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