Wheeling settles PhilHaven lawsuit, apartments will be built

The village of Wheeling has reached a settlement with the developers of PhilHaven, a proposed apartment building for people with mental and physical disabilities, that will permit the controversial project to be built.

PhilHaven, a 50-unit building to be erected at 2418-2422 W. Hintz Road, was unpopular with neighboring homeowners and twice rejected by the Wheeling village board. The developer, Daveri Development LLC, sued, claiming discrimination.

The settlement comes two months after a ruling from U.S. District Court Judge John Z. Lee, that said Daveri had a “better than negligible” chance of winning if the case went to court because it was clear there was “discriminatory effect” and “some evidence of discriminatory intent” on the part of the village when it rejected PhilHaven.

The agreement, if approved by the judge and both parties, will end the lawsuit.

PhilHaven was first proposed in March 2012. The Wheeling Plan Commission twice recommended it be approved, but the village board say no, citing concerns about zoning, flooding, safety and the number of upset neighbors.

Details of Wednesday's settlement are being worked out, but Jessica Berzac, a former Daveri vice president and now a consultant with them, said she is very pleased.

“The parties came to an agreement that still needs to be drafted, reviewed by the parties and approved by the judge, but we are confident that will happen,” said Berzac, adding the process will take at least a few weeks to finalize. “We are pleased and thankful to the village for their efforts in settling this.”

There will be a monetary aspect of the settlement, with the village having to pay for some of Daveri's legal fees, but the village will announce the details at a later date, said Village President Dean Argiris.

The Wheeling Village Board expects it will approve the settlement on June 3.

Argiris said he is disappointed that the dispute over PhilHaven made it seem like Wheeling was being discriminatory, when he says he and other board members legitimately voted against the project because it didn't fit the village's zoning code.

“I welcome the development in town like I would welcome any development and its residents with open arms,” Argiris said. “But, to be pinned against the wall based on hearsay and mistruths upsets me because it's not the truth. We did our best to represent our community and we were basically given an ultimatum and it was an expensive one.”

Argiris said had Wheeling permitted the lawsuit to go to trial, and then lost, it could have cost millions of dollars.

Daveri Development sued Wheeling in September 2012, claiming the village violated the federal Fair Housing and Americans with Disabilities acts by denying the PhilHaven project.

The apartments would provide housing and some services to low-income residents who have mental illnesses but can live independently.

Daveri is working with the North/Northwest Suburban Task Force For Individuals with Mental Illness to build PhilHaven, in conjunction with services offered to residents by the Kenneth Young Center and the Alexian Brothers Health System.

In 2008, the village board approved a plan for luxury apartments at that location, but that project fell through.

“The primary difference between these examples and PhilHaven is that the residents of PhilHaven are mentally disabled and their commonality relates directly to their disability. Such a distinction is not permissible,” Lee's March ruling said.

This is the second federal lawsuit Daveri has filed against a Northwest suburb that rejected one of its proposals for housing. In June 2012, a similar lawsuit against Arlington Heights was dismissed by a federal judge who ruled the village was within its right to deny the project.

Daveri also is building Myers Place, a 39-unit apartment building for disabled residents, at Dempster Street and Busse Road in Mount Prospect, which will have its grand opening next month.

Daveri has planned to partially fund PhilHaven through federal low-income tax credits, which can be applied for only twice each year — meaning it may be several months before developers are able to secure funding and start construction.

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