The city of Joliet has voted to transfer ownership of a low-income apartment complex known as Evergreen Terrace from the city to a limited liability company called “Riverwalk Homes.”
Joliet has faced off in court against Evergreen’s residents and the federal government during an eleven-year struggle to take over the apartments; an effort that WBEZ has reported on. The city is currently set to take control of Evergreen in October. The transfer of ownership is meant, in part, to shield the city’s assets if an Evergreen resident sues. Protection from liability was a selling point for advocates of the city takeover, says Joliet mayor Bob O’Dekirk.
But O’Dekirk says the lawyers the city has consulted with are unsure if running Evergreen through an LLC will actually protect Joliet’s coffers.
“The problem would be if the judge didn’t agree and allowed for the city to be held liable,” O’Dekirk said. “It would open up a lot of liability for everything that happens on that property. And Joliet taxpayers would be on the hook.”
City councilman Larry Hug, who has opposed the city’s takeover effort for years, agreed.
“I have doubts about whether running Evergreen through an LLC would survive a court challenge,” he said.
Stake in the LLC is split between Joliet and Holstein Real Estate Corporation, which Joliet has contracted to manage Evergreen. But Joliet City Manager Jim Hock said during Tuesday’s city council meeting that the city would have control of all decisions regarding the apartments.
Joliet’s Evergreen setup is highly unusual. Subsidized housing is almost entirely run by public housing authorities, or as a partnership between a private management company and the federal government.
Miles Bryan is a WBEZ reporter. Follow him @miles_bryan