southsider2k5 Posted October 31, 2008 Share Posted October 31, 2008 http://www.chicagotribune.com/news/local/c...0,2204141.story Congressman's $200,000 loan U.S. Rep. Luis Gutierrez's loan from a developer who contributes to his campaign raises questions about how clout drives the city's zoning system By Robert Becker, Todd Lighty and Dan Mihalopoulos | Tribune reporters October 29, 2008 U.S. Rep. Luis Gutierrez personally lobbied Mayor Richard Daley to back a controversial multimillion-dollar development for a campaign contributor who had just lent the congressman $200,000 in a real estate deal, a Tribune investigation has found. Now the congressman's unusual gesture of support is under federal scrutiny as authorities investigate how developers overcame city planners' objections to convert the West Side industrial site into a more profitable residential and commercial development. Authorities have obtained Gutierrez's July 7, 2004, letter to Daley—written on U.S. House stationery—as part of their grand jury investigation into how zoning works inside City Hall, sources told the Tribune. Gutierrez said there is no connection between the loan and his letter of support for the Galewood Yards project, which is not in his district. In a written statement, the congressman said his involvement was "extremely minimal" and "entirely appropriate." The federal investigation comes as the Tribune's "Neighborhoods for Sale" series documents an insiders' game in which politicians rake in millions in campaign cash from developers and other real estate interests while often overriding concerns of homeowners and city planners. It is a system that has fundamentally reshaped the character of city neighborhoods. Calvin Boender, the developer of the Galewood Yards project, has been a longtime campaign donor to Gutierrez and a major contributor to Ald. Isaac Carothers (29th). As part of their investigation, federal authorities have subpoenaed city records related to Boender's project and three others that Carothers backed in his West Side ward. Gutierrez, an eight-term Democrat, was elected to Congress in 1992 and is seeking re-election in November against little-known Republican and Green Party challengers. Boender did not return messages requesting an interview. Gutierrez sent the letter of support after buying a vacant lot from Boender at 1007 W. Fulton St. with the help of a $200,000 loan from him. The congressman provided the Tribune with bank documents stating he repaid the loan at an above-market interest rate. It is not unusual for one party to lend the other money to complete a land deal, Gutierrez said, adding he got no unfair financial advantage and actually lost money in the 2004 investment. He praised Boender as a reputable businessman. "I know him and I know his good work," Gutierrez said. Over the years, Gutierrez has enjoyed a close relationship with several developers. He has entered into real estate deals with them, and they have helped finance his re-elections. Gutierrez said there is nothing wrong with such relationships, in part because he has never used his public position to help developers who do business with him. In an interview last year, Gutierrez emphasized that he never gets involved in local zoning matters. "One of the reasons that we're very careful about our real estate investments is that I don't have anything to do with zoning changes. I don't write letters of recommendation; I don't have a vote on the zoning committee. . . . I've done nothing using my official capacity as a [congressman]," Gutierrez said. Boender of Elmhurst has developed projects throughout Chicago and has donated generously to local politicians—particularly to Gutierrez and Carothers. Through interviews and records obtained under the Freedom of Information Act, the Tribune pieced together how Boender found success at Galewood Yards, where previous owners had failed. It took Boender years of haggling with reluctant city Planning Department officials, even as he enlisted the support of Gutierrez, Carothers and other aldermen. City Hall rejected a previous proposal to build houses and commercial businesses on the property, citing the Daley administration's policy of preserving scarce industrial areas to promote manufacturing jobs. Boender bought the property from CMC Heartland for $6.9 million in July 2000. In the following year, he and his companies contributed $18,000 to Gutierrez and donated to Carothers, giving him more than $13,000. To date, Boender and his associates have given $41,000 to Gutierrez and more than $55,000 to Carothers. Boender initially worked with the city's plans to attract industry, including an agreement to build at least one heavy-duty truck ramp from the rebuilt Central Avenue Bridge that spans the site, records show. But over time it became clear that Boender had different ideas. After suggesting numerous industrial firms to the developer, city planning staff noted in memos that he "was unwilling to work with them." Eventually Boender told the city he wanted to build homes and a commercial development instead. Planning Department staff resisted, and the behind-the-scenes battle over Galewood Yards culminated in a summer 2004 meeting where city planners told Daley they opposed Boender's changes. After that meeting, Gutierrez faxed his letter to Daley's office. In it, Gutierrez said he understood a planner had told the mayor Boender was a "bad guy of sorts." "I absolutely refute this characterization," he wrote. He reminded Daley that the mayor was particularly "delighted and supportive" of Boender's redevelopment of the Illinois Bell building in the late 1990s. "I would ask for any support that you can give him at this time," Gutierrez wrote. He noted Carothers and Ald. Emma Mitts (37th) backed the project, which is split between their wards. Over the next 18 months, Boender and the city reached a compromise. Land west of Central Avenue would be sold—with the help of city tax breaks—to the laborers union for a training center. The land east of Central Avenue would be rezoned to allow construction of a 14-screen movie theater and nearly $60 million residential development of 187 single-family homes, townhouses and condos. Boender's project reached the Chicago Plan Commission in March 2006, where he was represented by lawyer James Banks, whose uncle chairs the City Council's Zoning Committee. Carothers and Mitts praised it. Carothers compared the economic impact of the Galewood project to architect Santiago Calatrava's proposed lakefront Spire, which the commission approved the same day. "It took a long time to bring this together," Carothers told commissioners. "I think when it's done, that it will be said that this is one of the greatest projects you've seen in Chicago in some time." Mitts took a more personal approach: "I'm really excited and trying to see my way through [to] acquiring one of those homes." Mitts, however, never moved in. In an interview Tuesday, Mitts said she made a down payment last year on a Galewood Yards home but backed out of the deal because she "could not swing it" financially. Tribune reporter Jeff Coen contributed to this report. [email protected] [email protected] [email protected] http://www.chicagotribune.com/news/columni...,7407954.column Daley's memory slips as Gutierrez regains stride John Kass October 30, 2008 When it comes to prancing proudly, few politicians step as high as U.S. Rep. Luis Gutierrez (D-Boender). According to a fascinating Tribune story published Wednesday, part of the newspaper's "Neighborhoods for Sale" series about the clout, intrigue and insider influence in the politics of zoning in Chicago, it costs only $200,000 to dance with the congressman. That's a nice number, $200,000, curvy with zeros. But now the feds are investigating. Sadly, as a result of the Tribune story, at least one prominent Chicago politician has developed a terrible case of Newsheimer's Disease, in which the politician pretends he didn't read the paper, so as to avoid comment. Newsheimer's is a horrible ailment, robbing not only the powerfully afflicted, but also the reporters who seek comment. My colleagues Robert Becker, Todd Lighty and Dan Mihalopoulos worked mighty hard to report that Gutierrez received a $200,000 business loan in 2004 from developer Calvin Boender so that Gutierrez could buy a lot from Boender at 1007 W. Fulton St. Boender was being stalled by Daley administration Planning Department officials on another deal to develop homes on the West Side. The mayor was at the meeting. They didn't want to turn an industrial site into a residential development. So after Gutierrez received his loan, he wrote Daley a letter, on U.S. House of Representatives stationery, asking the mayor to override the objections of his city planners. Guess what happened? Go on, guess. The Planning Department objections were overcome. Boender was represented before the Chicago Plan Commission by the duke of zoning lawyers, Jimmy Banks, whose father, Sam "Pastries" Banks, runs the 36th Ward Regular Democratic Organization. Pastries' little brother William Banks is the 36th Ward alderman. Since Daley has been mayor, Billy Banks has been chairman of the council Zoning Committee. So Boender began his development with the mayoral seal of approval. Surprised? And to think some cynics actually have the gall to suggest that Chicago isn't the fertile crescent of American political reform. Gutierrez insists he repaid the loan. All he did was write a letter. Tell it to the feds, Luis. "I don't know anything about it," the mayor told reporters Wednesday. He was asked: Do you remember getting that letter [from Gutierrez], and what was your reaction to it? "I don't know. I don't know. I didn't even see it. I didn't even read about it. What paper was it?" the mayor said. It was in the Tribune, mayor. "I didn't read it, to tell you the truth. … I haven't read anything about it. … I'm not going to talk about something I have not read," the mayor said. Reporters must have been horrified to see the powerful boss of Chicago grapple helplessly with a full-blown attack of Newsheimer's. The mayor's press secretary, Jacquelyn Heard, later told reporters that she found the story confusing, and rather than confuse the mayor, she didn't brief him about it. But he's a loyal reader of my column, so I hope he likes this one. And really, Ms. Heard, it's quite simple: The feds are investigating the politics of zoning in Chicago. They're investigating the Gutierrez letter, other aspects of this deal and other deals. And, they're investigating the mayor's own 11th Ward Bridgeport stronghold. That's where the mayor's second-favorite developer, Tommy DiPiazza (who is Jimmy Banks' buddy), and the fifth Daley brother, Tim Degnan, have become the objects of acute federal interest for their work on the controversial Bridgeport Village residential project. One politician curiously immune to Newsheimer's is Gutierrez. He says he never involves himself with zoning matters on his real estate investments. Of course he doesn't. Isn't that what the Banks family is for? "One of the reasons that we're very careful about our real estate investments is that I don't have anything to do with zoning changes," Gutierrez told the Tribune. "I don't write letters of recommendation; I don't have a vote on the zoning committee. … I've done nothing using my official capacity as a [congressman]," Gutierrez said. Except write that letter for the guy who lent you $200,000. Loyal readers—even politicians dumbstruck with Newsheimer's—may remember that 10 years ago, I found out that Gutierrez paid a measly $274 in property taxes each year for his luxurious new Chicago home, which in the mid-1990s was valued at $340,000. Mysteriously, his home was listed on the county books as a vacant lot. Gutierrez's neighbors were upset. And Luis started shrieking at me and complained to my bosses that I was unfair. He was so enraged that he leaked my story to the Sun-Times, hoping for a pro-Luis spin. But then he quietly paid his bill in full, explaining the mortgage company made a mistake on his escrow account. He took little steps then. Meek steps. But he obviously recovered. And now Luis is high-stepping once again, dancing proudly along the Chicago Way. [email protected] Link to comment Share on other sites More sharing options...
Texsox Posted October 31, 2008 Share Posted October 31, 2008 Big Picture this is another two handed situation. One hand, I like politicians that invest in their districts. I like their future prosperity to be linked to the community. On the other hand. We ask them to do their private business with the people who will not support their campaigns. That seems dumb. We all like dealing with people who we share common values. We also support politicians we agree with. To fix these sorts of things, we would be asking, for example, McCain to use only Democrats in his private dealings. So we have this intermingling that appears sleazy, but I don't see an alternate that makes sense. I know I'm not saying this clearly. SS and Kap are generally aligned in most topics. If SS was running for office, Kap would naturally support him. If Kap felt good about an investment opportunity, there is a reasonable chance that naturally SS would feel good about it to. Perhaps it is the redistricting part of downtown Michigan City for light industrial. Now let's say there is a second group that wants to bulldoze everything and make a pretty park and preserve a spider that was found there. Would we rally believe that is was Kaps campaign contribution that cause SS to agree to light industrial? Of course not. Same with politicians investing in the large employers in their districts. Later when decisions are made that affect the business is it because of the politicians investment or because it is best for the biggest employer in her district, which would also be in the districts best interest? Tough ethical considerations here. And I'm not saying this was wrong, right, or whatever, just looking at a bigger picture. Link to comment Share on other sites More sharing options...
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