City sues to break Millennium Park restaurant’s lease

City sues to break Millennium Park restaurant’s lease


By Fran Spielman City Hall Reporter
/fspielman@suntimes.com December 1, 2011 4:16PM

Updated: December 2, 2011 2:20AM


Mayor Rahm Emanuel’s administration filed a lawsuit Thursday seeking to invalidate the 20-year concession agreement that has allowed the clout-heavy owners of a Millennium Park restaurant to avoid paying rent and fees for water, gas and garbage pickup.

The Chicago Sun-Times reported in 2005 that the lucrative restaurant lease was awarded to Matthew A. O’Malley, a businessman who got a top Park District official pregnant during negotiations. The newspaper also reported that O’Malley lined up a host of clout-heavy investors, including then-Mayor Richard M. Daley’s friends and neighbors.

After the Sun-Times raised questions about the legality of the lease, City Hall sent a letter to O’Malley warning that the 20-year concession agreement “does not authorize your occupation of the Park Grill facilities” because the city owns the land beneath the restaurant and City Hall was not party to the agreement.

But instead of terminating the lease, the Daley administration tried to renegotiate in hopes of cutting a deal more favorable to Chicago taxpayers. Those negotiations went nowhere.

Now, Mayor Rahm Emanuel is trying to force the issue with a lawsuit that, if successful, could nix the investor’s impending sale to the Levy group and empower the city to rebid the contract to the highest bidder.

The lawsuit filed Thursday places the city in the unusual position of suing not only Millennium Park Joint Venture LLC but the Chicago Park District, which is run by Emanuel’s handpicked appointees.

Michael Shakman, an attorney representing the original investment group, blasted the lawsuit as a blatant “money grab” by the city.

“This was a clean and honest deal negotiated fairly by an outside consultant the city hired at a time when absolutely nobody wanted to put a restaurant at Millennium Park. Nobody was willing to take the risk. It was right after 9/11 when the restaurant business was terrible and Millennium Park was viewed as a high-risk area,” Shakman said.
“It’s a money grab by the city. They see this restaurant that was struggling and now looks like it’s something of value and the city is making an effort to seize some of that value. It’s not a very pretty picture of how to deal with people who step up to the plate and take on a challenging project like this to treat them this way. It’s kind of disappointing.”

Shakman was asked why the deal allows Park Grill to avoid paying fees for water, gas and garbage pick-up as well as the $275,000 in annual rent whenever gross sales fail to reach a certain level they have never reached.

“They made a deal. It includes all the terms it includes. I know it’s hard to believe, but it was an arms-length, straight and honest deal with no clout involved,” he said.

Corporation Counsel Steve Patton refused to comment. In a prepared statement, he argued that six years of negotiations aimed at putting in place a “competitive and fair market” agreement more favorable to Chicago taxpayers went nowhere.

“The city believes the current agreement is invalid because the Park District granted the city a perpetual easement and use rights for the Park Grill site in 2001,” he said.

“Last week, the city received a letter from the current ownership group indicating that they intended to go forward with a proposed sale of their interest to a third party, which necessitated the city’s action today. We believe these facilities belong to the city and we are enforcing the city’s right to utilize them in a way that provides the fullest benefits for taxpayers.”

Last year, the Illinois Supreme Court ruled that the Park Grill does not have to pay property taxes. That 4-3 ruling set the stage for the sale to Levy.

Please read complete article at link below:


http://www.suntimes.com/business/9184818-420/city-sues-to-break-millennium-park-restaurants-lease.html

Editor's note: These "monkeyshines" went on for 20 years? “money grab” The absolute gall of Shakman! With examples as Millennium Park, it is no wonder the corrupt Probate Court of Cook County is able to get away with its, "monkeyshines". Lucius Verenus, Schoolmaster, ProbateSharks.com