The Chicago Park District is so short of funds it’s cutting programs, raising fees, and telling community groups that if they want a playlot, soccer field, or running track, they’ll need to raise the money themselves. Nevertheless, it has somehow found roughly $22 million to spend on Streeterville real estate for its central office. The district has been renting there since 2001, and officials say the conversion to ownership, which the board approved in February, will save about $720,000 a year in property taxes.
At the time Park District flacks said a central location would be convenient for members of the public who needed to get there. Except the public doesn’t really need to get there—the central office holds the administrative staff and computers but no programs, and monthly board meetings are usually held in neighborhood parks. Anyone who actually did need to visit would find expensive parking and the nearest train stop about half a mile away.
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The building was owned by the Teachers’ Retirement System of Illinois, the massive pension fund that oversees the retirement and disability savings of thousands of teachers throughout the state. The TRS has been in the news lately because former board member Stuart Levine is now the key witness against Tony Rezko, who’s on trial for, among other things, shaking down contributions from investment firms looking to do business with the fund.
The fund ended up selling the building for about $61 million in June 2006 to a consortium that included Golub & Company, which has owned or managed more than $4 billion worth of commercial property around the world, and Wachovia Bank, based in North Carolina. (In December of that year Eugene Golub, who owns Golub & Company, contributed $50,000 to Mayor Daley’s reelection fund.) When the deal went through, the Park District was asked to start paying some of the building’s property taxes.
Would Golub have been granted an exemption? Well, various tax-law geeks I’ve consulted say that it would have been an uphill battle. “Personally, I don’t think they would have got the exemption,” says an official with the Cook County Board of Review. “But that’s not the real question. The real question is why is the Park District responsible for the property taxes in the first place.”
But still not as good as the one the Park District passed up in 2006, when the pension fund offered to sell the same space for $12.3 million, or $112 a square foot.
A side note: The Park District got the $22 million for this real estate purchase from a pool of money created when it leased four downtown garages in 2006. If you remember that harebrained scheme, the district had to lease those garages to pay off the debt on Millennium Park. The park might have been paid for by raising the hotel-motel tax, but—oops!—that one was already overburdened by the reconstruction of Soldier Field, which is why the central office had to move in the first place.
