‘Mole’ spooks owner of Edgewater development site
By David Roeder and Tim Novak Staff Reporters August 20, 2013 6:30PM
John Thomas | Sun-Times files
Updated: September 22, 2013 6:38AM
You never know where the “mole” will pop up in Chicago real estate. He’s last been spotted trying to work a development deal in Edgewater.
The “mole” is John Thomas, erstwhile informant for the FBI who helped it build cases against former Gov. Rod Blagojevich and corrupt insider Antoin “Tony” Rezko. Sources also said Thomas wore a wire in conversations with ex-Ald. Isaac “Ike” Carothers, who later went to prison.
Thomas cooperated with the feds to get a lenient sentence for his own felony fraud conviction from a business he once ran in New York. He’s owned up to his past and has said he is working to redeem himself, although some dealmakers avoid him.
That’s apparently what happened in a prospective sale of the old Edgewater Hospital at 5700 N. Ashland. The owner there is the site’s creditor, European bank Dexia. It has advanced a plan to tear down the old hospital and replace it with a 214-unit apartment building, street-level retail, a park and 19 single-family homes. Dexia wants to sell the site to someone who will tackle the project.
Documents in the hospital’s bankruptcy case show that in January, Dexia’s agents agreed to sell to Treadwell Capital Partners LLC. Treadwell, the documents show, consists of “mole” and Robert Bobb Jr., a friend of former Mayor Richard M. Daley. Bobb co-founded Cardinal Growth, which the U.S. Small Business Administration seized for failing to repay $21 million in loans. He used the money to bankroll a sewer cleaning firm that got no-bid City Hall contracts while Daley’s son Patrick and nephew Robert Vanecko were secret investors.
Court documents show Bobb backed out of the deal, at which point the seller looked harder at Thomas’ background and felt it warranted canceling the sale. It has asked a bankruptcy judge for authority to do so.
Thomas confirmed his involvement with Treadwell and said he believes the sales contract, for a price of $6.5 million to $8 million depending on when it closes, is still valid. Dexia’s agent, Waveland Partners LLC, did not return calls.
The old hospital is within the 40th Ward of Ald. Patrick O’Connor, who supports a zoning change for the development. He said he became aware of the Thomas-Bobb partnership only after “the deal went south.”
O’Connor said Waveland assured him on Monday that they are talking to several alternate purchasers. “They think they are making great progress,” O’Connor said.
He said he sees no reason to wait on the zoning while the ownership is in flux. “We always contemplated moving this thing along to make it shovel-ready for the end developer,” O’Connor said.
SHOWTIME? A buyer has emerged for the landmark New Regal Theater at 1645 E. 79th St. The Federal Deposit Insurance Corp., which has marketed the 2,250-seat auditorium for the eye-catching price of $99,000, said through spokesman Greg Hernandez that U.S. Equities Realty, its broker, has found a potential purchaser and is in the “due diligence” stage to determine if it can close a deal.
Hernandez declined further comment. The FDIC got the property through a bank failure. The last person to operate the theater was Regina Evans, the former Country Club Hills police chief, who booked some shows there but defaulted on her loans. She’s now due to be sentenced in a fraud scheme involving state job-training grants tied to the theater.
TECH-TONIC SHIFT: A report by CBRE Group Inc. provides data and insight into the market for startup technology companies in Chicago. The report said employment in the tech sector has grown by 4 percent annually since 2011, triple the rate of the city’s overall job growth.
River North is the favorite office sector for tech firms, but some operations are taking hold in the West Loop, the Fulton Market area and along North Michigan Avenue. Groupon Inc. at 600 W. Chicago and the coming Google Inc. leases in the Merchandise Mart and at 1000 W. Fulton are the biggest example of the tech growth.
CBRE identified 42 buildings that make up the tech office submarket, and found demand there is tight. The vacancy rate is 6 percent, less than half of what it was in 2010, CBRE said. The buildings tend to be older, with an average size of 94,000 square feet, the report said.
Also telling were statistics about net absorption, the total amount of space leased minus new vacancies. The report by CBRE’s research director David Egan and analyst Clinton Ridgewell said the tech buildings registered 150,000 square feet of net absorption in 2012. The entire central business district absorbed only 70,000 square feet in the same year, they said.
David Roeder reports on real estate at 6:22 p.m. Thursdays on WBBM-AM (780) and WBBM-FM (105.9). The reports are repeated at 10:22 p.m. Thursday and 7:22 a.m. Sunday.