CITY OF CHICAGO v. MICHIGAN BEACH HOUSING CO-OP.

Nos. 1-92-1496 & 1-92-1734.

609 N.E.2d 877 (1993)

242 Ill. App.3d 636

182 Ill.Dec. 343

The CITY OF CHICAGO, a municipal corporation, Plaintiff-Appellant, v. MICHIGAN BEACH HOUSING COOPERATIVE, an Illinois not-for-profit corporation; Jayson Investments, Inc., an Illinois corporation, as general partner on behalf of Michigan Beach Cooperative Partners Limited; Michigan Beach Limited Partnership, an Illinois limited partnership; Michigan Beach Development Corporation, an Illinois corporation; National Tax Credit, Inc. II, a California corporation; National Partnership Investments Corporation, a California corporation, as general partner on behalf of National Tax Credit Investors II, a California limited partnership; Metropolitan Community Foundation, Inc., an Illinois not-for-profit corporation; ICF Development Corporation, an Illinois corporation; Ida C. Fisher; Cincinnati Mortgage Corporation, an Ohio corporation; Government National Mortgage Association (GNMA), a Federal agency corporation; Huntoon Paige Associates, Ltd., a New Jersey corporation; Braden-Jayson Construction, Inc., an Illinois corporation; Sound, Inc., an Illinois corporation; Reliance Elevator Co., an Illinois corporation; Zera Construction Co., Inc., an Illinois corporation; Jamerson & Bauwens Electrical Contractors, Inc., an Illinois corporation; Midwest Construction and Development Corporation, an Illinois corporation; Northern Trust Corporation, an Illinois corporation; Title Services, Inc., an Illinois corporation; Levenfeld, Eisenberg, Janger, Glassberg, Somotony & Halper, an Illinois partnership; Klayman & Korman, an Ilinois corporation; and Elliot, Dudnik & Associates, an Illinois corporation; and R. Carter Sanders, Jr., a resident of Washington, D.C., Defendants-Appellees. The CITY OF CHICAGO, a municipal corporation, Plaintiff-Appellant, v. MICHIGAN BEACH HOUSING COOPERATIVE, an Illinois not-for-profit corporation; Jayson Investments, Inc., an Illinois corporation, as general partner on behalf of Michigan Beach Cooperative Partners Limited; Michigan Beach Limited Partnership, an Illinois limited partnership; Michigan Beach Development Corporation, an Illinois corporation; National Tax Credit, Inc. II, a California corporation; National Partnership Investments Corporation, a California corporation, as general partner on behalf of National Tax Credit Investors II, a California limited partnership; Metropolitan Community Foundation, Inc., an Illinois not-for-profit corporation; ICF Development Corporation, an Illinois corporation; Ida C. Fisher; Cincinnati Mortgage Corporation, an Ohio corporation; Government National Mortgage Association (GNMA), a Federal agency corporation; Huntoon Paige Associates, Ltd., a New Jersey corporation; Braden-Jayson Construction, Inc., an Illinois corporation; Sound, Inc., an Illinois corporation; Reliance Elevator Co., an Illinois corporation; Zera Construction Co., Inc., an Illinois corporation; Jamerson & Bauwens Electrical Contractors, Inc., an Illinois corporation; Midwest Construction and Development Corporation, an Illinois corporation; Northern Trust Corporation, an Illinois corporation; Title Services, Inc., an Illinois corporation; Levenfeld, Eisenberg, Janger, Glassberg, Somotony & Halper, an Illinois partnership; Klayman & Korman, an Illinois corporation; and Elliot, Dudnik & Associates, an Illinois corporation; and R. Carter Sanders, Jr., a resident of Washington, D.C., Defendants-Appellees.

Appellate Court of Illinois, First District, Second Division.

January 26, 1993.


Attorney(s) appearing for the Case

Kelly R. Welsh, Corp. Counsel, Chicago (Lawrence Rosenthal, Deputy Corp. Counsel; Benna Ruth Solomon, Chief Asst. Corp. Counsel; Mardell Nereim, Asst. Corp. Counsel; Joan Boman, Asst. Corp. Counsel, of counsel), for plaintiff-appellant.

Torshen, Schoenfeld & Spreyer, Ltd., Chicago (Jerome H. Torshen, of counsel), Canel, Davis & King, Chicago (Jay A. Canel, of counsel), for defendants-appellees Jayson Investments, Inc.; Michigan Beach Ltd. Partnership; Michigan Beach Development Corp.; Braden-Jayson Const., Inc.; and Michigan Beach Housing Co-op.

McDermott, Will & Emery, Chicago (Alan S. Rutkoff, Scott W. Ammarell, of counsel), for defendants-appellees National Tax Credit Investors II; National Tax Credit, Inc. II; and National Partnership Investments Corp.

Fred Foreman, U.S. Atty., Chicago (Linda A. Wawzenski, Asst. U.S. Atty., Nancy K. Needles, Executive Asst. U.S. Atty., of counsel), for defendant-appellee Government National Mortg. Ass'n.

Jones, Day, Reavis & Pogue, Chicago (James R. Daly, Carol A. Tiesi, of counsel), for defendant-appellee Huntoon Paige Associates, Ltd.

John K. Kallman, Chicago, for defendants-appellees Metropolitan Community Foundation, Inc.; Sound, Inc.; Zera Const. Co., Inc.; Jamerson & Bauwens Elec. Contractors, Inc., Midwest Const, and Development Corp., Northern Trust Corp.; Title Services, Inc.; Levenfeld, Eisenberg, Janger, Glassberg, Somotony Gremley Klayman & korman, Elliot Dudnik & Associates, and R. Carter Sanders, Jr.


Justice SCARIANO delivered the opinion of the court:

The Michigan Beach Apartments (the building) is comprised of 240 units, all of which were rented to low-income families after the building was erected in 1967. It was financed by a Federally insured mortgage upon which the building was in default from 1971 until 1984, when the United States Department of Housing and Urban Development (HUD), its sole creditor, finally foreclosed on the obligation. The owner thereupon...

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