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Rahm Emanuel: Taxpayers ‘taken advantage of’ in restaurant deal

The Park Grill restaurant Millennium Park. | Sun-Times file photo

The Park Grill restaurant in Millennium Park. | Sun-Times file photo

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Updated: November 23, 2013 6:14AM

Chicago taxpayers were “taken advantage of” during negotiations on a Millennium Park restaurant and it’s time to make the Park Grill’s clout-heavy owners pay “full freight,” Mayor Rahm Emanuel said Monday.

Emanuel broke his silence about his legal efforts to invalidate the concession agreement, one day after the Chicago Sun-Times lifted the veil on the city’s primary argument: that former Chicago Park District official Laura Foxgrover improperly helped her lover win a 30-year deal bankrolled by then-Mayor Richard M. Daley’s friends and neighbors.

“In the Park Grill situation, city taxpayers were taken advantage of. They did not get a fair pricing for that property,” Emanuel said of the pending lawsuit that has already cost the city and Chicago Park District $1.3 million in legal fees.

“It’s in front of a judge and we, properly, are going to make sure that city taxpayers are not in any way fleeced or taken advantage of in any context. So, we’ve done what we think is appropriate to represent them and make sure that whatever establishment runs the Park Grill pays full freight rather than taxpayers subsidize it.”

The Chicago Sun-Times reported in 2005 that the restaurant lease was awarded to Matthew A. O’Malley, a businessman who got Foxgrover pregnant during negotiations. The newspaper also reported that O’Malley lined up a host of clout-heavy investors, including Daley’s friends and neighbors.

Seven months after taking office, Emanuel filed a lawsuit seeking to invalidate the deal that has allowed Park Grill owners to avoid paying rent and fees for water, gas and garbage pickup. If the lawsuit is successful, the city would be free to rebid the contract to the highest bidder.

The Sun-Times reported this week that City Hall is claiming Foxgrover “unduly and unfairly influenced” the selection process by helping O’Malley and his partners land the deal.

In a deposition, Foxgrover described her role as a “conduit for information” and says she recused herself from negotiations between the Park District and O’Malley’s group.

But she also acknowledged that she didn’t tell her Park District bosses about her romance with O’Malley, nor did she inform them she had become pregnant with his child while the Park Grill negotiations were underway.

City Hall insists that Foxgrover took part in the selection process even after writing her recusal letter, and they have testimony and copies of emails to back that up. She disputes that.

Michael Shakman, an attorney who represented the original investment group, said in an interview in 2011 that the city’s lawsuit was a “money grab.”

Shakman, who no longer represents the group, insisted at the time that the Park Grill concession was a “Clean and honest deal negotiated fairly” by an outside consultant the city hired at a time when “absolutely nobody wanted to put a restaurant” at Millennium Park.

“Nobody was willing to take the risk. It was right after 9/11 when the restaurant business was terrible and Millennium Park was viewed as a high-risk area,” Shakman said after the lawsuit was filed.

“It’s a money grab by the city,” he said at the time. “They see this restaurant that was struggling and now looks like it’s something of value and the city is making an effort to seize some of that value. It’s not a very pretty picture of how to deal with people who step up to the plate and take on a challenging project like this to treat them this way. It’s kind of disappointing.”

Shakman was asked then why the deal allows Park Grill to avoid paying fees for water, gas and garbage pickup as well as the $275,000 in annual rent whenever gross sales fail to reach a certain level they have never reached.

“They made a deal. It includes all the terms it includes. I know it’s hard to believe, but it was an arm’s-length, straight and honest deal with no clout involved,” he said at the time.


Twitter: @fspielman

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