Joliet mayor questions city liability at Riverwalk Homes

The next step in the redevelopment of Riverwalk Homes has stalled amid recurring questions about the city's potential liability in the housing complex.

A vote on the architect for the project, which will involve the demolition of about half of the 356 apartments was put on hold last week. The project is expected to begin in late 2021.

Both Mayor Bob O'Dekirk and Councilman Larry Hug raised questions about the city's exposure to potential liability and whether the limited liability corporation created to own Riverwalk Homes protects the city.

"I don't know how we expect an LLC to shield us from liability if we're making decisions on hiring people," O'Dekirk said at the Jan. 21 council meeting.

He went on to describe the LLC as "a myth" that "could hurt the city down the road."

The subsidized housing complex is owned jointly by the city and Holsten Development, which manages Riverwalk Homes, under a limited liability corporation designed to be separate from direct city ownership and protect Joliet from liability.

But major spending items typically are brought to the council for approval.

A vote to hire Harley Ellis Devereaux as architects for the redevelopment was tabled until the Feb. 4 meeting after Holsten CEO Peter Holsten said he would talk with the U.S. Department of Housing and Urban Development about the city's concerns.

HUD subsidizes tenants' rents at Riverwalk Homes and has oversight authority.

O'Dekirk and Hug had opposed the city's takeover of Evergreen Terrace, since renamed Riverwalk Homes, from private owners. The meeting last week was not the first at which they raised questions about the city's liability in the housing complex.

Hug told the council that he walked out of a meeting earlier that day when the Public Service Committee was about to review the proposal to hire Harley Ellis Devereaux. Hug chairs the committee but said he did not want to participate in the discussion because of his concerns with "that whole firewall concept that was sold to us in 2014."