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$106 million down the drain

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Illinois

Ending a costly court fight that City Hall blundered into, Mayor Rahm Emanuel’s administration has paid more than $62 million to settle a dispute with the private operators of four city-owned parking garages downtown, records show.

The payment last month ended City Hall’s long and unsuccessful legal fight against claims from investors in the four privately operated garages under Millennium Park and Grant Park.

The dispute dates back six years. That’s when aides to former Mayor Richard M. Daley mistakenly approved a parking garage in the new Aqua building at 225 N. Columbus Dr.

Under the 2006 privatization deal, the Daley administration received $563 million to lease the parking garages for 99 years. As part of the deal, the city wasn’t supposed to allow any new competitors in a vast area surrounding the garages.

But less than three years after the Chicago City Council approved the deal, the Daley administration allowed the Aqua garage to open to the public just a block from the nearest of the privatized lots.

Oy.

* Sun-Times…

It was an alley fight of epic proportions, with taxpayers ending up with a costly fat lip.

Cook County taxpayers ended up being out $44.1 million as the result of a decade-long dispute that began when the county’s sewage-treatment agency blocked access to an alley next to its Near North Side headquarters, using a gate, dumpsters and parked cars to hinder construction of the luxury high-rise condo building next door at Michigan and Erie.

It ended with a fizzle, when the Illinois Supreme Court said last Sept. 24 that it was refusing to hear an appeal from the Metropolitan Water Reclamation District of Greater Chicago, which had been ordered to pay millions of dollars in damages to the condo building’s developers.

The district finally paid up on Oct. 2, writing a $39,495,017 check to the developers, NM Project Company LLC, to cover the cost of construction delays on the Ritz-Carlton Residences caused by the obstacles placed in the alley, newly obtained records show.

The district finished settling up its legal bills in December. Its total legal tab for the alley fight: $4,642,766.

Sheesh.

posted by Rich Miller
Tuesday, May 26, 15 @ 12:36 pm

Comments

And these are the hot shots who are going to own a casino?

What could possibly go wrong?

Comment by Langhorne Tuesday, May 26, 15 @ 12:52 pm
=== “It is disappointing to the district that we did not prevail in this matter,” [MWRD spokesperson] Fore says. “It is a tragedy that this $40 million cannot be used to mitigate flooding and clean-water issues.” ===

What’s tragic is that your leadership ever thought this was a good idea, and then doubled-down on a bad strategy by spending $4 million in legal fees appealing to the court.

Comment by Juvenal Tuesday, May 26, 15 @ 12:54 pm
That Mayor Gravitas sure was the Indispensable Man, wasn’t he? It’s no wonder guys like Rauner, the Civvies and the Tribbies backed him to hilt all those years.

Comment by Wordslinger Tuesday, May 26, 15 @ 12:54 pm
Why exactly is MWRD occupying offices at 100 East Erie, one of the most valuable parcels of land the country, much less the city?

I know the water plant is a few blocks down the road, but it’s not like they’re riding their tricycles back and forth between the office and the plant.

Most of the reclamation work takes place far from Jardine.

Comment by Wordslinger Tuesday, May 26, 15 @ 1:25 pm
The beginning or the article states the approval of the garage for Aqua was a mistake. The end of the article notes “The law firm of the then-mayor’s brother Michael Daly represented the Aqua garage’s operator, lobbying City Hall to preserve its city permit.” Just an innocent mistake here, folks, the city’s got plenty of money, don’t worry at all about your pensions.

Comment by West Side the Best Side Tuesday, May 26, 15 @ 1:35 pm
Word
City does water intake and distrib, and sends wastewater to MWRD

MWRD is in stormwater handling and wastewater treatment (”back end”)

Comment by zonz Tuesday, May 26, 15 @ 1:37 pm
also MWRD is countywide

Comment by zonz Tuesday, May 26, 15 @ 1:38 pm
The arrogance of power, esp. when someone else is picking up the tab.

Comment by nona Tuesday, May 26, 15 @ 1:39 pm
MWRD location is historical - admin and engineering staff

Comment by zonz Tuesday, May 26, 15 @ 1:40 pm
Wordslinger-

MWRD has nothing to do with Jardine.

Comment by Wake Up! Tuesday, May 26, 15 @ 1:45 pm
=== Why exactly is MWRD occupying offices at 100 East Erie, one of the most valuable parcels of land the country, much less the city? ===

I know the MWRD has considered moving their HQ to the burbs. It probably makes sense to do so from a taxpayer perspective, but I think the MWRD hot shots like their ritzy downtown location.

===I know the water plant is a few blocks down the road, but it’s not like they’re riding their tricycles back and forth between the office and the plant. ===

As others pointed out… two different agencies.

Comment by Just Observing Tuesday, May 26, 15 @ 2:00 pm
mea culpa, thanks.

Comment by Wordslinger Tuesday, May 26, 15 @ 2:04 pm
MWRD has been at Erie a looooong time. This issue has to do with an easement they granted in the 1940s

Comment by Precinct Captain Tuesday, May 26, 15 @ 2:05 pm
They should/could sell their swanky downtown digs to help pay for the verdict.

Comment by Juvenal Tuesday, May 26, 15 @ 2:08 pm
Gotta be Rauner’s fault, right?(snark intended)

Comment by anon Tuesday, May 26, 15 @ 2:16 pm
Daley made a lot of promises he apparently had no intention of keeping. Like not using this and the parking meter revenue to pay operational expenses, setting up a rainy day fund, etc.

I park in these garages every day and these guys are terrible operators. Just more of Mayor Daley’s gifts to the people of Chicago.

Comment by Chicago Cynic Tuesday, May 26, 15 @ 2:19 pm
== Gotta be Rauner’s fault. ==

He was a big donor to Daley, right?

Comment by nona Tuesday, May 26, 15 @ 2:22 pm
It’s stuff like this that’s going to turn me into a Republican.

Comment by Left Leaner Tuesday, May 26, 15 @ 2:32 pm
==- Left Leaner - Tuesday, May 26, 15 @ 2:32 pm:==

Try Louisiana. Oh wait, the GOP has created a mega mess there. How about Indiana? Oops, it has had problems with privatization as well, the biggest being its attempt privatizing administration of public assistance like TANF and Medicaid. Bad management is bipartisan.

Comment by Precinct Captain Tuesday, May 26, 15 @ 2:51 pm
==Under the 2006 privatization deal, the Daley administration received $563 million to lease the parking garages for 99 years. As part of the deal, the city wasn’t supposed to allow any new competitors in a vast area surrounding the garages.==

THIS was clearly the egregiously awful garage deal for Chicagoans–not Aqua. The Aqua garage may have been contrary to the idiotic privatization “deal”, but in what sane world would a premier residential building such as Aqua in a vibrant growing neighborhood be denied its own parking facility for residents?

Comment by Responsa Tuesday, May 26, 15 @ 2:54 pm
If I was a Chicago taxpayor I would be outraged. But its just another chapter in the well established history of mismanagement, corruption, and cronyism that no longer surprises anyone.

Comment by Tequila Mockingbird Tuesday, May 26, 15 @ 2:57 pm
The city and county have money for pensions. They just need to stop squandering it on insider deals and playing political games.

Comment by Muscular Tuesday, May 26, 15 @ 3:08 pm
PC, the best I can offer you—-the dems are the Cubs when it comes to management and the R’s are the Yankees/Cardinals. Both sides make mistakes and mismanage, dems are just, well………….

Comment by anon Tuesday, May 26, 15 @ 3:52 pm
==but in what sane world would a premier residential building such as Aqua in a vibrant growing neighborhood be denied its own parking facility for residents?===

The problem isn’t that Aqua has a parking facility, it’s that Aqua’s parking facilities are open to the public (and relatively cheap ($14/day)) in direct competition to the Millennium garage.

Comment by Dean Keaton Tuesday, May 26, 15 @ 3:57 pm
It’s convenient that the developers of these swanky condos got the big check from the MWRD, as this development has been a huge fail. Less than one-third sold several years into the process.

Comment by Arthur Andersen Tuesday, May 26, 15 @ 7:40 pm
Service on the MWRD is the experience that the next generation of Daleys brings to the City Council!

Comment by Under Further Review Tuesday, May 26, 15 @ 8:07 pm
Just asking, but is Chicago still considered the most politically corrupt city in the U.S.?

Comment by Curious Tuesday, May 26, 15 @ 8:28 pm