January 10, 2009
BY CAROL MARIN Sun-Times Columnist
Mayor Daley is spitting mad. Furious over Chicago Sun-Times/NBC5 News reports on a clout-heavy deal to buy site of the venerable Chicago Christian Industrial League, relocate the charity's homeless shelter and replace it with pricey condos. As a tragic consequence, a century-old mission may now go bankrupt at a time when its services are needed most.
I'd argue that taxpayers should be raining down wrath on City Hall instead, but you be the judge.
"CHARITY BEGINS AT CITY HALL FOR MAYOR'S PAL" -- that was our Thursday headline that caused the mayor to explode at a news conference.
The story, reported by the Sun-Times' Tim Novak and previewed by yours truly on NBC5's newscast the night before, involved one of Rich Daley's best friends, Michael Marchese.
Marchese, along with partner and political power broker William Cellini (who's under federal indictment in the Blagojevich pay-to-play scandal), made a deal with the Christian Industrial League in 2000 to buy their property.
It looked like a win-win.
The decrepit building, located in Greektown was falling down.
The league, which for 100 years has fed the hungry, housed the homeless and trained the jobless, desperately needed a new home. And the developers needed prime real estate on which to put up a 212-unit condo development.
But as in the subprime mortgage mess, warning signs of big trouble were ignored.
Novak's investigation revealed internal memo after internal memo showing City Hall knew full well that the Christian Industrial League couldn't raise enough money to support the building it wanted to build in North Lawndale, a $25 million state-of-the-art shelter.
"There has been a persistent funding gap of $5 to $6 million," Planning Commissioner Alicia Mazur Berg wrote to the mayor in 2002.
"We are deeply concerned with the viability of this agency," Human Services Commissioner Carmelo Vargas wrote to the mayor in 2005.
Flags? There were flags everywhere that the league was teetering if the project proceeded. But proceed it did. The building went up in 2006. The city has kicked in more than $13 million.
Marchese and Cellini, meanwhile, appear to also have received city charity. They didn't have to worry about tearing down the old building. City tax increment financing funds paid the $1 million ticket for that.
Normally, in exchange for TIF money, developers have to set aside units as "affordable housing" or pay a hefty fee.
Not Marchese and Cellini.
That's because the TIF money was channeled through the Chicago Christian Industrial League even though Marchese and Cellini supervised the demolition.
What did that save the mayor's pal? An estimated $4.2 million.
The day before Novak's story broke, the mayor made a big announcement. Declaring the need for affordable housing "more important than ever," Daley rolled out a $2.1 billion commitment to help renters and homeowners.
D'ya suppose he knew the Marchese story was coming?
The following day, when Daley's fury at the Sun-Times was on full display, he cited the deep personal relationship he and his father before him had with the Christian Industrial League -- a fact no one would dispute -- and how unfair it was to tag the city with the mission's grave financial problems or to suggest that the Marchese deal played any role.
While the Chicago Christian Industrial League has its own profound management problems, the sad truth is that City Hall has known it was in trouble for years.
And yet the city, as our banker, effectively let the Christian Industrial League take out a mortgage it couldn't afford, putting it at risk of foreclosure.
As a result, a charity we need could go broke while clouted developers benefit from taxpayer charity they don't deserve.
The mayor's anger should be nothing compared with ours.