Some condominium owners at 2730-2766 Hampton Parkway recently approached an Evanston City Council Committee about the need for controls on condo deconversions. Photo from James Gordon

Evanston City Council members declared a moratorium on conversions of rental apartments to condominium ownership when that activity hits its peak during the late 1970s, buying time to put protections in place.

Aldermen now may consider a moratorium of a different sort – this time applied to the “deconversion” of condominiums back to rentals.

During citizen comment session at the Nov. 25 City Council Planning & Development meeting, a handful of owners of condominium units at 2730-2760 Hampton Parkway urged aldermen to consider an ordinance similar to that approved in Chicago recently, requiring that 85% of owners vote in favor of a sale to a developer interested in converting the building back to rental.

The current standard is 75%.

During the citizen comment session of the meeting, Gail Weisberg, the first speaker to address aldermen, said she bought her condominium in the 91-unit building in 2006, “because I wanted to own property in Evanston.”

A couple of years ago, a company came by “wanting to buy the building or offering to buy the building,” she related.

“Some owners were moved by a selling price that sounded great due to the current economy and the selling price of condos,” she told aldermen. “But others of us didn’t want to move and didn’t want to sell, because this is our home.”

She said the first time the sale came to a vote was this past July with the “No Sale” side winning.

 “One owner didn’t vote, and the attorneys at that time told us if someone didn’t vote it counted as a ‘No.’ So we thought it was over at that time.”

She said the buyers came back with a new proposal, resulting in a second vote in October, which also fell short of the 75%.

At that time, the attorney used by the group maintained that everyone needed to vote on the issue, saying the “No” votes did not reach what the attorney called the 25% threshold, she told the Committee.

“However, State legislation only mentioned this 75% – nothing about a 25% ‘No’ at all,” she said. Even so, she said, if the two ‘No’ votes were added in, the do-not-sell side would have won again.

Instead, the condo unit owners had to wait another few weeks, giving the buyer more time to try to convince owners to vote yes, throwing in incentives in the meantime, she told aldermen.

 “The final vote was 75.63%,” she reported, with one owner changing their vote.

“Frankly I consider what has happened, and the sale, a hostile takeover,” Ms. Weisberg said, urging aldermen to pass an ordinance similar to Chicago’s in September, requiring an 85% minimum.

Other unit owners in the no-sale group shared similar stories. Mary Miller, another owner, told aldermen, “It has been a heart- wrenching experience to see my neighbors go through this.

 “Many of them lower income — many of them have lived there since the building was converted 19 years ago and don’t necessarily have the means,” she said. With Chicago setting 85% as its mark, investors in that City are now looking “to the collar counties like Evanston to find those to be converted,” she said.

Still another longtime owner, Gloria Meza, proposed a list along of provisions for aldermen to consider along with the 85% approval.

“Please consider that board members cannot receive incentives from the buyer if it conflicts with their judgment with regard to their fiduciary duty to our owners,” she said, leading the list off.

Number four was that owners cannot be held responsible for paying off their neighbors “underwater” mortgages.

Number six on her list stipulated that the due diligence phase by the buyer has must place before the vote occurs.

Number seven stated that each owner should be told the dollar amount, within $500, they will receive at closing prior to the vote occurring.

Number eight called for the condominium association to pay for an assessment of each unit prior to the vote, determining that each owner will make a profit of 10% in the sale of their units.

Number nine stated that a vote can occur only once a year “due to the stress it creates for all owners.”

Members of the Planning & Development Committee recognized the importance of addressing the issue in their initial discussion.

“This is a major concern,” said Alderman Judy Fiske, 1st Ward, “and especially for the elderly and financially challenged who may have bought in a building and suddenly find themselves forced to sell and not able to rent or afford rental in the neighborhood in which they owned a condominium. It’s a real problem.”

She expressed hope that the Committee would support the Chicago model of 85% approval.

Alderman Ann Rainey, 8th Ward, argued there are other steps first. “I don’t think we have to jump into this. Many years ago, when the opposite was occurring, and the City had many wonderful rental buildings that were being converted to condominiums,” she noted, “Evanston took a leadership role and was in the forefront of placing controls on how a building could be converted.”

“The City declared a moratorium on all conversions while it took its time to develop a conversion ordinance,” she said. “And our conversion ordinance was noted in the United States Senate, Springfield and all around the country.

“So, what I’m seeing now is something like that,” she said. “And I think we ought to declare a moratorium on the [deconversions] until we get our act together.”

During further discussion, Michelle Masoncup, the City’s Corporation Counsel, confirmed that the City has the power within its home rule authority to declare a moratorium.

 One of her concerns, though, is that “Chicago is not Evanston,” she told aldermen. “Chicago has a much grander scale for buildings. In Evanston, we have much smaller condo buildings for the most part. So, if you do the math on buildings that are six units, you need unanimous consent [to reach the 85% threshold]. One person can hold the whole thing up.”

A second point is “Congress can do this right now [make changes]. They can amend their bylaws and city governments don’t have to get involved.”

Ald. Donald Wilson, 4th Ward, argued that that the City should come up with something. In the meantime, “I don’t want to see more people being harmed,” he said.

Committee members voted to place the issue on their agenda in January for further discussion.

“Many people when they buy their condominium, that’s their home,” pointed out Ald. Eleanor Revelle, 7th Ward. “It’s where they plan to live for the long term, and to have that future suddenly taken away from them is really, really difficult.”

In that respect, “It would be helpful to have a moratorium to come up with something that’s tailored for larger buildings versus smaller buildings and address some of fine points that were raised tonight.”