Insiders Have Parts in Post Office Development Saga [Chicago Sun-Times]

by Dan Mihalopoulos, 8/6/2013

Rendering shows the old Main Chicago Post Office after a planned first phase of its redevelopment. The view is westward along Congress Parkway. Courtesy Antunovich Associates

Much of the attention surrounding the old Chicago Main Post Office redevelopment has centered on the Monaco-based English developer Bill Davies and his patchy track record.

Others who stand to benefit from the recently approved plan have escaped notice. The site on the southwestern edge of downtown is in line for a potential investment of $4 billion over many years, and it’s often mentioned as the first Chicago casino site if the city ever gets a gambling license.

Public records show the City Council’s approval for the project at 433 W. Van Buren also includes several parcels around the old post office. One is at Clinton and Harrison and is owned by 527 S. Clinton LLC, whose investors include three longtime local businessmen:

◆ Richard Simon, the former police officer whose janitorial firm controversially won a big contract at O’Hare Airport last year from Mayor Rahm Emanuel’s administration.

The Chicago Sun-Times has reported that Simon failed to disclose that he sold a major stake in the janitorial company while it pursued the $99.4 million airport deal. The mayor’s aides declined to cancel the deal, even though the city can do so if bidders don’t provide current ownership information.

The Sun-Times also has reported that Simon employed a man convicted of racketeering in a case for which other defendants included the late Chicago mob boss Anthony “Big Tuna” Accardo.

◆ William Pacella, whose Bridgeport trucking company got business in the city’s old, scandal-plagued Hired Truck program.

Pacella had teamed up with Fred Bruno Barbara, a friend of former Mayor Richard M. Daley, in a failed bid for an Illinois riverboat casino license in the 1990s.

◆ George Bonomo, another Bridgeport businessman who also has invested in race horses with Pacella.

In 2010, Bonomo and Pacella got council approval for a 33-story building on their land just west of the old Post Office. It hasn’t been built.

Pacella, Bonomo and another investor, Vahooman Mirkhaef, have 26.67 percent stakes in 527 S. Clinton LLC, while Simon has a 10 percent interest, according to disclosures the company was required to make as part of the post office development’s zoning application.

Jack George, the zoning attorney for Davies’ company, International Property Developers North America Inc., said his client has an option to buy the 527 S. Clinton site, a parking lot. George said he dealt with an agent of the owners and was unaware of their identities.

Property records show 527 S. Clinton LLC took out a $4.2 million mortgage on the property in June 2012.

Final zoning approval for the post office plan came last month. The proposal calls for filling the massive old building with residences and stores while surrounding it with three high-rises. Construction to the west of the building on the Clinton Street land is seen as coming in a later phase, probably many years from now.

An earlier zoning plan for the post office in 2010 also included a 6.5-acre riverfront site known as Franklin Point, running southwest of Harrison and Wells. However, George said the property is no longer part of the post office zoning. He said Davies owned an option to buy the property, but it has lapsed.

Any work on the post office could lift the value of Franklin Point. Its owners include two New Yorkers who started the Rocawear clothing line with rap superstar Jay-Z.

Alex Bize and Naum Chernyavsky each own 35 percent of the company that controls the site, city records show.

BRACH’S GETTING BULLDOZED: Itasca-based ML Realty Partners LLC, owners of the old Brach’s candy plant at 401 N. Cicero, plans to start demolishing the remaining parts of it. A spokesman said asbestos work should be done by the fall and demolition should be finished by next spring. ML intends to replace the factory with a 520,000-square-foot industrial building.

The goal is to make the site more attractive for tenants and take advantage of an improving economy, the company said in a statement. But something else is spurring it into action.

It’s the threatened end of a $10.6 million city subsidy to help with demolition costs. The city in 2008 approved the deal for ML. It was due to expire last May 31 for lack of action at the site, but at the last moment the city extended it for six months.

A spokesman for the city’s Department of Housing and Economic Development said the deal requires the developer to finish a new building by Oct. 31, 2014. ML will have to hustle.

Hollywood did part of the job in 2007 when it blew up some of the Brach’s plant for a Batman movie.


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