Lease with Daley nephew sparks aldermanic crackdown
The Daley administration would be prohibited from signing a string of month-to-month leases — such as the one at a South Side industrial site co-owned by Mayor Daley’s nephew — under a crackdown in the works to restore “credibility” to the leasing process.
As chairman of the City Council’s Committee on Housing and Real Estate, Ald. Ray Suarez (31st) says he should have signed off on the lease at 3348 S. Pulaski.
(Sun-Times photos)
But, City Hall’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.
Last week, Suarez demanded to know why the city has paid nearly $500,000 to lease the space co-owned by mayoral nephew Robert Vanecko and his partners, developer Allison Davis and Davis’ son Jared, under an arrangement that was supposed to be temporary.
Today, he went a step further.
Suarez said he plans to introduce an ordinance at next week’s City Council meeting that would rein in month-to-month leases.
“You could have one or two or three or four months. Then, you would have to come to the City Council and have a letter of justification why it should be done,” Suarez said.
“Long month-to-month leases give the impression … that something [kinky] is going on. I want to make sure that we avoid any kind of perception out there by the public. ... We’re gonna correct this. ... It’s gonna be something that’ll bring credibility to the system.”
Asked whether he believes the South Side lease was signed to bail out the mayor’s nephew, Suarez said, “I can’t say that yet because I don’t have all the facts. ... From what I’ve seen right now, no. ... The person I talked to from the department [of General Services] says no, and I have to believe him. I think he’s a pretty credible fellow.”
The Chicago 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.
The city has been leasing the space at a rate of $3.83-per-square foot for 70,565 square feet of space, 20 percent of the warehouse.
On Tuesday, City Hall finally provided the Sun-Times with a copy of the actual lease for 3348 S. Pulaski.
It shows that the city signed the agreement on Nov. 14, 2007 — 13 days before Vanecko and his partners bought the warehouse on Nov. 27, 2007.
The lease began on Dec. 1, 2007, and ended on Dec. 31, 2007. It has been a month-to-month lease ever since.
The lease was negotiated by Joel Vieyra, supervisor of leasing for the Department of General Services, according to Michael Lazar, who sold the building to Vanecko and his partners.
Lazar bought the building in 1989, and he said he and the city had been negotiating a lease for the property “for years.”
In October 2006, the city signed a one-month lease for $2,000 to park trucks outside on the property.
“They were leasing a small outside space,” Lazar said.
“To have the city occupy the building would make the building more marketable,” Lazar said. “I want to sell the building with leases in it.”
Earlier this month, 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.
Daley has insisted that he knew nothing about his nephew’s risky real estate venture with city employee pension funds until the Chicago Sun-Times blew the whistle nearly two years ago.
And the mayor has maintained that, the minute he did find out, he ordered his nephew to drop out of the deal with Davis, only to be ignored.