the banks of the Des Plaines River. Photo by Karen Sorensen

The Housing Authority of Joliet made a pitch to the Joliet City Council Tuesday to become the manager of Evergreen Terrace and to oversee the apartment complex’s future redevelopment.

Their presentation countered the proposal made last week by Holsten Properties of Chicago, with whom the city has been discussing management and redevelopment plans once the development is owned by Joliet.

The council is expected to authorize the purchase of Evergreen at its Aug. 18 meeting, borrowing $15 million from the city’s budget reserve fund to pay for it. That expenditure and the $6 million expended in legal fees will be repaid with money already in hand from federal CDBG funds and other sources and from the sale of bonds, which will be repaid with rent money generated by the complex’s 356 units.

Per a federal judge’s order – the end result of a 12-year legal case to acquire the near West Side development through condemnation -- Joliet must buy the apartments by Sept. 1 and have a team in place to oversee their management.

Although the council has been proceeding with the idea that Holsten would manage the site on the city’s behalf, no contract has been signed. The housing authority could be tapped for the job as long as a deal is struck before the sale and federal officials sign off on it.

Beyond that, the big question for the council is what to do with the complex in the long run. Holsten’s presentation outlined four options that ran the gamut from an extensive $70 million renovation to a more modest $24 million redevelopment to doing nothing other than changing management overview.

Housing authority Eric Hanson told the council that he saw Holsten’s proposals as “innovative, ambitious, but also unrealistic” given the amount the city would be expected to invest.

Focusing on the consent decree under which the city must proceed, there are only two things the council must do – provide 115 units of housing and establish a community center – and neither of those need cost the city very much, Hanson said. The rest of the residents would be given housing vouchers that they can use not only anywhere in Joliet or the state, but anywhere in the country.

The mandated 115 apartments need not be on the site of the existing Evergreen Terrace, but can be anywhere in the city, he said. The housing authority can help build new homes on lots the city already owns using money it secures from the federal government and private bank funding or it can strike deals with landlords in which apartments can be locked in for as long as 15 years, he said.

Neither would cost the city anything other than, perhaps, some of its annual CDBG funding, he said.

Beyond that, Hanson said he found some of the points made by Holsten last week – such as a $3 million price tag to build a community center -- “stunning.” Nor should it cost $300,000 a year to operate, he added.

“There should be no cost to the city for operating a community center because I can assure you, you will have social service agencies that will be willing to do it (for you),” Hanson said.

Another advantage to the city joining forces with the HAJ is that it would prevent Joliet from competing with the housing authority for the same pool of funds, housing authority CEO Michael Simelton told the council.

HAJ already operates 1,000 units of subsidized housing in the city at eight different sites, Simelton said, and it has partnerships with not only dozens of non-profit groups, including Catholic Charities, Trinity Services and Volunteers of America, it has financial ties to U.S. Bank, Bank of American and other businesses that are interested in investing in Evergreen Terrace, he said.

The key is to have a big picture strategy, said Jim Roberts, the housing authority’s financial advisor, who estimated that the whole Evergreen Project need not cost more than $56 million.

“You have to have a clear plan of action that’s articulated and a housing strategy that’s consistent from day one,” Roberts said. “We are competing for dollars across the state to bring them into Joliet, which means we have to as a community be driven by (a unified) mission.”

Even if the city isn’t ready to commit to HAJ’s plan to develop Evergreen Terrace, it makes sense to use them as property managers, Hanson said.

“They have the experience,” he said, noting that the agency was just three points shy of being in the top 10 percent of housing authorities in the country. “They have the expertise. They are well-received by HUD.”

Contact Karen Sorensen at Karen@TheTimesWeekly.com.