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SOUTH EAST LAKE VIEW NEIGHBORS v. DEPT. OF H.U.D.

July 2, 1981

SOUTH EAST LAKE VIEW NEIGHBORS, PARK WEST COMMUNITY ASSOCIATION, CHERYL RAFF, AND RICHARD MEANS, PLAINTIFFS,
v.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, MOON LANDRIEU, ELMER BINFORD, AND LAWRENCE B. SIMONS, DEFENDANTS.



The opinion of the court was delivered by: McMILLEN, District Judge.

DECISION

This case is now before the court on the motion of the defendants and the intervenors to dismiss. These motions were filed and partially briefed before Judge Hoffman denied plaintiffs' motion for a preliminary injunction, but they have never been ruled on. Although the Court of Appeals remanded this case "for trial as immediately as possible [sic] on the permanent injunction," the threshold motions must be decided before any trial. We believe the motions are well-founded and that plaintiffs lack standing to sue.

On these motions we take the allegations of the complaint to be true and must deny the motions if plaintiffs could prove any facts which would show them to be entitled to relief. Jenkins v. McKeithen, 395 U.S. 411, 89 S.Ct. 1843, 23 LEd.2d 404 (1969). Since no genuine issues of material fact have yet been raised, our decision is based solely on the law as applied to the second amended complaint.

A 17-story apartment building being erected on the corner of Broadway and Diversey on the near north side of Chicago is at the center of this matter. Seventy-six of the residential units will be subsidized for elderly and handicapped tenants; another 71 have been set aside for families with low and moderate income. The remaining 102 residential units will be available for rental at market rates. The building also has commercial space for rental on the ground floor.

The plaintiffs include the South East Lake View Neighbors (SELVN), a not-for-profit corporation, and the Park West Community Association (PWCA), a similar not-for-profit association, both consisting of residents of the area affected by the new building. Individual plaintiffs on the complaint as originally filed were Cheryl Raff and Richard Means, members of SELVN and PCWA, respectively. The second amended complaint, filed March 23, 1981 added as individual plaintiffs Clara Goldman and Evelyn Caldwell, residents of the community who are allegedly qualified for federal housing assistance ("Section 8 assistance") and potential tenants of the new building.

Defendants are various Federal entities including the Department of Housing and Urban Development; Moon Landrieu, its secretary sued in his official capacity; Elmer Binford, sued in his official capacity as Chicago HUD Manager; and Lawrence B. Simons, sued in his official capacity as Federal Housing Commissioner.

The following also intervened as defendants: the developers Sheldon Baskin, William DeWoskin and Daniel Epstein; and several individuals alleged to have "priority" for apartments in the new building because they were dispossessed by the demolition of the Rienzi Hotel which previously occupied the land in question.

Defendants (both the intervenors and the governmental defendants) continue to maintain that (1) the plaintiffs lack standing to bring this suit and (2) the complaint fails to state a claim upon which relief may be granted. The intervenors have also filed a counterclaim, based on plaintiffs' alleged interference with their civil rights.

The amended complaint contains four counts, all of which stem from the alleged failure of HUD to comply with its regulations and seek to terminate Federal assistance for the Broadway-Diversey project, as follows:

Count I: Under the Housing and Community Development Act, 42 U.S.C. § 1437f, and the regulations promulgated thereunder, the project was submitted to HUD for approval under the procedure outlined for "fast track" processing. This procedure may be followed when a public housing agency (in this case the Illinois Housing Development Authority) determines and certifies to HUD that the proposed project meets the requirements for Section 8 assistance. However, subsequent to the initial IDHA application to HUD for set-aside of Section 8 funds for the project but before acceptance by HUD, the IDHA financing fell through. As a consequence, plaintiffs argue that approval for the project should have been obtained pursuant to "slow-track" processing, which involves more detailed processing by HUD itself in lieu of the reliance on state certification utilized in "fast-track" processing.

Count II: This count is an expansion of the claims in Count I that the approval of the project prior to the preparation of an environmental impact statement constitutes a violation of NEPA. The relief requested in Count II is identical to that of Count I.

Count III: The National Housing Act of 1934, 12 U.S.C. § 17151, authorizes the agency to insure any mortgage for new construction eligible for housing assistance payments under Section 8. HUD has approved the application for $16,808,300 mortgage insurance for the project. Plaintiffs allege that, since the approval of the project for Section 8 assistance is improper, the mortgage insurance is also improper. Plaintiffs seek a declaration that the defendants' approval of the mortgage insurance violates the statute, an injunction against the grant of the insurance, and any other relief deemed equitable.

Count IV: The Government National Mortgage Association has agreed to purchase the FHA-insured mortgage, and plaintiffs allege that without the housing assistance payments which they seek to enjoin under the other portions of the complaint, the mortgage would not qualify for purchase under 12 U.S.C. ...


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