Thursday, June 18, 2009

Aldermen want answers regarding Vanecko deal
June 17, 2009

BY FRAN SPIELMAN City Hall Reporter/
Chicago aldermen on Tuesday demanded to know why the city has paid nearly $500,000 to lease space at a South Side industrial site co-owned by Mayor Daley's nephew without City Council approval required for city leases.

As chairman of the City Council's Committee on Housing and Real Estate, Ald. Ray Suarez (31st) should have signed off on the lease at 3348 S. Pulaski.

But, the Daley administration's decision to make it a month-to-month lease -- and continue that temporary arrangement since November, 2007 -- denied Suarez' committee and the full City Council the right to approve the deal.

"Things have to be done the right way. Right is right. Wrong is wrong. You can't skirt" the rules, Suarez said.

"Why didn't we get a long-term contract? I want to know what their justification is for giving them a month-to-month lease. You could do month-to-month for a while," but not for 15 months.

Unless the city can prove it needed flexibility to get out of the lease quickly, it appears that the month-to-month lease was designed to get around the City Council, said Ald. Joe Moore (49th).

"It would seem to me that someone was trying to hide something," Moore said.

He added, "One of the reasons we have these meetings is so the public and ... media can know who's getting these leases. It begs the question why, in this particular case, it was done in what appears to be a secretive fashion. We are owed an explanation."

Anthony Pascente a spokesman for the city's Department of General Services, did not return repeated phone calls on the lease.

Despite weeks of questions from the Chicago Sun-Times, City Hall yet to produce a lease document or invoices to justify the monthly payments, at a rate of $3.83-per-square foot for 70,565 square feet of space, 20 percent of the warehouse.

Nor have city officials provided an explanation for the month-to-month arrangement with mayoral nephew Robert Vanecko and his partners, developer Allison Davis and Davis' son Jared.

The Sun-Times reported earlier this month that Vanecko and Davis used $4.2 million of the $68 million they manage for five city employee pension funds to help buy the mostly vacant warehouse and surrounding land.

On Sunday, the newspaper disclosed that the lease was linked to the demise of Chicago's scandal-plagued Hired Truck program.

The Department of Water Management says it needed a place to park dozens of dump trucks leased by the city to replace Hired Trucks.

In October, 2006, they found the ideal spot in the massive industrial property on Pulaski Road, just north of the Stevenson Expy.

After parking the trucks outside for a year, they decided to move them inside the warehouse on the 15-acre site.

As they negotiated a lease for that building, it changed hands, officials said. And City Hall insisted it had no idea that the new owners of the building included an investment company co-owned by the mayor's nephew.

Last week, Vanecko abruptly announced that he would "end his involvement with DV Urban Realty Partners, both as a general partner and as an investor," effective July 1. He cited a desire to minimize "unwarranted distractions.

He bowed out two weeks after a federal grand jury issued subpoenas seeking details of why the pension funds invested with Vanecko's start-up firm three years ago.

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